MINING focus at the Sekisovskoye Gold Project in Kazakhstan is shifting from open pit to underground mine as operator GoldBridges Global Resources seeks to boost output by 1000% by 2018. By the end of the year the company formerly known as Hambledon Mining will have closed the pit and be mining completely from underground.
The transformation has seen a substantial drop in production this year along with a pre-tax loss, exacerbated by lower gold prices. GoldBridges reported a US$462,000 pre-tax loss in the first six months after swinging from a $2.7 million profit a year earlier after revenue declined to US$12.8 million from $16.7 million and it was hit by administrative expenses rising to US$4.1 million from $3.3 million.
Gold production in the first half dropped to 8823 ounces of gold from 12,694 ounces and the company had to mine more ore to achieve that rate. Ore from underground mining contributed 17% of the ore in the first half, compared to only 8% in 2014.
The company says underground production will cost around 50% less than it previously thought and will boost output. It has 60,000 tonnes of ore stockpiled to be treated in the second half to supplement production as the open pit closes.
GoldBridges said in a statement, “Our operational priority will remain to continue to increase production from the underground mine as we move towards our target of producing 100,000 ounces of gold annually by 2018.”
The underground development has a recognized estimate of probable reserves totalling 2.3 million ounces at a grade of 4.09 grams/tonne with indicated and inferred resources potentially adding another 5.1 million ounces.
The move into underground mining was originally expected to cost around US$130 million, mainly to sink a shaft to access gold reserves, but the company said it was optimizing studies to bring capital expenditure down as much as possible while maintaining the target. It is looking to access the reserve by a decline rather than the more traditional shaft-sinking approach which could reduce its initial investment by around 50%.
By accessing reserves from a decline, the company could use underground haulage trucks to transport product to ground level, which it said was a commonly used and well proven method around the world. However, the company cannot fully carry out its plans without further financing and is in further discussions with major shareholder African Resources.