Turquoise Hill wins in dispute with Rio Tinto over mine in Mongolia
The temporary relief granted to the Vancouver-based miner Turquoise Hill Resources in the arbitration proceedings against Rio Tinto, prevents the mining giant from restricting Turquoise Hill’s talks on funding and other matters with its fellow stakeholders in Oyu Tolgoi copper-gold-silver mine in Mongolia. Until further notice, Rio Tinto won’t be able to authorize re-profiling negotiations with project lenders in a manner that would render Oyu Tolgoi LLC unable to execute an offering of bonds in 2021, Turquoise Hill noted.
Tensions between the companies have grabbed headlines in recent months. They are at odds over roles and obligations in securing the remaining funding for the underground expansion of the mine. Turquoise Hill, majority owned by Rio Tinto, had expected the underground expansion to cost US$5.3 billion when it was approved in 2015. Last year, however, Turquoise Hill flagged stability risks associated with the original project design, adding that amendments to it could increase costs by as much as an additional US$1.9 billion. Turquoise Hill also warned at the time of further delays of up to two and a half years, with first sustainable production from Oyu Tolgoi’s underground expansion expected between May 2022 and June 2023.
Rio Tinto had said in September it planned to raise up to US$500 million through additional lending to develop the giant copper mine. The move, Rio said, would reduce the remaining funding requirement of the expansion to up to $1.4 billion. By reprofiling, the parties sought more time to repay their debt, knowing that the principal of the extended debt, or in some cases even the interest rate on it, are not reduced. Any remaining funding for the underground mine, Rio Tinto vowed, was to be met through a Turquoise Hill equity offering.
Turquoise Hill continues evaluating financing options for Oyu Tolgoi. Such alternatives include additional debt from banks or international financial institutions, an offering of global medium-term notes and a gold streaming transaction, it said. The company had previously disclosed it was facing a funding shortfall for Oyu Tolgoi’s expansion of up to $4 billion, including balance sheet servicing costs. Once completed, the underground section of Oyu Tolgoi will lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.
Oyu Tolgoi, located in the South Gobi desert near the border with China, produced 35,203 tonnes of copper and 26,154 ounces of gold in the first three months of this year. Rio Tinto owns the mine through its majority stake in Turquoise Hill, which has a 66% interest in Oyu Tolgoi. The Mongolian state has the remaining 34% of the operation. Turquoise Hill’s move comes a week after Rio Tinto’s new chief executive officer, Jakob Stausholm, overhauled the senior leadership team and created two new roles, as he seeks to repair damage to the company’s reputation stemming from last year’s destruction of a 46,000-year-old sacred Aboriginal site in Australia.
Adriatic Metals got approvals for silver project Vares in Bosnia
“I am very pleased that this key exploitation permitting step has been achieved through close co-operation between Adriatic’s Bosnia and Herzegovina team and the significant number of government and commercial stakeholders involved in the process. It clearly demonstrates the strong support we have from all levels of government in Bosnia and Herzegovina”, said Adriatic Metals Managing Director, Paul Cronin.
ASX and London-listed aspiring Balkans polymetallic project developer, Adriatic Metals, continues to successfully navigate penultimate regulatory approvals on the pathway to development of its flagship Vares silver-lead-zinc project in Bosnia and Herzegovina. Leveraging its first-mover advantage in Bosnia and Herzegovina, Adriatic is rapidly advancing the Vares project into the development phase. To that end, the company confirms it has secured the urban planning permit for the Vares project site designated to take in open-cut mining, processing plant and tailings areas at Veovaca.
Securing the permit from the country’s Government has been a complex, multifaceted process, the company says. However, it now paves the way for Adriatic to seek the final approvals needed to allow it to proceed with building the proposed Vares project, which has a forecast CAPEX of US$173 million. The company got a big vote of confidence in the urban planning application process, receiving positive feedback on the project from all significant government stakeholders as well as key commercial service providers. Having obtained the necessary urban planning, environmental and other permits, Adriatic says it plans to immediately apply to the Federal Ministry of Energy, Mines and Infrastructure for the all-important exploitation or mining permit. For the Vares project site of Rupice, the company has also received a preliminary water permit for the area designated to take in the proposed underground mine and associated infrastructure. The water permit is a forerunner to the Rupice environmental permit, which is under final review following the completion of the public hearing.
Adriatic unveiled what it describes as “captivating economics” in the recently released bumper pre-feasibility study, or “PFS” on the proposed development of Vares. The impressive PFS financials include an estimated after-tax net present value of US$1.04 billion, an internal rate of return of 113 per cent, an EBITDA of US$251 million per annum in the first five years of production and a project capital payback period of a little over a year. Overall probable ore reserves for Vares – at the Rupice and Veovaca deposits – currently stand at of 11.13 million tonnes going 150 grams per tonne silver, 1.28 g/t gold, 4.22 per cent zinc, 2.67 per cent lead and 0.43 per cent copper. Of the total reserves, Rupice speaks for 8.41 million tonnes grading 179 g/t silver, 1.66 g/t gold, 5.04 per cent zinc, 3.18 per cent lead and 0.55 per cent copper. According to the PFS, the reserves are expected to sustain mining and processing operations at Vares for an initial 14 years, with silver and gold accounting for 45.3 per cent of projected concentrate revenues totalling a massive US$3.29 billion across the 14-year life of mine. Spurred by the cracking PFS, Adriatic says work on the definitive feasibility study is under way.
Adriatic’s Vares silver-led-zinc project in Bosnia and Herzegovina
Adriatic’s Vares silver-lead-zinc project is located in central Bosnia and Herzegovina some 50km north of the capital Sarajevo. It occupies a strategic position over the established Vares mining district, taking in a number of historical mines and prospects including the high-grade silver mines at Rupice and Veovaca.
After successfully identifying and drilling a number of extraordinary, multi-commodity mineral deposits in Bosnia, Adriatic Metals has moved to lock up the wider mineral province around its key project areas. The company has now more than quadrupled the size of its ground holdings in the region and locked up most of the 25km long metal rich terrane. Adriatic’s five concession areas now cover more than 4,000 hectares and take in the Veovaca and Rupice silver ore bodies in addition to eight other prospect areas.
By any measure Adriatic has seen a meteoric rise since listing on the ASX just a couple of years ago at 20c. Its 60 and 70m long drill intersections that are littered with almost every known commodity – at commercial grades – have propelled the company’s share price to around $2.80 since then.
“Our focus now will be to continue to identify the right structural, lithological and geo-chemical conditions that resulted in the high grade Rupice silver deposit and explore for possible repeats of that mineralisation in the new concession area.”
The Vares mineral field is an east-west trending sedimentary basin that covers around 25km of strike surrounding the regional centre of Vares. The region has a mining history that dates back to the 13th century and historically boasted the largest iron ore mine in Yugoslavia immediately adjacent to the town at Smreka, which in the 1980s, produced around 1Mta of siderite-limonite iron ores to feed the nearby foundry at Zenica.
The ore bodies scattered throughout the Vares mineral field are interpreted to be sedimentary-exhalative, or ‘SEDEX’ style deposits and produce a range of mineralisation styles from siderite-limonite iron ore deposits through to silver-lead-zinc deposits similar to the company’s Rupice discovery.
Globally SEDEX deposits are of considerable economic significance and include the massive Zambian Copperbelt deposits in Africa. They were also the precursors to the world-class Carlin-type gold deposits in the United States. SEDEX deposits typically occur in clusters and, with right structural architecture in place, can develop into ore systems of colossal proportions – a message that appears not to have been lost on Adriatic market followers who have already propelled the company to a market cap of over $400m.
Adriatic has recently finalised an application with the local regional Government approving a significant expansion of the company’s mining concessions. Adriatic’s new concession areas expand the company’s ground holdings in the region from 868 hectares to over 4,000 hectares, covering two key project areas – the Rupice-Semizova Ponikva area west of the town of Vares and the Brezik-Vares East project, east of the town. These new areas lie along strike from the company’s high-grade silver-lead-zinc deposits in the region and will become priority target areas as Adriatic works to complete its feasibility studies over the Rupice and Veovaca deposits and begin to expand its resource inventory in the region. The company’s regional exploration program over its expanded Vares ground holding is already underway, with the historical exploration and mining data currently being collated and airborne geophysics planned over the wider concessional area.
Several areas within the new tenure present as targets for immediate follow up including the Brezik concession east of Vares. Brezik hosts two historical iron ore mines at Brezik and Droskovac. Droskovac also hosts a residual lead-zinc deposit that weighs in at 900,000 tonnes at 3.9 per cent combined lead and zinc. This deposit was discovered in the 1980s and has yet to be followed up with modern exploration.
Historical exploration at Vares East, adjacent to the company’s Veovaca deposit area, has identified a host of copper and barite rich targets along strike from the deposit. The Barice target has returned some enticing rock chip samples at up to 23 per cent copper and 54 g/t silver, whilst sampling in trenches at the Grubanovici, Ljevaci and Debele Mede prospects has produced samples grading up to an incredible 89 per cent barite – interestingly, these projects have not been explored since the 1960s.
Work on Adriatic’s pre-feasibility for the Rupice and Veovaca silver-lead-zinc deposits continues in the wake of this week’s resource update for Rupice with results expected in the coming weeks.
With an expanded playing field, two potential mining operations moving through feasibility and a wealth of new targets, Adriatic looks well positioned to take full advantage of a booming metals market and its trail-blazing position in the Balkans.
Tethyan Resource’s Kizevak Project of initial drill completed in Serbia
Kizevak project is the silver-zinc-lead project in Serbia. The initial drill program consisted of 11 diamond drill holes for a total of 1,867.5 metres, targeting the confirmation of historical drill and underground assay data. Tethyan Resource Corp. announced the successful completion of this initial drill program on the recently acquired license that comprises the central portion of the Kizevak project.
The results of drilling will be announced as they become available. In the meantime the Company is preparing for a larger drill programme in an effort to define a maiden resource estimate at Kizevak that is intended to commence in September following the anticipated acquisition of Tethyan by Adriatic Metals Plc. Additionally, Tethyan is currently conducting detailed soil sampling, geological mapping, and a ground magnetic survey over the Kizevak and Sastavci projects in order to further support drill planning and exploration of extensions to historically drilled mineralisation.
Tethyan Resource acquisition of past-producing silver-zinc-lead mines in Serbia is completed
Kizevak and Sastavci are former silver-zinc-lead mines in the Raska district of South-western Serbia. Serbian company EFPP d.o.o. is the holder of two exploration licences over these past-producing mines. Tethyan Resource Corp. announced that it has closed the transaction for the acquisition of 10% of EFPP and the exclusive right to purchase the remaining 90% of EFPP at Tethyan’s election within 12 months.
The Licences are contiguous with Tethyan’s existing exploration rights and the acquisition completes the consolidation of a district of known silver-zinc-lead vein-type and copper-gold porphyry deposits, presenting numerous strategic advantages;
-The Licences include two past-producing open pit silver-zinc-lead and indicate excellent brownfield exploration potential
-Staged acquisition payments allow Tethyan to focus funds on drilling
-Acquisition is a key condition precedent for the proposed acquisition of Tethyan by Adriatic Metals plc
Fabian Baker, Tethyan’s President and CEO, commented: “The acquisition of the past-producing Kizevak and Sastavci mines has been a long term goal of Tethyan’s, and so we are very pleased to have achieved this important step. With the recently announced financing and proposed acquisition of Tethyan by Adriatic Metals plc, we are well funded to commence drilling at Kizevak, which is planned to begin in early June. We see a bright future for the Raska mining district that is now consolidated under Tethyan, and look forward to developing the potential of these former mines and the significant exploration potential around them.”
Terms of EFPP Acquisition
The acquisition of EFPP will occur in two steps, an initial ‘First Closing’ completed today, whereby Tethyan has acquired 10% of the shares of EFPP and management control of the company, and a 12 month period in which to decide, in its sole discretion, whether to proceed to a ‘Second Closing’. By proceeding to complete Second Closing Tethyan will acquire the remaining 90% of the shares of EFPP. A summary of the terms of the transaction is as follows:
In consideration for 10% of the shares of EFPP Tethyan will pay to the Sellers a total of €625,000 cash, of which €100,000 was previously advanced and the remaining €525,000 payment was also made.
At any time within 12 months of First Closing, Tethyan may elect to acquire the remaining 90% of shares of EFPP on the Second Closing by:
-Granting to the Sellers a 2% Net Smelter Return over the Licences
-Issuing a total of 4 million ordinary shares of Tethyan, to be issued in four equal tranches of 1 million shares, with the first tranche issued on the Second Closing and each additional tranche issued each six months thereafter
-Paying a deferred cash payment of €500,000 on the two-year anniversary of First Closing
Mundoro Capital’s strategic mining project locations in Serbia and Bulgaria, disciplined capital
Mundoro Capital Inc. is a Canadian-based junior mining company that is utilizing the proven partner model to boost mining exploration in Serbia and Bulgaria’s Tethyan belt and is focused on investing in base metal and precious metal projects in the western portion of the Tethyan belt in Bulgaria and Serbia. The company focuses on copper and gold discoveries and is well equipped with an experienced team, a strategic investment portfolio and fiscal discipline.
The company has projects in world-class districts paired with an experienced team and proven partner model and has a clear and achievable vision to create long-term shareholder value. By utilizing the company’s chosen business model, they are able to offer their shareholders a decreased investment risk as well as major benefits.
head of TSX Company Services at TMX Group, Arne Gulstene, spoke with Teo Dechev, CEO and president of Mundoro Capital, about the company’s focus on making more copper and gold discoveries, and ways that they are leveraging their expertise in the mining industry to fund future projects.
Dechev believes that copper, in the long run, will continue to have strong demand due to the electrification of cities and the growing popularity of electric vehicles. While there has been a decrease in the short-term demand of copper due to COVID-19, Dechev sees copper recovering as a strong long-term and stable investment.
Budgets across the mining industry have been constrained and there has been a decrease in exploration due to a lack of capital. In response, Mundoro Capital has been driven to find new creative ways to continue financing vital mining exploration.
With the capital markets having changed their view on what risks they are willing to take, Mundoro Capital is establishing itself with the partner model to continue to finance their programs. This means that the company is partnering with major mining companies that will ultimately develop and mine the assets that are discovered. Mundoro Capital is also exploring streaming and royalties as an alternative to the traditional capital markets.
Dechev emphasizes the importance of mining in every society. She highlights Mundoro’s approach to responsible mineral development and the company’s three pillars of sustainable development: environmental, social and governance. The company is proud to work with local communities to build relationships and create new opportunities.
Mundoro Capital’s business model includes targeting strategic locations, identifying potential exploration areas, and partnering with major mining companies for asset development. This process decreases risks and presents major benefits for the shareholders.
So, how does Dechev sum up Mundoro Capital’s investment proposition? She believes that the company offers stable cash flow, an experienced management team, and an excellent roster of partnering companies. The company is using its international expertise in mineral finance, project evaluation, exploration and project development to create long-term shareholder value. It will be great to see how they progress with their goals.
Gold and silver mining increased in Azerbaijan in Q1 2020
Siting the State Statistics Committee, local media reported that in the period of January-March the volume of Azerbaijan’s gold and silver mining industry increased by 23 percent and 72 percent respectively year-on-year. As of April 1, 2020, the reserves of mined silver in the warehouses of manufacturing companies are 34.9 kg. Gold mining increased by 23 percent in the first quarter of 2020, amounting to 948.3 kg, while silver mining amounted to 1,193 kg, an increase of 73%.
The extracted gold and silver have been transferred for processing, the report says.
Presently, two companies – AzerGold and Anglo Asian Mining – are operating in the sphere of mining of precious metals in Azerbaijan.
In 1997, Azerbaijan signed a contract providing for the development of six fields: one in Nakhchivan, two in the Gadabay region of Azerbaijan (450 km west of Baku) and three in Kelbajar and Zangelan, currently occupied by the Armenian armed forces. Azerbaijan’s share in the contract is 51%, Anglo Asian Mining PLC – 49%.
According to the contract, a total of 400 tons of gold is planned to be extracted from these 6 deposits.
The extraction of the first gold began in 2009 from the Gadabay deposit, the extraction of silver – in 2010. Gold mining began at Gosha in the third quarter of 2013. In the summer of 2015, the company also commissioned the Gadir gold mine, and in September 2017, the Ugur mine.
AzerGold CJSC, established in 2015, is engaged in gold and silver mining. The company is engaged in the study, research, exploration, development and management of the gold and iron ore sections of Garadag, Chovdar, Heydag, Dagkeseman, the Kokhnemeden section and the Kuryakchay basin.
Tethyan Resource Corp. to purchase Kizevak and Sastavci silver-zinc-lead mines in Serbia
Tethyan Resource Corp. made an agreement to purchase a 100% ownership stake in Serbian company EFPP d.o.o. EFPP is the holder of two exploration licences over silver-zinc-lead mines Kizevak and Sastavci in the Raska district of Southwestern Serbia.
-The Licences are contiguous with Tethyan’s existing exploration rights and the acquisition would complete the consolidation of a district of known silver-zinc-lead vein-type and copper-gold porphyry deposits, presenting numerous strategic advantages:
-The Licences include two past-producing open pit silver-zinc-lead mines and host significant historical mineral resources and reserves that were reported in accordance with Yugoslav GKZ reporting criteria and indicate excellent brownfield exploration potential
-At Kizevak, historic drilling and underground channel sampling data define mineralisation that is present from surface up to 200 metres depth and 1.2 kilometres in strike length that is open down dip and along strike, representing an immediate drill-ready target
-Staged acquisition payments allow Tethyan to focus funds on drilling
-Serbia is establishing itself as a recognised mining jurisdiction, attracting significant investment interest
Fabian Baker, Tethyan’s President and CEO, commented: “This acquisition is a key step in Tethyan’s strategy to consolidate a district of historical mines and exploration prospects in Serbia. The Kizevak project in particular gives Tethyan an immediate drill ready target, and we can now drill the 1.2 kilometres of strike length, reported to host historical resources, between the former open pit mine and Tethyan’s excellent 2018 drilling results. With Kizevak as a cornerstone project the many satellite exploration targets identified by historical drilling, all within a few kilometres of Kizevak, become relevant to a possible district-wide operation. The plan moving forward is for Tethyan to commence drilling of these high-grade silver-zinc-lead targets in parallel with advancing our two copper-gold porphyry projects at Rudnica and Kremice in the Raska district of Serbia.”
Kizevak is a past-producing mine reported to host considerable historic mineral resources, along-strike from which Tethyan drilled mineralization including 12 metres at 22.03% zinc, 10.29 % lead, 167 g/t silver and 0.18 g/t gold. The mine was operated as an open pit by the Serbian state between 1984 and 2000, ceasing operations due to conflict in the region. The project benefits from numerous infrastructure advantages including water, power, road and rail access all within 5 kilometres, and a local workforce with a long history of mining. Additionally, the land comprising the wider project area is designated for mining purposes under the Serbian State spatial plan, providing many permitting benefits and efficiencies.
Mineralisation at Kizevak comprises steeply dipping, southeast striking, structurally controlled lenses of quartz-carbonate-sulphide vein breccias and stockwork zones hosted in andesite volcanics. Historic drilling and underground sampling data indicate that mineralisation occurs over a strike length of at least 1.2 kilometres, between 1 and 30 metres wide, and up to 200 metres down dip. This dominant southeast striking trend is intersected by at least one perpendicular southwest striking mineralised structure, which is inferred as an important control on high grade shoots.
Mineralisation is open down dip and along strike to the northwest, southwest and southeast. In 2018 Tethyan drilled four drill holes on its wholly owned licence 1.2 kilometres along strike to the southeast of the mine that returned mineralized intervals including:
-12 metres at 22.03 % zinc, 10.29 % lead, 167 g/t silver, and 0.18 g/t gold for 35.09 % ZnEq (Hole KSEDD002, from 130 m)
-43 metres at 4.30 % zinc, 2.49 % lead, 26 g/t silver, and 0.21 g/t gold for 7.39 % ZnEq (Hole KSEDD001, from 193 m)
including 13.1 m @ 11.28 % zinc, 5.05 % lead, 57 g/t silver, and 0.32 g/t gold for 17.44 % ZnEq (from 221 m)
-0 m @ 4.35 % zinc, 2.14 % lead, 27 g/t silver, and 0.34 g/t gold for 7.37 % ZnEq (Hole KSEDD003, from 137 m)
Sastavci was also mined historically by open pit on a smaller scale than at Kizevak and represents a priority drilling target. Outcropping, steeply dipping, massive sulphide veins up to 5 metres wide are visible in the pit walls. Tethyan collected 65 rock-chip samples across the Sastavci area, which returned assays ranging from trace to >30 % zinc (over range), 7.1 % lead, 94.3 g/t silver and 0.47 g/t gold in the Sastavci pit. A historic resource estimate is reported in the Serbian geological archives.
Additionally, to the north of the Sastavci open pit Tethyan has defined a greater than 100 ppb gold in soil anomaly over 800 metres long and 400 metres wide in strongly silica altered volcanic rocks. Rock-chip sample assays range from trace to 3.7 g/t gold, representing a separate epithermal gold exploration target.
Historic Resource and Reserve Estimates
In 1994 the Yugoslav Geological Survey reported combined estimated mineral resources in GKZ compliant A+B+C1+C2 categories of 8Mt at 45 g/t silver, 5.06 % zinc and 2.96 % lead at Kizevak, Sastavci and Karadak (a portion of the Kizevak resource, and Karadak are located on Tethyan’s existing licences).
The mineral resource estimates were reported by the state geological survey according to Yugoslav GKZ guidelines and do not comply with NI 43-101 reporting requirements and associated CIM definition standards. The authors caution that a qualified person has not done sufficient work to validate the historical estimates, and Tethyan is not treating the historical estimates as current mineral resources or reserves. Tethyan has not completed a detailed review of the historical resource or completed a new mineral resource estimate.
The historical resource estimates were completed using the polygonal method using data acquired from diamond drilling and underground sampling.
For readers not familiar with Yugoslav mineral estimates, such estimates were always stated as “reserves” and classified according to the A+B+C1+C2 or “alphabetical” classification, which was derived from the Russian system and is still applied throughout many countries in southeast Europe. The reserves had to be approved by the official Commission for Ore Reserves. The A, B, C1 and C2 categories reflect the levels of confidence in the actual tonnage exploited from a reserve, with confidence levels being – 95%, 80%, 70% and 35% respectively. Henley (2004) and others have evaluated the alphabetical classification system with respect to the compliant codes in Canada and Australia, and concluded that A+B is comparable to “measured”, C1 to “indicated” and C2 to “inferred” in internationally acceptable codes for reporting resources. However, these comparisons are only an approximation, and cannot be considered as equivalents.
To verify the historical resource estimate as current mineral resources or mineral reserves, drilling, mapping, detailed geological interpretation, geological modelling, grade mapping by interpolation using geostatistical analysis and mineral resource classification, using industry standard software, is required.
Terms of EFPP Acquisition
Closing of the transaction to acquire EFPP is subject to satisfactory due diligence and TSX acceptance on or before 15th April 2020. The acquisition of EFPP will occur in two steps, an initial ‘First Closing’ whereby Tethyan will acquire 10% of the shares of EFPP and management control of the company, and a 12 month period in which to decide, in its sole discretion, whether to proceed to a ‘Second Closing’ when Tethyan has the right to acquire the remaining 90% of the shares of EFPP. A summary of the terms of the Transaction is as follows:
In consideration for 10% of the shares of EFPP Tethyan will pay to the Sellers a total of EUR 625,000 cash on the First Closing.
At any time within 12 months of First Closing, Tethyan may elect to acquire the remaining 90% of shares of EFPP on the Second Closing by:
Paying EUR 1,375,000;
Granting to the Sellers a 2% Net Smelter Return over the Licences;
Issuing a total of 4 million ordinary shares of Tethyan, to be issued in four equal tranches of 1 million shares, with the first tranche issued on the Second Closing and each additional tranche issued each six months thereafter;
Paying a deferred cash payment of EUR 500,000 on the two-year anniversary of First Closing.
Miedzi Copper Corporation discovers deposits of silver and copper in Poland
Miedzi Copper Corporation had discovered deposits of silver and copper worth an estimated $60 billion in western Poland. Under Polish law natural resources belong to the state, so, if mined, the deposits could provide a handy boost to the nation’s coffers.
The riches lie buried around 1,900 metres beneath the surface near the towns of Zielona Góra and Nowa Sól, and, if extracted could create 8,600 jobs and bring in an estimated PLN 1 billion a year to the state budget for decades to come, according to Miedzi Copper Corporation, the Canadian firm that discovered the deposits.
“The value of the deposits is worth an estimated $60 billion,” said Professor Stanisław Speczik, CEO of Miedzi Copper Corporation.
“We want to start building the mine in 2024-25. This deposit is the property of the state so we will only get a mining license.”
It may not be all good news for the Canadian firm, however. It has been in competition with KGHM, a Polish mining giant, for a number of years, and there is speculation that the government might award the license to the local firm rather than the foreign company.
There are also environmental concerns
Although modern mining methods have less of an environmental impact than their predecessors there are fears new mines could damage the ecology and lead to people having to give up their homes so the mine can be built.
The news of the new deposits should, however, bolster Poland’s already good standing as a country rich in metals.
According to the Polish National Geological Institute, Poland ranked second and fifth in the world in 2015 when it came to anticipated economic resources of silver and copper.
Tajikistan gifts silver mine license to Chinese company
Lawmakers in Tajikistan have voted to ratify an agreement giving a Chinese company development rights for a silver mine in the Pamir mountains.
Parliament voted overwhelming in support of the decision on October 1, on the day that marked the 70th anniversary of the foundation of the People’s Republic of China.
RFE/RL’s Tajik service, Radio Ozodi, reported that the field in question is called Yakjilva and is located at an altitude of 4,200 meters in the Murghab district of the Gorno-Badakhshan autonomous region, or GBAO. The deposit will be developed by Kashgar Xinyu Dadi Mining Investment, a metals miner based in China’s Xinjiang province.
The initial deal was signed on June 14, on the eve of a visit to Tajikistan by Chinese leader Xi Jinping. A number of bilateral documents were signed during Xi’s stay, including a deal for Beijing to issue a non-repayable grant, an agreement on the second stage of construction work on the road linking Dushanbe to Kulma, which is on the Chinese border, and the refurbishment of the Bokhtar-Kulyab railroad.
According to Radio Ozodi, whose reporter attended the session of parliament, Kashgar Xinyu Dadi Mining Investment has allocated $39.6 million toward developing the field.
Farrukh Hamralizoda, the head of the state investment committee, said that the field would be developed over a seven-year period, during which time the Chinese company will be exempt from all tax and customs payments. Sixty percent of the workers at the field will be Tajik nationals, while the remaining specialists will come from China, Hamralizoda said.
At one stage, however, Hamralizoda appeared to contradict himself. When Shukurjon Zuhurov, the speaker of parliament, quizzed him about what benefits Tajikistan would stand to get from the project, Hamralizoda claimed that Tajikistan would earn tax revenue.
The terms of this arrangement remain undisclosed.
Almost half of Dushanbe’s $2.9 billion external debt – around $1.38 billion – is owed to China. It is unclear how Tajikistan is likely to raise the funds to pay off those liabilities – a fact that has prompted suspicions that the government intends to buy its way out of debt by relinquishing development rights over mineral reserves in nebulous giveaways to Chinese companies.
There have been varying estimates about the size of the Yakjilva reserve. Asia-Plus news website cited data provided in 2016 by the Main Directorate of Geology that said that Yakjilva might hold up almost 205 tons of silver reserves. Hamralizoda offered a lower figure of 113 tons on October 1. The discrepancy has not been explained.
But in 2016, deputy prime minister Azim Ibrohim, who has experience working in the Main Directorate of Geology, noted that the unprocessed ore at Yakjilva is far richer in silver content than what is found at the larger Kon-i Mansur mine, which is located in northern Tajikistan. Each ton of ore at the Murghab deposit contains 640 grams of pure silver, as opposed to 50 grams at Kon-i Mansur, Ibrohim said.
A spokesman for Kashgar Xinyu Dadi Mining Investment attending the hearing of parliament said average salaries for employees at its mine would be around 2,600 somoni ($260).
Hamralizoda told Radio Ozodi that the metal extracted in the Pamirs would be exported in its raw form.
“Since the silver reserves are not so large, it is not profitable to build a separate silver processing plant inside the country,” he said.