Continued weakness in gold prices has forced Indochina Goldfields (ING-T) to cancel development plans for its Bakyrchik gold project in Kazakstan.
The company will nonetheless proceed with operating plans for a US$5.5-million Drinkard pilot plant commissioned at Bakyrchik last month.
The plant is designed to test hydro-metallurgical processes aimed at boosting recoveries from the deposit’s refractory ore and replacing one stage of a planned 2-stage roaster in the oxidation circuit.
Also, IG has asked Kazakstani officials to revamp the payment schedule for the remaining US$30 million owed to the government for its share in the Bakyrchik mine.
IG, which holds an 86% interest in the Bakyrchik joint venture, has already paid US$35 million to the government and provided an additional US$50 million for working capital and infrastructure.
The company has proposed that future installment payments be linked to the arrangement of project financing and a sustained recovery in the gold market.
The fall in gold prices has not, however, been entirely unkind to IG. The company (which bought hedge put-contracts on 1 million oz. for US$14.7 million in July 1997) reports that when gold dropped below US$278 per oz., it closed out put-contracts on 500,000 oz. for a net gain of US$6.9 million.
The company now has cash and liquid assets totalling about US$75 million.
In other news, IG’s 50%-owned Monywa copper venture in Myanmar began drawing down on a US$90-million line of credit provided by a Japanese consortium led by Marubeni of Tokyo.
Construction of the project is about 35% complete, and production of copper cathode is slated to begin in the late second quarter at an initial rate of 25,000 tonnes per year. Solvent extraction-electrowinning will be used.
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