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Andash

Andash Gold-Copper Project (Kentor Gold 80% increasing to 90%)
Towards its goal of becoming a mid-tier gold producer, Kentor plans to develop a substantial gold and copper mine at Andash in the Kyrgyz Republic.

In 2009, Kentor acquired the majority interest in the Andash project which became available when the owner, Aurum Mining plc, decided not to proceed due to financial constraints.

Andash is an advanced high grade, low cost gold mining project. Kentor took advantage of its long established position in the Kyrgyz Republic and its technical and management expertise to grasp this rare opportunity to acquire a project that was almost development-ready Government permits had been obtained and the project was acquired with an already assembled near-new fleet of mobile construction and mining equipment.

The project has an estimated JORC Mining Reserve of 540,000 oz gold and 63,000 tonnes copper.

Kentor Gold is now proceeding with initial project development with a view to first production late in 2011.

A Definitive Feasibility Study completed in early 2010 confirmed Andash as a technically and economically robust project.

Production is planned at an annual rate of 60,000 oz gold and 6,800 tonnes copper in concentrate for an initial six and a half year mine life.

The total operating cash cost for gold production is estimated to average US$38/oz including royalty payments and after copper credits.

Capital cost of the project is US$102M for Phase 1, followed by US$28M to double plant throughput to 3Mtpa from year 3.

The current estimated Resource is 19.2 million tonnes @ 1.1 g/t gold and 0.4% copper for 680,000 oz gold and 77,000 tonnes copper, the grades of which rank favourably with comparable gold-copper projects. Encouraging results from initial exploration near the current Resource indicate the potential for considerable expansion and mine life extension.

Andash is located in the Talas Valley in the north-east of the Kyrgyz Republic. Well situated topographically for mining and well served by infrastructure, it is 280 km by sealed road from the capital, Bishkek, and 45 km from the regional centre, Talas. The town of Kupre-Bazar is 2.5 km away. Water is available on site and a major power line passes within 15 km. A rail line is 170 km from Andash by road with connections to Kazakhstan, China and Europe.

While gold is mined at several places within the Kyrgyz Republic, Kentor Gold will have a significant “first mover” advantage as the first miner in the Talas Valley which hosts a belt of porphyry copper-gold deposits, many within trucking distance of Andash.

The mining and processing methods planned for Andash are well proven and comfortably within industry standards.

The low cost open pit mining operation will have a very low average waste to ore ratio of 0.72 : 1.

The ore is metallurgically easy to process by simple crushing, grinding and flotation, and a high quality concentrate containing both gold and copper can be produced. The concentrate is already being keenly sought and can be readily sold on competitive terms to smelters and trading houses.

Andash Gold Copper Project