Orsu Metals (TSX:OSU)(AIM:OSU) and Gold Fields (NYSE:GFI) announced on Thursday the results of a scoping study for the Tadybulak gold-copper-molybdenum porphyry deposit at their joint venture Talas project in the Kyrgyz Republic, which calculated the site has a pre-tax net present value of US$815 million with a potential 25% IRR.
Gold Fields, through its subsidiary Gold Fields Orogen Holding BVI, has a 60% stake in the Talas joint venture, which owns the Taldybulak, Barkol, Kentash and Korgontash licenses in the region, while Orsu retains the remaining 40% interest.
The scoping study for Taldybulak, completed by Coffey Mining, establishes that with an open pit mine scenario with a 15 million tonnes per year processing facility, the deposit is estimated to have average annual production of 242,000 ounces of gold, 26,000 t of copper and 900 t of molybdenum, at estimated initial costs of approximately US$516 million with a payback rate of six years from the start of construction.
"We are very pleased with the positive results of the Taldybulak Scoping Study. The project has excellent infrastructure and is located in relatively gentle terrain, amenable to open pit mining with low stripping ratio," said executive chairman of Orsu, Dr. Sergey V Kurzin.
The Taldybulak property, which was also estimated to have a 17 year mine life, has been the primary focus of exploration within the Talas licence area, which is located 250 km west of the Kyrgyz capital of Bishkek.
Preliminary metallurgical test work has indicated that the recovery of gold, copper and molybdenum at the site would work using a conventional communition and flotation process.
The scoping study, which was based on both indicated and inferred mineral resources, estimated metal grades for the project at 0.52g/t gold, 0.18% copper and 0.011% molybdenum, with an average cash cost of US$445 per ounce of gold equivalent.
"The Talas joint venture will continue to focus on the improvement of Taldybulak metal grades through the 5000 m closely-spaced infill drilling programme which is planned to start after the winter season," Dr. Kurzin added.
The companies said that analysis of the topography demonstrated that there is enough space to build tailings storage facilities in the immediate surroundings of Taldybulak, but that work to design these facilities is still ongoing.
The Taldybulak scoping report was completed assuming a total combined resource of 254 Mt of ore (indicated and inferred), using the base price case of US$1,000/oz Au, US$2.49/lb Cu, and US$15/lb Mo.
Orsu Metals was up more than 33% on Thursday, trading at 22 pence on the London stock exchange just after noon GMT.
Disclosure: No positions