The mineral rights to the Sekisovskoye project are held by a 100% owned subsidiary,
TOO Sekisovskoye and the processing plant is being built
by the 100% owned subsidiary TOO Altai Ken-Bayitu. .
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 sealed and provides the main route between Ust Kamenogorsk and Ridder (formerly Leninogorsk) and further on in to Russia.
The deposit occurs in the northwest marginal zone of the 40 thousand sq.km Rudny Altai Palaeozoic metallogenic belt that occupies the eastern border of Kazakhstan and the Altaisky region of Russia. The mineral hosting intrusives are of late Devonian age.
Hambledon's extensive infill diamond drilling programmes within the upper horizons of the deposit have provided a higher confidence in the delineation of the gold zones, which better reflects the complexity of the gold distributions, in both shape and spatial continuity. Consequently, the number of mineralised zones has increased significantly: totalling 244 zones within the higher levels above the 250m elevation and a total of 307 zones for potential underground exploitation below the 250m level. True thickness of these tabular-like zones may change rapidly along strike and down dip, with a maximum delineated thickness of 45m, and the continuity of mineralisation may reach 700m downdip and 150m along strike. Most of these zones are parallel to sub-parallel within the hosting breccia pipe, with dips averaging 65 to 80 degrees northeasterly. It has now been shown that several of the “barren” igneous dykes within the hosting breccias can contain noteworthy gold levels and these have been incorporated into the modelling of the gold zones.
Gold is associated with hydrothermal alteration of the breccia zone matrix and also with hydrothermal sulphide veining. A high percentage of the gold occurs as intergrowths and free grains, with only a minor percentage locked within sulphides. Gold particles can be coarse, up to 0.4mm, and this contributes to an erratic grade distribution, in addition to the presence of unmineralised breccia fragments. CRS suggest that the presence of listvenite alteration indicates that the gold and silver mineralization may have emanated from hydrothermal solutions that developed from differentiated deep-seated ultrabasic magmas.
The deposit was discovered in 1833 by mining engineer, Ivan Zubarev, with mining from surface 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 1:50,000 scale and finishing with preliminary exploration. Between 1978 and 1982 “AltaiZoloto” of the Ministry of Non-Ferrous Industry, KazSSR, mined the oxidised area of ore body 2. 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.
Starting in 2003, the exploration geology department of TOO Sekisovskoye has been carrying 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 have undergone fire assay for gold content, and atomic absorption analysis for silver content at the internationally certified Alex Stewart laboratory in Kyrgyzstan
A computer model, using Datamine software, of ore-containing breccias and ore bodies at different cut-off grades has been created and comparative reserve calculations have been made.
Within the licensed area, a detailed topographic survey has been carried out at 1:1,000 scale.
Current exploration
drilling is centred within the western margins of the open pit,
where extensions of orebody 11 are being defined for both open
pit and future underground exploitation. Known gold
mineralisation, immediately along strike to the Sekisovskoye
deposit, will also be drilled to help better define the extent
of gold resources in these areas. Next year, underground
drilling will be focussed on upgrading the resources and
reserves for underground extraction.
In May 2007, 189 sample
results from the surface drilling programme that is targeting
extensions of modelled ore zones along the upper western fringes
of the Sekisovskoye deposit indicated that the gold grade
distributions supports the integrity of the resource model with
a number zones showing up-dip extensions, including Orebody
‘11’.
Open pit project
The Sekisovskoye deposit consists of a
steeply dipping series of lenticular zones striking NW/SE and
dipping to NE. The mine planning has an open pit being
developed from surface to a depth of 340 m above sea level to
produce a pit of approximately 150 m deep. The underground is
planned from the base of the pit to at least another 700 m deep.
Open pit operations at Sekisovskoye
commenced in July 2006.
Infrastructure
Infrastructure requirements for the project have proven to be
minor as the deposit is located on the main road between the
mining centres at Belousovka and Ridder, 40 kms to the north of
Ust Kamenogorsk. Ust-Kamenogosk is the capital of the East
Kazakhstan region that has been a mining and mineral processing
centre for over half a century. Appropriately qualified staff,
mining supplies, equipment and engineering facilities are
readily available in the region. An adequate power supply exists
from a nearby power grid and a site substation consisting of a
14Mw, 110/6 kV transformer and switch gear has been installed.
Water and telephone connections are available nearby and an
existing building has been acquired and renovated for use as
office, kitchen facilities and temporary laboratory.
Mining
The current open pit design consists of
some 4.2 million tonnes of ore at a gold grade (diluted) of 1.6
g/t and a stripping ratio of 4.7:1, estimated to yield 213,352
ounces of gold and 366,280 of silver. This pit was
deliberately curtailed in depth because of the benefit of
keeping use of certain existing underground development which
reduces the cost of mining from underground ore which would
otherwise be economic from open pit. In the light of recent
rises in the gold price this plan is being reviewed. Sekisovskoye’s
drilling programmes and early mining results consistently (and
statistically reliablly) show grades some 19% higher than the
grade shown in the geological model which was largely based on
Soviet era drilling. This increase in grade is likely to
compensate for the slightly lower grade of near-surface ore
which will be mined in the first years of the pit life. Later,
the grade will rise and production is likely to rise above
40,000 ounces.
The planned mining rate of 850,000 tonne
per annum gives a pit life of approximately 5 years. Mining
operations are conventional drill and blast with excavator and
truck haulage. Mining is carried out by Sekisovskoye’s own
mining fleet as a detailed cost analysis conducted prior to
commencement of operations showed there were considerable cost
savings to be gained. The mining fleet consists of two Hitachi
Zaxis 850H, 85 tonne excavators with a fleet of 45 tonne BelAZ
7547 mining trucks. Drilling is carried out using Atlas Copco
COPL7 drilling rigs. Ancillary mining equipment is a mixture of
Russian and Chinese equipment.
Before the start of processing, mining was
focused on producing waste material for use in the construction
of the processing plant. The waste material generated from the
pit was tested in a laboratory and found to be ideal for this
use and may in future, be sold to third parties. This material
was therefore used in the construction of all roadways, ore
stockpile, plant site fill and for the construction of the
tailings dam. The tailings dam site also contains a large depth
of clay. This material has been excavated to deepen the
tailings dam as well as to provide material to construct an
impermeable layer under the plastic liner of the dam.
As at the end of December 2007 a
total of over 2.0 million m3 of material has been mined
including 168,000 tonnes of ore. Cost analysis of the mining
equipment operation has shown that the equipment is mining ore
and waste at even lower costs than those projected in the
original equipment purchase justification. Cash mining cost,
excluding depreciation and G&A, are currently around $1.10 per
tonne, though this is expected to rise as the equipment ages and
longer haul runs are needed.
Initially, it was planned to use
contractors to carry out the construction of the mine tailings
facilities. However, contractor costs have proved to be so high
on a unit basis that a cost analysis determined that the
tailings dam construction could be carried out by the company at
much lower cost with the purchase of a small civil earthworks
fleet. Board approval for this was received in May 2007 and the
fleet purchased. All future tailings facilities will now be
built by Sekisovskoye equipment generating significant savings
for the operation.
Processing
The Processing plant was commissioned in mid December 2007.
Some minor problems were encountered after start-up with the
plant having to be shut down for two weeks to rectify the
problems experienced with the primary and secondary mill
bearings. These problems were rectified and the process plant
is now being ramped up to the full design capacity of 850,000
tonne per annum. All other sections of the plant were able to
be commissioned from the initial milling prior to the shut down
with a small gold pour being carried out to commission the
elution, electrowin and gold room.
The metallurgical testwork used
in the design of the processing facility was carried out in
Australia and Kazakhstan. The results support the very high
recoveries encountered in previous testing and an average
recovery of 92 per cent is expected using a conventional CIL
circuit. Sufficient data has not yet been generated from actual
operations to confirm this estimate.
The circuit consists of a 3-stage crushing
plant followed by primary and secondary grinding with gravity
recovery and fine grinding of the gravity concentrate. The
gravity concentrate will be leached in a small, dedicated
intensive cyanidation circuit. A 6-stage CIL cyanidation leach
system will recover the gold and silver from the ore and
concentrate through adsorption onto activated carbon. The carbon
is eventually “stripped” of the precious metals that are then
electrodeposited onto cathodes. The cathodes are ultimately
smelted into doré bullion for shipment to a refinery. Processing
costs are expected to be a little over US $10 per tonne. The ore
contains no environmentally deleterious components and
environmental testing supports the expectation that there will
be no acid rock drainage issues.
The planned ore throughput for the open
pit ore is 850,000 tonnes per annum to produce approximately
40,000 ounces of gold per annum. The same plant will be capable
of treating underground ore which, being of higher grade, will
result in production of over 100,000 ounces of gold per annum
although there is the ability to increase the throughput of
underground ore with the addition of extra grinding and leaching
capacity.
Underground
As a part of the permitting of the open
pit operation, an initial assessment of the underground
operation was carried out. Preliminary access layouts and
detailed stope layouts of the known resource were developed.
This planning work envisaged that access to the western
orebodies would be developed via a spiral ramp commenced from
surface to the south of the open pit operations, with mining
being carried out using long-hole open stoping in the larger
orebodies and overhand cut and fill mining being used in the
smaller and narrower orebodies. To further this conceptual
design work the consulting group AMC Consultants have been
awarded a contract to carry out a full feasibility study on the
underground mining operation.
It is anticipated that underground mining
will start at a low level and build up to a rate of some 500,000
tonnes per year. At that stage it is likely that the processing
facility will be expanded to enable open pit production to
continue in parallel. The start-up of underground mining will
greatly increase the gold production rate and significantly
lower the cash cost of production.
