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Gold-copper plant opens in Azerbaijan

26 May 2009 16:02 (UTC +04:00)

Azerbaijani President Ilham Aliyev also participated in the opening ceremony, Presidentâ€™s press service told APA. The head of state was told that in 1997 Azerbaijanâ€™s Azergizil State Company signed agreement with R.V. Investment Group Services LLC of the US on development of gold deposits of Gadabay, Gosha, Ordubad group (Piyazbashi, Aghyurd, Shekerdere, Keleki), Soyudlu, Gizilbulag and Vejneli. Gadabay gold-copper deposit development project is implemented in accordance with production sharing agreement between the Government of Azerbaijan (51%) and Azerbaijan International Mining Operating Company (49%).

Gadabay field was known in ancient times and explored many times for extraction of copper and noble metals. In 1864-1917 mining operations were carried out in the field. During that period Siemens company of Germany produced copper ore in the field and extracted approximately 2 million tones of ore. Later, explorations were carried out in Gadabay field and around it by Dovletgeolkom.

Geological activities in Gadabay, Gosha and Ordubad contract fields began in accordance with the four-year Working Program confirmed by Azerbaijan and covering 2005-2009. In 2006-2007 Azerbaijan International Mining Operating Company dug 146 exploration wells (17700m deep) in the gold-copper field in Gadabay Contract Field and assessed the ore resources of the field. Maximum depth of the wells was 270m. About 50 subcontracting organizations were involved in the project. Over $60 million were spent on the exploration, construction, installation and equipment.

Early in 2007, the company presented the exploration document on Gadabay gold-copper deposit development project to Azerbaijani government.

The head of state was told that assessment of resources was carried out by SRK advisors in Denver independently. The analysis determined that there is 1.5 g/t gold, 12.2 g/t silver and 0.24% copper in 15.6 million tones of ore in Gadabay field. It means that there are 22 tones of gold, 192 tones of silver and 37,000 tones of copper in the field. There is on average 1.86 g/t gold, 15.9 g/t silver and 0.24% copper in 7.6 million tones of ore in the field. It makes up approximately 14 tones of gold, 123 tones of silver and 22,000 tones of copper. It will be possible to produce 70% - 9.8 tones of gold, 50% - 61.5 tones of silver and 35% - 7700 tones of copper from these resources. Annual average ore processing capacity of the plant is 1200 tones.

Gadabay field is located 1500 m above the sea around the mountain of Misdagh. There is a shallow valley there suitable for the pile corrosion field. The mine wastes will be thrown to the valleys around Misdagh. Small part of the rocks around is characterized as acid formers. Conceptual and completed project of the corrosion field was prepared by the Australiaâ€™s Perth-based Knight Piesold Consulting Engineers. The project allows the mine exploitation without explosives or with use of modern special explosives in certain time. 90 percent of gold production will be carried out with use of cyanides.

It considers using of tar-technology to drive gold out of the solutions. 300-400 employees will work in the mine. There are 250 workers now there.

Operational expenses will be 88.1 million USD and basic expenditures â€“ 33.8 million USD on Gadabay project. It means that prime cost of gold will be 283.14 USD per ounce and total income of the Gadabay project will be 229.1 million USD with 107.2 million USD profits.

The company will exploit six fields according to the agreement. Three of them are in Gadabay, Tovuz and Nakhchivan and three others are in the territories occupied by Armenia. Above-ground geological, geophysical and geochemical work has been done in Gadabay contract field.

The head of state looked at the territory and saw the samples of rocks. Then President Aliyev visited the refinery and put the plant into operation.

The President addressed the opening ceremony of copper-gold plant.

President of Azerbaijan International Mining Operation Company Reza Vaziri, head of Anglo-Asian Mining PLC John Sununu, Azerbaijan International Mining Operation Companyâ€™s chief engineer in Gadabay Shakir Gadimov also delivered speech in the ceremony.