THE BOURSE WHISPERER: Great Western Exploration (ASX: GTE) has signed a Memorandum of Understanding with a Kazakhstan company to carry out a feasibility study to determine the economic potential to mine and treat low grade gold ore stockpiles.
The stockpiles are located near the former soviet regional gold mining centre of Stepnogorsk.
Great Western said if the results from the study are positive it will then enter into a formal Joint Venture.
Stepnogorsk is a historical gold mining and chemical industrial centre located in central Kazakhstan, where there are numerous historical gold mines and prospects dotted throughout the district.
Location of Gold project in Kazakhstan. Source: Company announcement
According to Great Western these include multi-million ounce resources that are still in production.
The company considers the area to have potential for developing a gold mining operation with both short-term production opportunities and substantial exploration upside.
“The local JV partner has secured the premises, most of the permits and much of the equipment required to build a processing plant to process up to one million tonnes of gold ore per annum and is currently in the process of acquiring the necessary sub-soil rights to mine low grade gold ore stockpiles and several additional other areas where there is the potential for further in-ground resources,” Great Western Exploration said in its ASX announcement.
Great Western indicated drilling and metallurgical test work will be required, for which it has budgeted approximately US$250,000 to complete a feasibility study.
The main focus of the JV will be low-grade gold ore stockpiles that according to the official records have an average grade of 0.9 grams per tonne gold.
Great Western said it has carried out some preliminary volume surveys of the stockpiles, that are broken and above ground, from which it has estimated approximately five million cubic metres of material.
The JV also includes several exploration areas less than five kilometres from the proposed treatment facility where historical reports have indicated gold in surface trenching up to 3.5g/t.
The company has not confirmed the validity of these reports and explained work will only be conducted on these prospects if there is a positive outcome to the feasibility study on the mining and treatment of the stockpiles and are subsequently put into production.
“It has been reported that gold mining in the Stepnogorsk region during the Soviet era generally targeted higher grade ore, usually around five grams per tonne or higher, mainly due to the extractive processes used at that time,” Great Western said.
“As a result material of lower grades was either stockpiled or left undeveloped.
“The company can see potential not just with this project but the Stepnogorsk region in general and there is real opportunity to build a substantial gold mining business in the area.
“The company believes the key to unlocking this potential is developing strong partnerships with local companies and government.”