Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, is pleased to announce the signing of an agreement with Russia’s Far East Development Corporation officially confirming the Company’s residency in the Kamchatka Advanced Special Economic Zone (“ASEZ”). Ratifying agreements were also signed with the Government of Kamchatka.
The ASEZ programme was established by the Russian government in 2014 with the aim of encouraging new investments in the Far East of Russia and aiding economic growth by providing preferential business terms to organisations operating within the region. The programme currently comprises 20 priority development areas, including Kamchatka, where TSG operates.
As a confirmed resident of ASEZ, TSG will benefit significantly from reduced income taxes, metals royalties, property taxes and land taxes for a certain period of time. The Company estimates that the potential benefits of inclusion within the Special Economic Zone may contribute to approximately $6m in cost savings over the next 7 years. Additionally, the Company may be entitled to an accelerated process for the refund of VAT expenses incurred.
In accordance with the agreement, TSG will implement a number of new capital investment projects including the development and construction of an extension to the Asacha Gold Mine, known as Vein 25. Additionally, TSG will invest in a ventilation unit and procure additional mining equipment for the mine. The Company expects to invest up to $21.2m until 2024 which will lead to the creation of approximately 68 new jobs within the region. These capital investments are in line with management expectations.
Vein 25 is situated in the East Zone of the Asacha Gold Mine and is not currently being mined. Vein 25 is a good example of the near-site potential of the existing mining operation. Preliminary mine development has already commenced. Further details about the ore-body at Vein 25 will be included within the updated Mineral Resource Estimate for the Asacha Gold Mine which is expected to be released shortly.
Alexander Dorogov, Chief Executive Officer of TSG, commented:
“We are highly appreciative of the support provided by the Regional Government of Kamchatka and our inclusion into ASEZ programme. It is an excellent government initiative that benefits the region as well as multiple additional stakeholders. We have already completed a large programme of capital investment at the Asacha Gold Mine over recent years including planned maintenance of the mill, establishment of an underground water pumping station and main infrastructure and the enlarged tailing facilities. However, with the benefits of ASEZ status, we look forward to accelerating the development of Vein 25, a new vein at the Asacha Gold Mine.”
Vladimir Ilyukhin, Governor of Kamchatka, noted:
‘The mining sector is one of the foundations of development of Kamchatka. We expect that construction
of new projects and the development of existing ones will contribute positively to the regional budget,
provide new jobs and infrastructure development. The implementation of new project will provide Gross
Regional Product growth up to 1.16 billion rubles per year.’
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TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia. The Group also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka.
Additional information is available from the Company’s website: www.trans-siberiangold.com