Sekisovskoye


Sekisovskoye

The mineral rights at Sekisovskoye are held by a 100% owned subsidiary of the Company, MC BAURGOLD LLP, and the processing plant is held by the 100% owned subsidiary of the Company MMC Altyn MM LLP.

The Sekisovskoye deposit is located at the village of Sekisovka, approximately 40 kilometres from the East Kazakhstan regional capital, Ust Kamenogorsk. The road from Ust Kamenogorsk to Sekisovka is the main route between Ust Kamenogorsk and Ridder (formerly Leninogorsk) and on in to Russia.

Map of Kazakhstan showing the location of Sekisovskoye

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In terms of infrastructure, the mine is well-connected. The deposit is located on the main road between the mining centres at Belousovka and Ridder, 40km to the north of Ust Kamenogorsk, the capital of the East Kazakhstan region that has been a mining and mineral processing centre for over half a century. Qualified workers, mining supplies, equipment and engineering facilities are readily available in the region. Telephone connections are in place and an existing building was acquired and renovated for use as our laboratory.
The site’s facilities include a processing plant, administrative and maintenance blocks, tailings impoundment, and waste rock and soil storage areas.
There are two operating transport declines to access underground development levels. The second transportation decline is located at the bottom of the open pit. On completion of this decline in 2016, the haulage distance from the mine to the processing plant has been reduced from 3km to 1.4km.
Water for the mining operation is obtained from the Sekisovka River, a tributary of the Ruba River. The mine operates on water recirculation where possible, with the mine water being recycled at the processing plant. Back up water supply of up to 50% will be provided by existing bore water and the remaining water requirement will be provided from the tailings dam, where water will be accumulated during an initial period lasting 4-5 years.
Power is sourced from the Sekisovka village, which is served by a 6kV power grid. Supply is via overhead double-chain power lines of 110kV from the Altaienergo system using a 12.5km extension of the overhead power line.

The Sekisovskoye deposit was discovered in 1833 by mining engineer, Ivan Zubarev, with surface mining taking place between 1833 and 1847, 1932 to 1935 and 1943 to 1946. From 1975 to 1986, a range of exploration work was carried out, starting from additional geological appraisal at a scale of 1:50,000 and finishing with preliminary exploration. Between 1978 and 1982 “AltaiZoloto” of the Ministry of Non-Ferrous Industry, KazSSR, mined the oxidised area of the orebody. The open pit was excavated to a depth of 35m and a total of 3,406 kg of gold and 3,431 kg of silver was mined.

In 2003, under Hambledon Mining’s ownership, the exploration geology department of MC BAURGOLD LLP carried out further exploration. From 2003-2005, 75 holes were drilled from surface producing a total of 8,245m of core, and in 2005-2006, 55 underground holes were drilled from the 441m underground level, producing 4,027m of core. All the samples underwent fire assay for gold content, and atomic absorption analysis for silver content at an internationally certified laboratory in Kyrgyzstan. A computer model, using Datamine software, of ore-containing breccias and ore bodies at different cut-off grades was created and comparative resource and reserve calculations made. Within the licensed area, a detailed topographic survey was carried out at a scale of 1:1,000.

Local Geological Setting

The Sekisovskoye Project’s gold deposit is located in the Rudny Altai structural and formation zone, in the Charsk Gold belt in the Greater Altai global mobile belt. The mine is located on the northwestern flank of the Altai-Alashan mobile region that covers the Siberian platform from the southwest and the south. The Rudny Altai is essentially part of the fragments (xenoliths) of the ancient palaeo-continent (terranes collage) that drifted in the palaeo-asian ocean, which subsequently joined into one single formation during the Hercynian collision stage.

At the Sekisovskoye Project, there are ten discrete igneous breccia bodies, of which five lie within the current licence area. The gold-bearing mineralised zones are defined as five groups in four different breccia bodies, namely the Central Group, Western Group, Northern Group, Southwest Group and the Northwest Group.

Local geology of the Sekisovskoye project

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The Greater Altai’s emerged tectonic structures, which includes the Rudby Altai, are restricted by deep faults, sutural zones and are distinguished according to the development geodynamics, geological structure and metallogeny specifity (which is mainly due to the geological processes’ grandiosity and duration). There are three tectonic zones in the Rudny Altai, from the northeast to the southwest and they include the Beloubinsko-Sarymsakty-Kurtinskaya, the Rudnoaltaysk-Ashalinskaya and the Itrtysh-Fuynskaya.

The Greater Altai structures are thought to be xenoliths of an ancient paleo-continent, with its consolidated multilayered crust comprising four layers, namely the metabasalts, meta-diorite, meta-granite and sedimentary.

Within the Rudby Altai, the Sekisovskoye deposit is characterised by:-

  • brecciated gold-sulphide mineralised zones and stockworks in the magmatites of the Zmeinogorsk complex;
  • increased tectonic dislocations of rocks, fixed by brecciated and crushed textures of rocks are characteristic of the ore fields;
  • northwestern striking faults, which had importance in controlling the ore; and
  • the ore-explosive breccias (diorite, gabbro and plaigiogranites debris) cemented by the majority of the propilite and berezite cement with the gold-sulphide mineralisation.

Mineralisation

Mineralisation is hydrothermal gold depositions in veins and breccias. Several styles of mineralisation are found in the five orebody shapes, Groups 1 to 5. Mineralisation styles are as follows:-

  • large tabular orebodies;
  • stockworks;
  • medium size vein and lens hosted;
  • small veins, pipes and dykes; and
  • isolated lenses or veins.

The mineralisation is hosted in dyke-like breccia intrusions containing sulphide mineralization and free gold. The course breccias are cut by barren igneous dykes that are typically planar and dipping steeply to the northeast. Gold is embedded in the cementing mass of the explosive hydrothermal breccias. Gold tends to be concentrated at the geological boundaries between breccias and igneous rocks.

Cross section through the Sekisovskoye orebody

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In December 2013, Altyn appointed international mining consultants Venmyn Deloitte to undertake a Competent Person’s Report, which included updating the Company’s resources and reserves under the JORC Code. The Company published the findings of this report in November 2014.

Venmyn Deloitte conducted a review of the exploration drilling, metallurgical testing, geological modelling and the GKZ Reserve and Resource prepared by Altyn, and has used this information to estimate the JORC (2012) compliant gold and silver Mineral Resources. These are shown in the table below.

 

Level
(masl)
JORC

Classification

Gold
Cut-Off Grade
(g/t)
Tonnes
(kt)
Gold
Grade
(g/t)
Contained Gold
(Moz)
Silver
Grade
(g/t)
Contained Silver
(Moz)
Surface to -400m Indicated 3.00 15,700 5.32 2.67 6.99 3.52
Inferred 2.00 3,500 4.21 0.48 No estimation
-400m to -800m Inferred 2.00 14,700 4.21 1.99 No estimation
TOTAL / AVERAGE JORC RESOURCES 2.46 33,900 4.72 5.14 6.99 3.52
Note 1: Rounding of tonnes and ounces may result in computational discrepancies.
Note 2: Average Ag grades and total Ag ounces relate only to those tonnes where estimations have been made.

Note 3: Resources are stated inclusive of reserves

JORC Indicated and Inferred Mineral Resources total 5.14Moz. In addition, a further 3.30Moz have been identified as an Exploration Result below the -800masl. While these will require further exploration drilling to be potentially upgraded to Mineral Resources, this result does highlight the potential for a larger Mineral Resource than is currently estimated. Assuming that this potential were realised, Sekisovskoye would contain in excess of 8Moz of gold.

Exploration Results estimated are shown in the table below. The Exploration Results have not been reported as a range because of the conversion from GKZ P1 Reserves, which do not require a range.

Level
(masl)
JORC

Classification

Gold
Cut-Off Grade
(g/t)
Tonnes
(kt)
Gold
Grade
(g/t)
Contained Gold
(Moz)
Silver
Grade
(g/t)
Contained Silver
(Moz)
-800m to -1500m Exploration Result 2.00 24,400 4.21 3.30 No Estimate No Estimate

Note 1: Rounding of tonnes and ounces may result in computational discrepancies.

Note 2: Average Ag grades and total Ag ounces relate only to those tonnes where estimations have been made.

Subsequent to estimating the Indicated Resource, Venmyn Deloitte applied the appropriate modifying factors (including dilution and mining losses) and has estimated a Probable Reserve of 2.26Moz of gold from surface to the -400masl, as demonstrated in the following table.

JORC

Classification

Tonnes

(Mt)

Gold Grade

(g/t)

Silver Grade

 (g/t)

Contained Gold

(Moz)

Contained Silver

(Moz)

Probable 17.25 4.09 5.37 2.26 2.97

Note 1: Rounding of tonnes and ounces may result in computational discrepancies.

Note 2: Average Ag grades and total Ag ounces relate only to those tonnes where estimations have been made.

Calculated using a pay limit of 2.60g/t

The Ore Reserve and Mineral Resource estimates have been based on a very substantial exploration programme which represents more than 170,083m of drilling.

The Sekisovskoye mine was predominately an open pit operation with a conventional carbon-in leach (CIL) gold recovery plant that has a processing capacity of 0.85Mtpa. However, in 2016, the open pit has ceased to supply ore and all production is to be sourced from the Sekisovskoye underground mine which is being developed. The underground mine will continue to ramp-up production between 2016 and 2019 and is planned to reach 1 Mtpa capacity in 2019.

During 2015 and 2016, the site team have constructed a second transportation decline from the bottom of the open pit, through which the significant deeper gold reserves will be accessed. The second transportation decline is located at the bottom of the open pit. On completion of this decline in 2016, the haulage distance from the mine to the processing plant has been reduced from 3km to 1.4km. See Investor Relations section for recent updates on underground development work

A small incremental processing plant expansion is planned to be completed in 2018, which will increase throughput from 0.85Mtpa to 1Mtpa. The expansion will be through debottlenecking of existing equipment and the addition of some new equipment to support the upgrade.

Life of mine gold production is expected to be 1.89Moz with total associated silver production of 2.72Moz. On an average annualised basis the gold production is anticipated to be 100,000 oz after 2019.

The Sekisovskoye process plant is a conventional carbon-in-leach (CIL) gold recovery plant with an associated gravity section. The nameplate capacity of the process plant is 0.85Mtpa. The Sekisovskoye processing plant flow diagram is shown below.

The processing plant is expected to produce a gold doré with an overall gold recovery of 84% and an associated silver recovery of 75%, and this is commensurate with the metallurgical test work that has been performed.

processing1