INVESTMENT – China funds for Lincoln

An agreement between Lincoln Minerals and Jiangyin Huaxi Steel Co (JHS) will see the Chinese steel mill inject $8.25 million into the Australian-based company and purchase at least half of the proposed output from Lincoln’s Gum Flat Iron Ore Project in South Australia.
The Heads of Agreement will see JHS own about 13% of Lincoln shares, making it Lincoln’s second largest shareholder.
It will also result in Lincoln establishing an off-take agreement with JHS comprising 50% of Lincoln’s share of any future hematite direct shipping ore (DSO) and 50% of Lincoln’s share of any other hematite and/or magnetite iron ore production from the Gum Flat project on southern Eyre Peninsula.
Off-take shall begin from start-up of hematite DSO and/or magnetite production for a minimum period of 2 years, with JHS having the right to extend for a further 3 years.
Lincoln plans to use proceeds from the direct investment to regain 100% ownership of the project and fast track Gum Flat exploration and development to build on its existing indicated and inferred resources of 58 million tonnes and exploration targets of 125-200 million tonnes magnetite ore and 4-17 million tonnes of hematite ore.
Lincoln’s managing director John Parker says, “Lincoln will buy back from Indian iron ore miner, Mineral Enterprises Limited (MEL) and its subsidiary, Mineral Enterprises Australia, at a cost of Aus$5.7 million, the 40% of the Gum Flat project not already owned by Lincoln.
“In addition, Lincoln will also complete a scoping study at Gum Flat for both hematite DSO and magnetite mining and beneficiation, a detailed hydrogeological study and, subject to the outcomes of those studies, apply for a mining lease and seek all necessary approvals.”
Lincoln and MEL announced on March 12 this year that the two companies had signed a Contract for Sale of Joint Venture Interest under which, subject to finance, Lincoln will re-acquire the 40% interest in Gum Flat.
Lincoln originally entered into the joint venture agreement with MEL in December 2007. MEL advised Lincoln this year that as it is developing a number of projects in India, including a hematite beneficiation plant and a deep sea port, it has agreed to sell its interest in Gum Flat to help fund its Indian initiatives.

KAZAKHSTAN – Alyntas open at depth

Further drilling at Central Asia Resources’ Alyntas Project in southern Kazakhstan has resulted in gold mineralization being detected from surface to 400 metres deep, and the prospect remains open at depth.
Recent drilling has explored depth extensions under the current resource at the fold nose that dominates Alyntas mineralization.
One hole recorded more than 100 metres of mineralization starting from 149 metres while in another hole returned 3 metres @ 3.57 grams/tonne gold from 404 metres, which is the deepest mineralization recorded to date at Alyntas.
Central Asia’s managing director Jason Stirbinskis says, “The important message is an increase in confidence that the mineralization we see at the surface continues at depth and, therefore. There is the possibility of finding additional high grade zones below potential open pit depths.
“Until recently the hulk of our drilling has focused on defining a near-surface resource, down to about 180 metres. We completed a few deeper holes last year with spectacular results around the fold nose, which prompted the deep drilling in the current program.”
The resource for Alyntas announced in May 2009 shows 1.757 million indicated tonnes @ 1.89 grams/tonne gold for 106,889 ounces and 5.156 million tonnes @ 2.40 grams/tonne for 397,113 ounces.

KAZAKHSTAN – Kyzyl drilling progresses

Results from the 2010 phase one drilling program which is progressing at Ivanhoe Mines’ Kyzyl Gold Project will be used in an updated, independent resource estimate and pre-feasibility study.
Project operator Altynalmas Gold has completed more than half of the 39,000 metre, deep-level drilling program at the world-class project in north-east Kazakhstan.
Ivanhoe Mines owns 50% of Altynalmas Gold, 100% owner of Kyzyl, which includes the Bakyrchik and Bolshevik gold deposits. An established, privately-owned Kazakh shareholder owns the other 50%.
Altynalmas Gold chief executive officer and Ivanhoe Mines’ Gold Division president David Woodall says, “The drilling program is beginning the process of testing enormous exploration potential in what Ivanhoe’s management considers to be one of the world’s highest-grade and largest undeveloped gold systems.
“We have completed 21,000 metres of our phase-one program and we expect the results to form the basis for upgrading the project’s indicated resources to reserves as part of a mine plan to be include in an independent pre-feasibility study.”
Following completion of the pre-feasibility study, Altynalmas Gold intends to proceed with the detailed design of a phase-one, 1.5 million tonne/year commercial plant that will treat head grades in the range of nine or more grams/tonne of gold.
Altynalmas is targeting to begin mine construction in 2011 with production starting in 2013. The company has also started a 6000 metre, near-surface drilling program at the Bakyrchik property to test targets for potential, initial open-pit development.

KYRGYZ REPUBLIC – Andash project ‘robust’

A definitive feasibility study (DFS) confirms that Kentor Gold’s Andash Gold-Copper Project, which is on track for production in late 2011, is both technically and economically robust with the project.
The DFS, which is based on Andash Zone 1 only, also confirms that the mining and processing methods are well proven and comfortably within industry standards.
The DFS includes design, engineering, cost estimates and implementation plans for an open pit mine and
crush-grind-float processing plant with annual capacity of 1.5 million tonnes increasing to 3 million in year 3. The plant will produce a high quality gold-copper concentrate for sale to third party smelters.
Kentor Gold’s managing director Simon Milroy says, “Looking beyond the initial mining project, we are particularly pleased with the high potential for early expansion and the favourable positioning of Andash.
“Adding additional reserves of 6 million tonnes at similar grades of ore to current reserves, a reasonable expectation from exploration drilling will increase the NPV by 56%.
“We are planning to begin exploration drilling at some of the other known prospects within the exploration licence this month with the aim of increasing the resources.
“Because Andash will be the first operating gold-copper mine in the Talas Valley, we will be ideally positioned to acquire other known resources in the region.”
The company has also signed an agreement to acquire a further 10% in Andash from Aurum Mining, thus increasing Kentor’s ownership in Andash to 90% with the remainder held by a local Kyrgyz company.

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