Nasedkino - construction start H2`16, production in `18?Maybe production in Q1 or Q2 of 2018
? We`ll have to wait and see how aggressive they approach the construction at Nasedkino.
From the last MD&A: ``
The feasibility report was submitted and accepted by GKZ. The Company considers the preparation of the report according to NI 43-101. In 2016 the Company plans actively develop Nasedkino for exploration and construction of the plant to start the production.`` Russia is a little bit different from North America, with regards to permits. In Russia, when the gov`t accepts your feasibility study, it is usually a strong step forward (though not the official mine permit, it is essentially the mine permit).
Per the MD&A, the Nasedkino feasibility study has finally been approved by the Russian gov`t.
It took several years to reach this point - and a number of attempts.
An intial resource/technical report (including the Russian version of a prefeasibility report) was prepared and issued in 2012 (filed on SEDAR on Nov. 26/12). The report was returned by GKZ (Russian gov`t) for further geological study.
Another technical report was prepared in late 2014, which included a Scoping Study / PEA. However, this report used JORC stardard (Australian standard), which is not compliant with 43-101 standards. The report was subsequently withdrawn.
Mangazeya made changes to the feasibility study in 2015 and was expecting gov`t approval in early 2016.
It looks like approval was granted, in the timeframe expected. Mangazeya is in the process of preparing the North American version of the 43-101 resource report. This will likely only include the initial resource. They still have to further drill the recently acquired licenses before including those new ounces.
The resource is expected to be substantially larger due to acquisition of the new licenses. As such, Mangazeya is looking to build a much larger operation. Perhaps pushing it from about 60,000 gold ounces per year of production to maybe close to 100,000. It`s not clear what type of construction delays this will have.
Initially, I was thinking end of 2017 for production start up at Nasedkino (then Q1 or Q2 for commercial production achievement). With a larger operation to build, I`m thinking production start up in Q1 or Q2 of 2018.
In terms of immediate next steps, it looks like detailed engineering designs will have to prepared and approved. I think the feasibility study approval was the key. I think they will approve the engineering designs if everything is consistent with the feasibility study.
It looks like some construction can begin prior to gaining final approval of the engineering plans. Also, the company can begin ordering equipment once it feels comfortable with design specifications.
From the 2012 Nasedkino technical report (posted on SEDAR on Nov. 26`12):
``Project Schedule``
``The next stage of obtaining approval to develop the project according to Russian law is to submitTEO Konditsii for review to approve the mine design and processing flowsheet. This is scheduled to be submitted in August, 2012 and approval is expected to be granted within 3 months assuming that the estimate is accepted. The Company will then prepare the Project Documentation where the detailed engineering designs will be prepared. This process will be started as soon as TEO Konditsii is submitted and is expected to take 8-12 months. This document will then be submitted for approval which is expected to take approximately 6 months and will then result in the awarding of the licences necessary to start construction. SRK notes that some construction can start prior to final approval being given and that the Company can order equipment when it feels confident in the design specifications. The Company estimates that construction will take ~12 months and plans to commission the mill by Q4 2014. SRK considers that this plan is aggressive but achievable if there are no delays in being granted approval, with the procurement of long lead items at the end of Q3 2012 and if equipment lead times are not extended. SRK notes that it is feasible to construct plants in winter.``
Financing:
With bigger (potentially 100,000 oz per year) mine now, and the gold sector soon to move into its next build market (after a 5 yr depression), I`m thinking Sergey will be successful in securing the financing to build Nasedkino.
The new debt of US$10 is secured by Savkino mine alone. Thus, Nasedkino is available to be pledged for project financing for mine construction.