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The head of the gold mining company Mangazeya Yanchukov: In 2018, we will double production
Topic Rating: +1 (1 votes) 
293 Posts
January 15, 2018 - 11:20 am

This is a google translate of the article so its a bit rough but this is the most information I have ever seen come out of Mangazeya and Sergey. Very interesting and very promising!


The head of the gold mining company Mangazeya Yanchukov: In 2018, we will double production

MOSCOW, Jan. 15 - PRIME, Sergey Padalko. The gold mining company Mangazeya, of the third ten Russian gold producers, intends to double its production in 2018, and in two or three years plans to double the reserves of this precious metal in its deposits in Transbaikalia. On whom it is necessary to be equal in this business, why the credit should be taken in gold, and not with money, as cooperation with Chinese partners develops, the owner of the Mangazeya Group, the general director of Mangazeya Zoloto Sergey Yanchukov told Prime agency.

- Sergey Valentinovich, have you summed up the results of the year already? In April, the chief engineer of the enterprise, Alexander Lukyanov, promised the Trans-Baikal government the extraction of 905 kg of gold in the Savkino field (11.5% more than in 2016), did it?

"The year was interesting for us, we did a good job. But despite this, plans for gold production in 2017 at the Savkino deposit have not been fulfilled. Due to a number of objective and subjective reasons, 770 kg were produced.

"What are the reasons?"

- A lot of them. These are weather conditions and geological features. In addition, there was a replacement of the operating team, this affected the management and affected the outcome.

- Can we expect that there will be less negative factors this year? What are your forecasts for 2018?

- We expect to produce slightly more than 800 kg of gold in Savkino. I think this is the level that for him will be constant in subsequent periods.

- While extraction is conducted only on Savkino? For what period do you expect to extend its development?

- Yes, at present there is only one working mine - Savkino. We continue to work with this asset, geological exploration is conducted on the Filevsky site, located in an accessible proximity to the operating Savkino mine. How long it will be possible to extend the development will depend on the results that we will receive in 2018.

But we can not say that we only rely on Savkino. "Mangazeya" will actively develop at the expense of other assets in the Trans-Baikal region, which are in our portfolio. In 2018, we plan to launch a new project - the Kochkovsky field. And in general, Kochkovskoye and Savkino can produce a little more than 1.5 tons in 2018.

- What is the expected cost (TCC) for the year 2017? Total cash costs (AISC)?

- The expected TSS in 2017 will be about 950 US dollars per ounce, AISC - about 1050 dollars.

- How big is the debt load at the end of 2017? Is it sufficient to generate cash flow to service debt?

- The debt load at the end of 2017 consists of a loan in gold equivalent to $ 30 million. The loan agreement provides for the cancellation of about a third of the loan amount in 2018. The generated cash flow allows providing timely extinguishment and debt servicing.

- Yes, most recently you have issued a three-year loan agreement with VTB in gold bars (800 kg). Why not immediately money?

"This is our only loan." And this is a typical loan product. Just a little less common than conventional lending. In fact, this is a combination of credit and the sale of gold under one contract. Such a mechanism for a gold miner smooths the risk of a negative fluctuation in the price of gold. We will have to return the bank exactly the volume of metal that was taken, regardless of whether it costs $ 1,300 per ounce or $ 1,000. Thus, we can focus on production and work precisely with what we have competence, experience, human resources. Not being distracted by external market factors.

- Shares of Mangazeya Mining are traded in Toronto, are there any plans to leave, and bargain, for example, in Moscow? Or in addition to stay in Moscow?

- We are implementing a large-scale investment development program. And all the company's resources are directed at it. Therefore, we do not have any serious plans for equity, for leaving the exchange or for entering new sites.

We do not plan to attract additional funds from the market, we use our own funds and borrowed funds for the investment program.

- What amount of capital expenditures was provided for the last year, how much and for what were the funds directed?

- Taking into account the fact that the production and social infrastructure is fully formed in the Savkino deposit, and the necessary machinery is present, substantial capital investments are only needed to involve new gold mining assets in the development. First of all, the deposits of Kochkovsky and Nasedkin. The total amount of investments for them for the year amounted to about 1.7 billion rubles. Of these, 1.5 billion rubles - on Nasedkino.

At the beginning of the year, after receiving the positive conclusion of Glavgosexpertiza and permission to build the factory, we plan to move to the Nasedkin deposit to the active stage of construction. Prior to that, preparatory and design and survey work was carried out, prepayment of supply of technological equipment, work on the formation of infrastructure for future construction and production, including road and social.

Investments in the Kochkovski project went mainly to the financing of geological exploration.

- Yes, you already said that this year you are launching the Kochkovsky site.

- At Kochkovo we completed the evaluation work. According to the results of geological exploration, we see that some of the reserves are in light-enriching ores where heap leaching is possible, the other part is primary ore, which will need to be processed at the plant. It is on ores suitable for heap leaching that we plan to launch this project in 2018.

- And in what condition is Nasedkin now, how ready is it for development?

- The deposit Nasedkino is at the final stage of design. We plan to build the mining complex in March 2018. Its operating reserves including flanks are 21.2 tons of gold.

- What technology will you use to extract gold?

- At Nasedkino, we will use the gravity-cyanide gold extraction scheme, we plan to receive the first finished products in June 2019, after the plant was launched.

- Two years ago you said that by 2017, as a result of geological exploration, balance reserves of gold in your deposits in Transbaikalia will grow 2 times (up to 55 tons). How much did you send for exploration in 2017, how many plan in 2018? What are the expected results?

"We are pleased with the results of the geological exploration campaign, which was conducted during the last years. Our forecasts and expectations were justified, and we continue to invest actively in geological exploration. If in 2017 our costs in this direction amounted to about 130 million rubles, then in 2018 we plan about 350 million rubles. And in the next two or three years the reserves of our deposits in Transbaikalia will exceed 100 tons.

- In what relations is Mangazeya with the enterprise of PJSC "Ksenievsky Prisk"?

- We are in partnership with the Ksenievsky gold mine and its owners since 2014. During this time, we worked together and worked closely, including at the level of the boards of directors and discussed and solved various complex tasks.

- In February 2015, you signed a protocol of intent with the Chinese "Petro-Hehua" (Haihua). How much progress has been made in the framework of this agreement?

- In general, we successfully cooperated for two years. Purchased, received from them spare parts and components for the Chinese equipment in operation in Savkino. There have been several trips organized by the Chinese side to their reprocessing industry. Simultaneously, on the basis of the relevant bilateral documents, we studied the possibilities of organizing joint research in the field of creating a new production cluster for gold mining and processing in the Trans-Baikal Territory based on our deposits.

But when we contracted equipment for Nasedkin, we decided to sign a contract with the equipment manufacturer - CITIC. It is the Chinese and world leader in the production of a wide range of mining equipment. Among our suppliers there are also Sepro Mineral Systems and FLSmidth, that is companies from Australia and Canada.

- You planned to export concentrate of refractory ores to China for processing. Will it now be realized?

- The development of the Nasedkin deposit and the first stage of Kochkovski's development allow us to get gold on our own on relatively simple technologies at our site, so the issue of processing concentrate at the moment is not worth it. At the same time, we understand that sooner or later we will approach the need to process refractory ore and we will face the question of choosing the optimal scheme: on-site processing or export of concentrate. And here the solution will be dictated by the overall economic effectiveness of each option.

- Do you plan to purchase new acquisitions, participate in auctions, takeovers of enterprises in Transbaikalia?

- New acquisitions are not planned yet, we will concentrate on the current projects in our portfolio.

- What important events do you expect in the industry in 2018?

- In the past year, Norilsk Nickel launched a large facility in Transbaikalia - Bystrinsky GOK, 30 km from our Kochkovskoye field. And, apparently, will continue to develop it ...

- Are there any companies in the industry that you can call specific samples, or guidelines for development?

- Polymetal. At the invitation of Vitaly Natanovich Nesis I visited them at the factory. And I think that this is the most advanced company in terms of technologies, and in terms of management, and in building up internal processes, and in personnel policy.

- Are you satisfied with the state regulation of the industry, maybe you would like to change something?

- Do not change anything, let everything remain as it is. In Russia, one of the most comfortable conditions for working in gold mining has been created, and most importantly, these conditions have not changed for many years, which enables companies to plan their activities for many years to come. The industry, as you understand, requires high capital expenditures for geological exploration, for the launch of new deposits, and a stable regulatory environment that is not subject to sudden changes is extremely important when making and implementing such long-term investment decisions.

- OK, and finally, - what is your attitude to bitcoin? Some experts believe that he will soon be able to take away the quality of a safe asset from gold, and in general he (or some other crypto currency) will replace gold?

- Strongly disagree. Bitcoin is an "air" asset and in relation to it there is clearly an unhealthy excitement. I think that the technology of blocking is very promising, in the future it will develop and find application in various fields of activity. But gold in terms of a reliable asset does not lose ground. The central banks of the world's largest economies continue to acquire and use it as a reserve asset. In my opinion, now the price of gold is close to fair.

Mangazeya Mining Ltd is a gold mining company operating in the Russian Federation. The company's shares are traded on the NEX Board (of TSX Venture Exchange, Toronto). The company's deposits are located in the Trans-Baikal Territory: Savkinsky (Nerchinsk-Zavodsky District), Nasedkin (Mogochinsky District), Zolin-Arkinsky Square (Gazimur-Zavodsky and Aleksandrovo-Zavodsky Districts). By results of 2016 the company produced 27.4 thousand ounces (852.2 kg).

419 Posts
January 18, 2018 - 11:15 pm

Finally starting to see some really positive developments.  With Nasedkino coming on stream in June next year, production could double again in 2019 to about 100,000 ounces.  Nasedkino is forecast to produce about 48,000 oz in its first (half) year and 142,000 oz in the next year (2020) so production should double again to about 200,000 oz.

 Note also this quote from Sergey: "And in the next two or three years the reserves of our deposits in Transbaikalia will exceed 100 tons."  100 tons is 3.2 million ounces.

Too bad there is zero promotion with this company!

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