Kvemo Bolnisi is an advanced copper-gold exploration project with the potential to host several significant deposits, materially advancing the potential scale of a mining operation. With access to our local partner’s processing facilities and infrastructure, both capital requirements and the timeframe to production are significantly reduced.
The Kvemo Bolnisi Copper Gold Project (‘KB’) sits less than 7km to the north-east of the producing Madneuli mine and processing plant operated by RMG, the production company operated by Georgian Mining Corporation’s local partner. This mine has produced approximately 85mt of copper and gold bearing ores, at a reported grade of approximately 1.0g/t Au and 1.0% Cu. Madneuli’s current mine life is estimated at 15 years.
Georgian Mining Corporation’s drill programmes have expanded the scale of both the gold and copper mineralisation at KB by discovering copper in areas where it was previously unknown and extending gold mineralisation into breccia bodies that currently remain open at depth.
The copper – gold mineralisation is hosted in a package of acid volcanics and volcaniclastic units with porphyritic intrusions. The current footprint is 2.5km by 1.5km and mineralisation has been intersected in drilling from surface to depths exceeding 300m.
KB is located close to the operating Madneuli mine and it is clear that many of the geological features that define Madneuli are also evident at KB. This indicates that an objective for KB should be the delineation of a deposit of a similar size and grade (50 – 70 million tonnes at average grades of 1% Cu and 1g/t Au) based on further exploration and once the geology of the deposit is better understood.
In the short-term, the Company’s objective is to capitalise on the competitive advantage afforded to it by having access to a fully operational processing plant located 5km from the project site owned and operated by our local partner. This will create enormous benefit from the savings on capital expenditure, much shorter lead times to production and access to a well-developed local contract mining and haulage infrastructure, all of which offer scope for significantly improved operating margins. The Company is currently undertaking a 10,000m drill programme targeting an initial resource of 3-5 Mt copper/gold. This target has been set in consideration of the processing capacity available at neighbouring mines, owned by Georgian Mining Corporation’s joint venture partner. By following this strategy, the Company hopes to position itself to generate positive and sustainable cash flow from late 2017.
Georgian Mining Corporation has signed a Memorandum of Understanding with its JV partner’s production company (RMG) to enable the Company to speed up the timeline to production. The MoU outlines mining and processing arrangements for the future production of precious and base metal ores mined from Georgian Mining Corporation’s licence area. The Company anticipates future contract mining and processing costs of around US$600 oz Au assuming an average grade of 1 g/t Au. Access to RMG’s processing facilities will significantly reduce both capital expenditure and the timeframe to production.