Malomir - Exploration and Production
Exploration (to Categories C1 and C2) has been completed on the central part of the deposit (1.7km). All historic resource and reserve data for the main Malomir deposit has been reassessed by the Company's geologists, and the reserves and resources re-estimated.
Approximately 1km of the strike length is now evaluated to Category C1, with a further 1km to Category C2 (as far as the river Malomir and the boundary with the Ozhidaemoye deposit).
Three ore zones have been identified within the Quartzitovoye deposit. The east-west ore zones (with 1.0 to 2.8 g/t grades) of the Quartzitovoye deposit have been explored on a 80-40 metre x 60-40 metre grid for a length of 1.2 km. It would appear to be continuous with the mineralisation of the Ozhidzemoye deposit, with the same geological and mineralised characteristics. A new type of gold mineralisation, not previously identified at this deposit, has been established at north-south ore-bearing cross-courses. The length of these cross-courses at surface level is 440 metres, with a thickness of 2.3 metres to 34.8 metres. Mineralisation has been explored on a 60-40 metre x 60-40 metre grid and by two pre-strip pits. Gold grades are generally high with separate samples reaching 100-500g/t on 1 metre intervals. The mineralisation remains unbound in all directions. Within the zone there is a collection of veinlets at grades of more than 50g/t, with individual veinlets generally around 1cm thick and containing visible gold. The ore contains free gold and is easily processed by cyanidation. This ore zone is continuous in depths of 300 to 350 metres and has sub-parallel branches.
Apart from this initial cross-course found on the Quartzite block, another three are expected by the Company's geologists; they are 180 metres to 200 metres apart. Exploration here has recently commenced. The Company's geologists expect controlling structures not only on the Quartzite block but also further to the north-eastern part of the deposit which could significantly change the prospects for the whole deposit.
Hydrogeological and engineering geological studies on the deposit have been completed. Together with geological data they have been taken as the basis for preparation of a prefeasibility study which is expected to be submitted to GKZ (the Russian State Commission for Reserves and Resources) in the second half of 2009. In preparation for mill construction, a deposit of building stone has been located and evaluated, as has a deposit of carbonate rock for autoclave leaching. Exploration for sources of clay and sand is continuing.
