Russia's GV Gold mulls underground mining at Golets Vysochaishy

MOSCOW. Aug 6 (Interfax) - Gold miner Vysochaishy (GV Gold) is considering transitioning to underground mining at its oldest asset, the Golets Vysochaishy deposit in Irkutsk Region, which would make it the company's first underground mine.

"Previously there was no need to go underground, there were enough reserves being mined by the open-pit method. But this is already a mature deposit. We went underground and see promising ore bodies," GV Gold CEO Sergei Gostev said in an interview with Interfax.

"We'll decide after the completion of geological exploration. The amount of exploration done so far gives grounds to say that the mine life will be extended by transitioning to underground mining," Gostev said.

The company is also considering processing tailings at Golets Vysochaishy. "In the period of Golets Vysochaishy's operation, a substantial amount of tailings have accumulated that were previously considered unprofitable, but at the current gold price become economically viable for processing," Gostev said.

"Therefore, looking at our long-term plans, we see hat Golets Vysochaishy will certainly operate after 2030," he said.

The company has not yet completed exploration and is not disclosing the gold content in its tailings.

"I can say that it is economically viable to process 0.25-0.30 grams per tonne at existing processing facilities. This is low content, but when the capacity and technology are already established and there is no significant amount of mining work, it's profitable to process 0.3 g/t," Gostev said.

The growth of gold prices in general enables gold miners to use raw materials that it was previously unprofitable to tap.

"Given the growth of gold prices, we reviewed the quality of raw materials that we're prepared to bring into processing and saw that we can extend the life of mine at many deposits. In some places we can convert noncommercial reserves to commercial ones, in others start processing tailings. Yes, the cost per gram will increase then, but we look at it comprehensively - not only the cost is important to us," Gostev said.

"Why can we afford this growth? Because the price has risen. We maintain a margin that is necessary for renewal of the mineral resource base, recoupment of investment and payment of dividends to shareholders," Gostev said.

GV Gold, one of Russia's top ten gold miners, operates in Irkutsk Region and Yakutia.