Centerra Gold confirms output drop at Kumtor in 2012, plans 60% growth in 2013
BISHKEK. July 27 (Interfax) - Gold production at Kyrgyzstan's largest gold deposit, Kumtor, might surge 60% next year and grow by another 25% in 2014 after an anticipated drop of 30-33% in 2012.
Gold production at the mine is expected to drop to 12.13-12.75 tonnes this year from 18.1 tonnes in 2011, according to a report from Kumtor Operating Company (KOC), a wholly owned subsidiary of Canadian mining company Centerra Gold Inc.
KOC produced 1.9 tonnes of gold in the first quarter of 2012, and planned to produce 1.12 tonnes in the second quarter, 1 tonne in the third quarter and 8.43 tonnes in the fourth quarter.
Centerra said earlier that ice movement in the southeastern part of the mine had delayed access to a section of the deposit with high-grade ore, and as a result production would be reduced by a third from the previously planned 17.8-19.4 tonnes.
The steep drop in output at the beginning of 2012 was also due to a 10-day strike by KOC employees in February, lower grade ore, and growth of amortization charges due to expansion of the fleet of mining equipment. This was exacerbated by the extra costs of removing ice and overburden. The unforeseen acceleration of movement of ice and rock in the southeast section of the central mine prevented access to the section that was supposed to be mined this winter. KOC therefore plans to step up operations in the southwestern part of the mine to gain access to new resources, and it expects to start mining higher grade ore in September.
The company believes strict adherence to the mining schedule will gradually increase production over the next three years from about 12.5 tonnes in 2012 to 20.2 tonnes in 2013 and 25.2 tonnes in 2014.
The company expects capital expenditures at Kumtor to total $370 million in 2012. This will include $32 million in modernization of plant and equipment, and $338 million in development, including $147 million for preparation and removal of overburden, $126 million for acquisition of mining equipment and $56 million for underground mine installations. The company is also planning to spend $15 million on exploration.
KOC in July released its annual environmental protection report for 2011, which includes economic indicators and plans for the future.
KOC sells the dore gold alloy it produces at Kumtor to Kyrgyzstan's Kyrgyzaltyn for refining and subsequent sale, as stipulated by an agreement between KOK, Kyrgyzaltyn and the government of Kyrgyzstan.
Kyrgyzaltyn owns 32.8% of shares in Centerra Gold, the leading North American gold producer and the largest western company mining gold in Central Asia.
