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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Marakand | LSE:MKD | London | Ordinary Share | GB0033883835 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.10 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:3463D Marakand Minerals Limited 27 September 2004 MARAKAND ANNOUNCES COMPLETION OF THE KHANDIZA FEASIBILITY STUDY London, 27th September 2004 Marakand Minerals Limited ("Marakand") is pleased to announce a positive completion of the Feasibility Study on the Khandiza polymetallic deposit in Uzbekistan, the results of which confirm the project is robust. With a pre-production capital requirement of US$71.23 million, operating costs are $35.35 per tonne of ore mined and cost of sales (transportation, smelter refining and treatment costs) are $37.83 per tonne of ore mined. All operating, transport, refining and treatment, and capital costs include a 15% contingency. Based on a zinc price of US$970 per tonne (USc44/lb), a lead price of US$570 per tonne (USc26/lb), a copper price of US$2000 per tonne (USc91/lb), a silver price of US$5.50 per ounce and a gold price of US$385 per ounce the revenue less operating costs show a payback of less than 2.5 years. Significant improvements to earlier studies have been made, resulting in lower capital and operating costs, whilst minimizing environmental impacts. Underground mining operations will commence at levels that require minimal access development and have above average ore grades and widths. A simplified flow-sheet has been developed encompassing primary milling at the Khandiza mine followed by gravity transport of the ore by pipeline to the flotation plant and tailings facility at the existing Shargun railhead. Planned annual production is 650,000 tonnes of ore with 500,000 tonnes planned during ramp up in the first year. Underground mine development and process plant construction are scheduled to be completed within a 13 month period following project approvals and availability of finance. The completed Feasibility Study will now be lodged with the State Committee of Geology and Mineral Resources for the Republic of Uzbekistan ("Goscomgeology"). In accordance with Decree No 359, Marakand and the Uzbek Government will finalise terms of the Concession Contract on an exclusive rights basis. This will confirm ownership rights and the fiscal terms for the project development and the proposed 15-year concession period. The Khandiza project is included in the Republic of Uzbekistan Foreign Investment Programme pursuant to Decree No 444 adopted on 19th December 2002. Marakand is being encouraged by the Uzbek government to develop the project as soon as possible and is targeting completion of the concession documentation in Q1 2005. Concurrent with the above Marakand intends to explore project-financing options and to complete the Environmental Impact Assessment ("EIA"). FEASIBILTY SUMMARY Resource Russian and Uzbek geologists have extensively explored the Khandiza Deposit, with 77,000m of core drilling and 19,000m of underground development, enabling a Soviet Feasibility Study to be prepared. The project was further evaluated by Oxus Resources Corporation ("Oxus") from 1996 until the formation of Marakand in November 2003. A confirmation drilling programme (30 holes totalling 3,776m) was completed by Oxus in 2001, improving the resource confidence and providing further geological and geotechnical data for mine design purposes. Prior to undertaking the mine design, a revised geostatistical resource block model was prepared. The table below summarises the geological resource above an assay cut-off of 2.0% zinc. The resource is classified in compliance with the internationally recognised JORC Code. ======== ======= ====== ====== ====== ====== ====== Class Resource Zinc Lead Copper Silver Gold Mt % % % g/t g/t ======== ======= ====== ====== ======= ====== ====== Measured 4.176 8.33 3.60 0.93 124 0.38 Indicated 7.649 7.29 3.67 0.90 131 0.38 Subtotal 11.825 7.66 3.65 0.91 129 0.38 ======== ======= ====== ====== ======= ====== ====== Inferred 2.587 5.36 2.81 0.65 161 0.38 Total 14.412 7.24 3.50 0.86 134 0.38 ======== ======= ====== ====== ======= ====== ====== The contained metal in the above resource estimation amounts to 1,044,000 tonnes of zinc, 505,000 tonnes of lead, 125,000 tonnes of copper, 62.3 million ounces of silver and 176,000 ounces of gold. Mine Design and Reserve A ramp-access, mechanised underground mine is proposed with a production rate of 650,000 tonnes of ore per year. Ore recovery, using the cut and fill mining method, will be high due to the wide ore zones and excellent ground conditions. To maximise use of existing workings and reduce costs ore will be crushed underground and transported to surface by conveyor. The table below details the mineable reserves for the first 14 years of production, above a break-even cut-off of 4% zinc. ======== ======= ====== ====== ====== ====== ====== Class Reserve Zinc Lead Copper Silver Gold Mt % % % g/t g/t ======== ======= ====== ====== ======= ====== ====== Proved 3.377 8.38 3.60 0.95 122 0.36 Probable 5.507 7.83 3.95 0.98 128 0.37 Total 8.884 8.04 3.82 0.97 126 0.37 ======== ======= ====== ====== ======= ====== ====== In addition 0.72Mt of inferred resource has been included in the production schedule in year 15 at an average grade of 6.08% zinc, 3.31% lead, 0.75% copper, 166 g/t silver and 0.39 g/t gold (with dilution and recovery applied). The total production for the first 15 years mine-life will be 9.61Mt at an average grade of 7.90% zinc, 3.78% lead, 0.95% copper, 129 g/t silver and 0.37 g/t gold. Metallurgy and process design Metallurgical test-work conducted by Marakand has confirmed results of previous test-work programmes including a 15 tonne pilot scale test. The optimised metallurgical process selected provides the following recoveries: *89.1% of the zinc recovered into the zinc concentrate (with a concentrate grade of 54.8% zinc) *74.7% of the lead recovered into the lead concentrate (with a concentrate grade of 56.1% lead) *77.5% of the copper recovered into the copper concentrate (with a concentrate grade of 25.3% copper) *23.6% of the silver is recovered into the lead concentrate, and 41.8% into the copper concentrate *21.0% of the gold is recovered into the lead concentrate, and 24.3% into the copper concentrate. Site layout and plant design The milled ore will be gravity transported by a 43km pipeline from Khandiza to the coal-mining town of Shargun, where the secondary milling and flotation plant will be located. The flotation circuit will produce separate zinc, lead and copper concentrates. Marakand has acquired industrial land ideally located next to the Shargun railhead, which will enable receipts of construction and operating supplies, and despatch of the concentrates produced. A disused clay pit, located approximately 1km from the flotation plant, is to be used as the tailings storage facility. Power, water and transport infrastructures are already available. Environmental An EIA is being prepared to meet standards required by international funding agencies, with completion expected by the end of the year. Concentrate smelting and refining A concentrate and metal marketing study has been completed. For the purposes of the Feasibility Study, it has been assumed that 100% of the zinc and copper concentrates will be toll-smelted at the Almalyk Smelter in Uzbekistan, and that 100% of the lead concentrates will be sold for smelting in Kazakstan. Nevertheless management, in discussion with a number of smelters, has received letters of intent indicating that demand for concentrates and metals is well in excess of planned production. Concentrate production, in dry metric tonnes, is scheduled as follows: *Zinc concentrate - average of 101,800 tonnes per year for the first five years, and 82,200 tonnes per year over 15 years *Lead concentrate - average of 35,600 tonnes per year for the first five years, and 32,300 tonnes per year over 15 years *Copper concentrate - average of 23,400 tonnes per year for the first five years, and 18,700 tonnes per year over 15 years Revenues are generated from: * Sale of zinc metal returned (93%) after toll smelting of zinc concentrates * Sale of copper metal returned (94%) after toll smelting of copper concentrates; plus credits for 70% of the contained silver and gold above the payable threshold. * Sale of lead concentrates, with payment on the basis of 95% of the contained lead; plus 95% of the contained silver and 90% of the contained gold above the payable threshold. Gross revenue contribution comprises 60.45% from zinc, 14.54% from lead, 13.20% from copper, 11.03% from silver and 0.78% from gold using the metal prices assumed. Operating costs Cash operating costs (US$ per tonne of ore mined) averaged over the first 15 years are estimated as follows: US$/t* =========== ======= Mining 16.23 Processing 9.53 G&A 4.98 15% contingency 4.61 ----------- ------- Total 35.35 =========== ======= * per tonne ore mined Capital costs Pre-production capital costs are estimated as follows: US$m ============= ======== Mining 13.43 Processing 22.38 Infrastructure 13.44 Contractor and Freight 8.25 Owners costs 3.80 First fills 0.68 15% contingency 9.25 ------------- -------- Total 71.23 ============= ======== The initial working capital funding requirement is estimated at US$ 6.21m Marakand Minerals is a mining exploration and development company focused in Central Asia, and listed on the Alternative Investment Market (AIM) in London, ticker symbol MKD.L. For further information, please contact: Alasdair Stuart Joanna Solino Alex Buck Chief Executive Officer Investor Relations Officer Buck Communications Marakand Minerals Limited Marakand Minerals Limited Tel: +44 (0)7932 740 452 Tel: +998 93 171 2401 Tel: +44 (0)20 7907 2000 This information is provided by RNS The company news service from the London Stock Exchange END MSCQKAKNOBKDOCB
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