The organizational plan includes four stages and describes the schedule for implementation of the investment project "Kadara". During the first and second stage, the investment funds shall be developed and the third stage shall see the gold-processing complex reach its design capacity and the Company shall become fully self-repaying. The fourth stage shall start the scheduled use of the deposit provided availability of industrial gold mining.
|Stage||Task||Timing||Expected results||Capital expenditures|
|Stage I|| Continuation of prospecting and evaluation geological exploration works
Acquisition of mining equipment and quarrying
Design of the gold-processing complex
Design of the small hydroelectric power station
Trial gold mining
|2017-2018|| Preliminary estimation of reserves and resources on the state balance of the State Reserves Committee:
Acquisition of mining equipment
Construction of the quarry on the Kaltagay site
Obtaining of design estimates and working documentation for the construction of the gold-processing complex and small hydroelectric power station
Order of equipment and components for the gold extraction complex and small hydroelectric power station
Receiving as a result of trial gold mining 150 kg of gold
|32,480.43 ths USD|
|Stage II|| Continuation of appraisal of geological exploration works
Acquisition of mining equipment and quarrying
Construction of the gold-processing complex (1st stage)
Construction of the small hydroelectric power station
Industrial gold mining
|2019-2020|| Setting up of industrial reserves and resources for the state balance of the State Reserves Committee:
Feasibility study of exploration conditions
Acquisition of mining equipment
Construction of a quarry on the Kadara site
Commissioning of the first stage of the gold-processing complex with a capacity of 1.75 million tons of ore per year
Commissioning of the small hydroelectric power station with a design capacity of 12 MW
Receiving 2,250 kg of gold as a result of industrial production
|64,641.13 ths USD (including 37,121.56 ths USD due to refinancing)|
|Stage III|| Construction of the gold-processing complex (2nd stage)
Industrial gold mining
|2021|| Commissioning of the gold-processing complex with a design capacity of 3.5 million tons of ore per year
Receiving 4 250 kg of gold as a result of industrial production
|23,642.85 ths USD (refinancing)|
|Stage IV||Field Development||2021-2031|| Annual figures :
The short-term objective of the Company (until the end of 2018) is continuation of prospecting and evaluation work in order to prepare and submit to the Department of Mineral Resources for the Trans-Baikal Territory (Zabaykalnedra) a report including calculation of gold and associated components of categories С 1 and С 2, and the expected resources of category Р 1.
To this end, the Company plans the following works:
In order to increase the short-term value of assets, with relatively low investment costs, the Company intends to carry out works according to the following program:
During 2017-2018, the following mining machinery and equipment shall be purchased:
Initially, construction of a quarry is planned on the Kaltagay site. Before starting the construction of the quarry, the specifications of the main technological processes shall be calculated i.e. drilling of blast holes, blasting schemes, mining of rock mass, quarry transport, dumping and reclamation. The capacity and the required mining equipment have been calculated. The maximum discounted income from the activity of the enterprise shall serve as a criterion for determining the final boundaries of the quarry. Specific values of production areas shall be determined by calculation, with due account of the general business expenses and depreciation charges. Based on the optimization results, the quarry with transport communications shall be built at the end of the development. The ore productivity of the quarry is determined as equal to the projected capacity of the stage-by-stage introduction of the gold recovery complex, thus, the maximum productivity will not exceed the actual one based on the mining conditions - 1,000,000 tons of ore.
According to the standards of technological design for these conditions, a year-round operating mode of the quarry is adopted. The development of the deposit will be conducted by a strictly dependent development system with external heaping, which takes into account the degree of dependence of mining, overburden and mining preparations on each other in time and space, the direction of excavation and the formation of rock dumps. Preparation of rock mass to the excavation is done with the drilling and blasting method. The technology for the drilling and blasting operations and the type of drilling equipment used for it have been adopted with due account for the physical and mechanical properties of the rock massif.
The advantage of the new construction of the gold-processing complex is designing the optimal layout of the factory premises, optimizing the location of the equipment and thereby significantly reducing the energy costs. In general, the gold recovery factory is a combination of unique technologies, where every type of equipment is selected by calculation and connected as a single unit. All processes will be fully automated and consolidated into a single information and management complex that controls all production.
Provided simultaneous geological prospecting, construction of a gold-processing complex and gold mining, the modular design of the gold-processing complex, which comprises complete modules based on standard blocks, will be the best option. It is also common knowledge that modular factories should be built in remote areas with an undeveloped infrastructure.
Construction of a gold-processing complex with a mixed processing technology (gravity concentration and cyanide leaching) and a stepwise arrangement (a gravity-mechanized ore transportation system) is planned.
The design of the gold-processing complex shall include the following works:
During developing the project documentation, a three-dimensional model shall be created that would visually show the relative location of the processing equipment, pipelines, engineering communications and provides a real picture of the future facility. Based on the project documentation, after obtaining a positive opinion of the Federal Autonomous Office "Main Department of State Expertise" (FAO "Glavgosexpertiza of Russia"), working documentation shall be developed.
The construction of a small hydro power station is an integrated engineering project with many components and technical researches, both at the preliminary stage and at the implementation stage, are critical for the proper use of the terrain potential and the optimal payback of the power plant. Therefore, the order and manufacture of equipment will be combined with the schedule for the design of the small hydroelectric power station, which consists of four stages and includes the following works:
At each stage, the project shall be evaluated and approved. After the approval of the technical project, construction financing is commenced in accordance with the estimate and financial calculations, the construction site is allocated, orders for equipment and mechanisms are placed, the general contractor is selected, a general customer-management of the hydro unit is established and construction works are commenced at the site. Construction and installation work is carried out by the general contractor and subcontractors - construction and installation companies specializing in a certain type of work. Quality control, acceptance and payment for work shall be the responsibility of the customer. The design supervision of the project is carried out by the general designer.
The small hydroelectric power station is designed for construction on the Amazar River.
The structure of the small hydroelectric power station construction project shall include the following documentation and information:
The project for construction of a small hydroelectric power station is designed as topographic maps, drawings, charts and explanatory notes.
An important part of the design of the waterworks is engineering surveys. Engineering surveys shall ensure a comprehensive study of the construction area environment, local building materials in order to obtain the data necessary for the development of economically and technically sound projects with due account for environment protection and rational use.
At each design stage, engineering surveys shall be performed with varying degrees of detail and shall be subdivided into surveys for pre-project documentation, project surveys and surveys for engineering documentation. The scope and requirements for engineering surveys in construction are generally regulated by the Construction Standards and Regulations, as well as the industrial regulatory document designed specifically for hydraulic engineering. The engineering survey shall include:
The basis of engineering and geodetic surveying is topographical survey of the terrain and drawing up of topographic maps. The project documentation for environment observations shall include a structural diagram and technical solutions of the monitoring system for the status of structures, natural and man-made effects thereon and determine the criteria for their safety.
The small hydroelectric power station, being a hydraulic engineering structure, shall be designed based on the requirements of the integrated use of water resources and spatial planning charts developed in accordance with the Water and Town Planning Codes of the Russian Federation. Based on the design estimates, after receiving a positive opinion of the Federal Autonomous Office "Main Department of State Expertise" (FAO "Glavgosexpertiza of Russia"), the design documentation shall be developed.
In 2018, during the exploration, a pilot gold mining in limited quantities is planned, which will result in 150 kg of gold.
The list of geological prospecting works includes the following:
During 2019-2020, of the following mining equipment and equipment shall be purchased:
The construction of a quarry is planned in the Kadara area in three stages. Before starting the construction of the quarry, the calculation of the parameters of the main technological processes and the calculation of the productivity and the required amount of mining equipment shall be performed. The maximum discounted income from the activity of the enterprise shall serve as a criterion for determining the final boundaries of the quarry. Specific indicators for production areas shall be determined by calculation, with due account for the general economic expenses and depreciation charges. Based on the results of the optimization, the quarry with transport communications shall be built at the end of the development.
The ore productivity of the quarry shall be equal to the design capacity of the stage-by-stage introduction of the gold extraction complex, thus, the maximum productivity will not exceed the actual mining conditions – 2,500 thousand tons of ore.
In accordance with the technological design standards for these conditions, a year-round operating mode of the quarry is adopted. The development of the deposit will be carried out by a strictly dependent mining system with external heaping, which accounts for the dependence of mining, overburden and mining preparations in time and space, the direction of ore excavation and the formation of rock dumps. Preparation of rock mass for excavation is carried out by the drilling and blasting method. The technology for the drilling and blasting operations and the type of drilling equipment used in this regard have been adopted with due account for the physical-mechanical properties of the rock massif.
The site for construction is selected outside the mineralization zone, it has a continuous gradient (with rectilinear sections) of about 10-120 southwards. Lowering the level of the surface (the slope of the terrain) allows for better use of gravity transportation of products from shop to shop, as well as to the tailing pond.
The location of the gold-processing complex nearby the developed field will not require large capital expenditures for construction and construction of transport communication means (roads and, in the long run, railroad tracks) and will minimize the establishment of partnership with suppliers of equipment and chemical reagents, as well as with other enterprises.
The gold-processing complex will consist of the main production areas, workshops, offices and support services:
The structure of the gold-processing complex shall follow the processing line in accordance with the developed regulations, the capacity of the enterprise, the operating mode and the construction and layout decisions. It should be noted that studies have shown that the best technology for processing of ore deposits is the gravity-cyanide technology, which ensures high gold recovery (85.8%) with acceptable costs. The obtained enrichment figures will be included in the technological regulations.
Before the construction of the small hydroelectric power station is completed, the power designed supply of the gold-processing complex shall a temporary connection to the unified power system of the Trans-Baikal Territory.
The equipment for the gold-processing complex shall be supplied by scheduled deliveries from the selected manufacturers of main process equipment, auxiliary equipment, components and materials, in accordance with the project documentation.
The indicative list of construction and installation works is as follows:
The indicative list of commissioning works is as follows:
As a result of Stage II of the Organizational and Production Plan the first stage of the gold-processing complex with a capacity of 1,750 thousand tons of ore per year should be put into operation.
An important part of the small hydroelectric power station project is the construction management project, which defines the general layout of the construction of the hydroelectric complex (the general layout is one of the most important parts of the hydroelectric facility project, it includes the master plan of the hydroelectric complex, which contains a complex solution of all the issues of its construction - sequence, stages and deadlines of construction, units, location of construction yards, transport communications, etc.).
Based on the technical solutions of the construction management project, a method statement is drawn up, based on the engineering drawings, the availability of a fleet of construction machinery and equipment, manpower as well as the material and technical support of the construction. The method statement shall be drawn up involving the construction company, and, in some cases, should be developed by the construction company only, and based on its technological resources, with the subsequent approval of the method statement by the project company. No hydraulic engineering works can be started without the method statement.
To reduce the amount of earthworks, as well as the capital costs of construction, and to increase the security of the small hydroelectric power station, a siphon type water intake shall be built, which will not violate the integrity of the existing earth dam.
Given the simultaneous development of project documentation, equipment manufacturing, construction and installation, the small hydroelectric power station shall be commissioned in 15-18 months.
The cost of electricity generated at such hydroelectric power station shall not exceed 0.45-0.5 rubles per 1 kW/h, which is 1.5 times lower than the cost of electricity actually sold by the power system.
The construction of the small hydroelectric power station can be conventionally divided into three stages: preliminary, main and final.
The preliminary period covers the time from the beginning of the construction (opening of the title) to the beginning of the construction of the main facilities. (The title list in the Russian Federation is a list of objects included in investment programs (investments) and financed from a single source). The opening of the title can be done under a different procedure if the capital investments are not state-related, but belong to private owners (customers).
The construction of the hydroelectric power station has a number of features that distinguish it from other types of energy facility construction (thermal power stations, power electricity lines) and industrial construction. Each hydropower plant is directly influenced by the water regime of the river (lake, sea) and largely depends on the environment of the construction area (topography, hydrology, engineering-geological conditions, seismicity, etc.) and its geographic location (distance from roads, energy sources, populated areas, etc.).
Therefore, the organization of the construction of the small hydroelectric power station will be started based on the pattern for creating small, but highly mechanized units with high professional training, which would allow using both the construction and assembly expertise of the personnel.
Along with the preparation of such units, they shall be provided with low draught floating platforms for a shallow river with concrete mini-factories, cement warehouses, repair shops for construction equipment, wood processing shops, diesel power stations, comfortable dormitories, canteens, medical centers and other facilities required for the work and life of people. Such mechanized "landing forces," immediately upon arrival on the site of the future hydroelectric power station, can commence the main work without a long preparatory period.
The main period of construction is defined by the fact that the constructions are located in the river bed or next to it and are exposed to water. Therefore, there is a need to protect the construction sites from this impact or plan the sequence of the structure erection according to the standby periods during river discharges in the construction period.
The period of the main works covers the time from the beginning of the construction of the main facilities to the start-up of the first unit of the hydroelectric power station. Commissioning of each unit is confirmed by an act of a special commission, which is appointed by the parent organization of the owner to accept the facilities.
Permanent and temporary structures shall be arranged in a way to ensure the best use of the terrain, to make the industrial base closer to the site of the hydro system and minimize the transportation costs. To ensure the optimal construction technology, the mutual arrangement of the individual facilities of the industrial base and the facilities of the hydropower unit is coordinated. To link the location of permanent and temporary structures, as well as the engineering networks in their layout and height, a construction master plan shall be drawn up.
In order to avoid inconsistencies in the construction process, the general contractor shall draw up an as-build construction master plan, which shall be updated (at least once every few days) to include the actual layout and height of the object under construction and utilities, especially the underground ones. Without such day-to-day control, the construction of a facility, especially a temporary one, may interfere into the territory occupied by an existing object, into underground engineering networks, etc.
The most important stage of the main period is the stopping the river flow by pouring stones and concrete cubes in the running water. Stopping of river flow shall be carried out after the readiness of the concrete structures to diversion flows and is usually scheduled for the period of minimum water flow in the river. Before the beginning of the flow stopping, the river bed shall be narrowed to the minimum possible level (washout), so that the water velocity would not be able to move stones of small and medium size.
The main period of construction features the highest rates and volumes of construction and installation works. A significant stage of the main period before commissioning the first unit is the first introduction of pressure onto the hydraulic structures, preceded by an equally significant stage of flooding the foundation pits after due preparation of the hydraulic structure.
This stage shall be preceded by listing various kinds of links connecting the inner rooms of the small hydroelectric power station to the lower and upper tunnels and safe sealing of the links. The decision to flood the underwater part of the small hydroelectric power station shall always be taken based on an act confirming the readiness of part of the facilities for flooding drawn up by a special commission of the general contractor, the customer and the project organization.
The final period covers the time from the commissioning of the first hydroelectric unit to the commissioning of the whole small hydroelectric power station. During this period, construction and installation works shall be completed, the equipment shall be calibrated, the final planning and landscaping shall be completed as well and temporary facilities removed or transferred.
The equipment required for small hydroelectric power stations includes turbines, generators, automation systems, hydraulic systems and their components, pressure pipelines and communication systems. The flow parts of all turbines are designed using the mathematical modeling method.
The Company has managed to apply an original patented technical solution for introduction of an automatic control system for the small hydroelectric power station. Such system does not require the constant presence of maintenance personnel at the facility - the hydraulic unit reliably operates in an automatic mode. The control system will be designed based on a programmable controller, which allows for visual monitoring of the parameters of the hydraulic unit on the computer screen.
Thus, Stage II of the Organizational and Production Plan provides full commissioning of the small hydroelectric power station with the design capacity of 12 MW and estimated average annual electricity generation of 40 million kW/h.
In 2019-2020, as the facilities of the gold-processing complex are gradually commissioned, the expected commercial gold mining shall be 2,250 kg.
In 2021, the Company plans to refund 23,642.85 thousand USD received from net profit in order to complete the second construction stage of the gold-processing complex using complete modules, and thus, by the end of Q1, 2021, commission the gold recovery complex with the project capacity of 3.5 million tons of ore per year.
In 2021, as the facilities of the gold-processing complex are gradually commissioned, the expected commercial gold mining shall be 4,250 kg.
The fourth stage includes further development of the Kadara gold deposit during the period from 2022 to 2031, i.е. until the expiry date of the current license. The resource base can be increased by purchasing adjacent license areas.
Annual development figures:
Production volume - 8.5 tons of gold
Revenue - USD 330 mln
EBITDA - USD 202.7 mln
The small hydroelectric power station with the capacity of 12 MW will be able to provide all required electricity to both the gold extraction complex and a number of residential and industrial facilities in the region.