The Company continued the implementation of the development strategy approved by the Board of Directors of OJSC Polyus Gold immediately after the Company’s incorporation in 2006. The strategy has been developed for the period to 2015 and is aimed at significantly increasing the Company’s production capacities and its mineral and raw material base. The construction of a number of new mining facilities, as well as the modernization and expansion of existing operations, was continued in 2009 as part of the strategy implementation. The implementation of the program provided the Group’s first increase in total production volumes in 2009. In 2010, following the start-up of the Blagodatnoye Mine, the Company will enter an active growth stage.
Krasnoyarsk business unit
Blagodatnoye Mine construction
The Blagodatnoye Mine is expected to start up in the second half of 2010 and to achieve its full capacity of 6 million tonnes of ore per year in 2011. The expected average gold production is 12.8 tonnes per year (412 thousand ounces).
POWER PLANT CONSTRUCTION AT BLAGODATNOYE
In 2009, construction works were underway at all project facilities. A positive expert opinion from GlavGosExpertiza and a construction permit from Rostekhnadzor were received in the year. Mining development, construction work
at intra-site power networks of 6 kV, 0.4 kV, water intake structures, and an off-take with bridge crossings were completed. The design and budget documentation at the end of the year was about 98% complete. The total volume of investments in the project at the end of 2009 was about 59% of the total project budget. At the same time, with regard to the crushing complex, main building, and the Hydrometallurgical Department (GMO) building, the level
of capital investments in construction and assembly work as at 31 December 2009 exceeded 65% of the planned expenditures. In 2009, investments in the Blagodatnoye project amounted to USD 152 million.
At the end of 2009, the installation of the principal technological equipment (Mills Nos. 1 and 2 for the milling stage, flotation machines for sorption and processing tanks) was complete in the main building and the GMO building
at the Blagodatnoye Mill. The installation of hardware and external structures of built-in premises is in progress.
In November, commissioning and testing works were performed of the 1st technological line of the Blagodatnoye Mill in the crusher house.
Two turbines were installed in the boiler house with a production capacity of 24 mW. Installation of the third turbine was completed in the first quarter of 2010. The boiler house was launched in March 2010.
As at the end of 2009, 70% of area planning and preparation work with regard to the tailing facilities were complete. This work included the development of water intake structures, levees, filtering dams and landfills for sorption tails, and pulp lines.
The delivery of mining transportation equipment continued in 2009. Two РС-3000 excavators (15 cubic meters)
and 9 CAT 785 C mining trucks were delivered, which enabled a 200% increase in productivity. A total of 7.7 million cubic meters of rock was moved at the Blagodatnoye deposit in 2009.
Первые тонны дробленной руды месторождения Благодатное
Blagodatnoye deposit
The Blagodatnoye ore deposit is located in the North- Yenisei District of the Krasnoyarsk Region, 25 km from the Olimpiada Mine.
Ores in the deposit are represented by silicified, chloritic and sericitized quartz-micaceous schists with impregnated and vein impregnated sulphide mineralization. Ore minerals, the share in ores of which is 2-5%, are represented by pyrrhotine (1-3%), arsenopyrite (1-3%), pyrite and marcasite (0.5-5%), lollingite (0.3%), and include a negligible admixture of chalcopyrite, galenite and sphalerite.
The main forms of gold in ores are: free (70-80%), related to barren minerals (25-30%) and aggregates (5-10%). Fine gold primarily consists of granules of 70-750 ?m (about 55%) and 10-70 ?m (about 45%). The gold content of ore bodies is quite evenly distributed. The average grade of gold in ores of the deposit is 2.4 g/t.
Titimukhta deposit development
The re-equipping and modernizaton of gold extraction plant No. 1 of the Olimpiada Mine (Mill No. 1) for processing ores of the Titimukhta deposit were completed in early 2009. The plant has been engaged in processing Titimukhta deposit ores since April 2009. The Mill was also engaged in processing ores from the blending stockpile of the Olimpiada Mine (mixed type ore and Olenye deposit ores). Total ore processed at Mill No. 1 for the year was 2.1 million tonnes, including 600 thousand tonnes from the Titimukhta deposit.
Work with regard to the crushing complex, thickener and pulp pumping station were completed and vehicles were purchased in 2009. Work to create an automated system for the mining and transportation complex management (ASU GTK), based on the equipment and system of Wenco Systems, was completed in April 2009.
It is planned to complete the installation of the water removal system and deliver the remaining mining equipment (EKG-10) and other vehicles in 2010.
In 2009, the total costs under the Titimukhta project were USD 15 million.
Titimukhta deposit
The Titimukhta gold mining deposit is located in the North-Yenisei District of the Krasnoyarsk Region, 9 km north-west of the Olimpiada deposit.
The deposit is represented by quartz vein stockwork.
Ores are related to one technological type, free-milling ore, and are represented by two natural varieties, oxidized and sulphide (original), with different mechanical and physical properties. The volumetric weight of the dry oxide ore was accepted to be 2.25 t/m3 and 2.75 t/m3 for sulphide ore. Sulphide mineralization amounts to 2-3% and is represented by bismuth minerals, pyrites, pyrrhotine. Gold in ores is mainly found in its natural form (36%) and fused with bismuth minerals (48%). Ore includes bismuth and silver, although they do not form a concentration of commercial interest. The average grade of gold in the deposit’s ore is 3.3 g/t.
Titimukhta deposit ore processing
After initial crushing, base ore is transported by truck to the ore plant for further two-stage crushing on two trains.
The first-stage semiautogenous grinding mills operate in an open cycle, while the second-stage ball mills utilize a closed-loop cycle along with hydraulic cyclones. The effluent coming from the hydraulic cyclones is thickened in the circular thickeners, after which the pulp is forwarded to the cyanidation columns in order to dilute the gold with a sodium cyanide solution.
After that, the pulp goes through the slurry divider and enters the desalination columns, where the pulp and sorbent agent flow countercurrently. As the result, ion-exchange resin sorbs ions of gold.
Fresh ionic-form resin is forwarded to the last columns and, as it gets saturated with gold, it is moved by airlifts to the head of the process. Afterwards, the saturated sorbent is further separated from the pulp and sands on unbalancedthrow screens and concentration tables.
The resin washed from the pulp and sands is sent to the regeneration cycle, and the pulp and sands from the unbalanced-throw screens and concentration tables are forwarded to the cyanidation column.
Sorption tails are removed from the last sorption columns and, after screening, they are sent to be decontaminated by calcium hypochlorite.
The saturated resin goes from the concentration tables to the buffer chambers and, after a sufficient amount has accumulated, it is forwarded in portions to be separated from the slurry with recycled water. The discharge from the columns returns to the sorption process.
The resin washed from the slurry is pumped to the acidizing recovery columns and then goes to the sulphourea sorption column for regeneration. The resin is then sent in portions to gold desorption columns, then to the acidizing column, where sulphourea is removed using sulphuric acid solutions. After that, the resin is rinsed with potable water to get rid of the acid and undergoes the necessary alkaline treatment. The ionic-form resin is then sent to the sorption process.
Gold-bearing solutions from the industrial reclaim tank go to press filters, after that the industrial reclaim is discharge by gravity through the supply tanks to the electrolytic tanks. Metals deposit on the cathodes as powder and drop off to the bottom of the cathode chambers. De-golded master batch goes through the gathering tanks to sulphurous solutions of sulphourea.
When it has accumulated, the metal is taken out of the electrolytic tanks. The cathode slurry is filtered through the nutsch filter, and then the dried sediment is weighed and undergoes kiln roasting and induction melting. The finished product in the form of ingots is delivered to the Central Gold Receiving Office.
Olimpiada Mine expansion
The Olimpiada Mine expansion project is intended to expand the mine’s sulphide ore processing facilities. Mill No. 3 was launched in 2007 as part of the project. Moreover, work to expand the Vostochny open pit has been performed in recent years.
In 2009, the construction of a nitrogen station was completed, a Knelson concentrator was installed and a desorption unit was put into operation. The construction and assembly of fuel and lubricant storage areas and the automation of technological processes at Mill No. 3 are expected to be completed in 2010.
Total investments in the Olimpiada Mine expansion project in 2009 amounted to USD 37million.
Irkutsk business unit
Verninskoye Mine construction
The Verninskoye Mine project provides for the start-up of a mill in the second half of 2011 with a production capacity of 2.2 million tonnes per year and an average gold output of 183 thousand ounces per year.
In the second quarter of 2009, positive expert opinions were received from GlavGosExpertiza, as well as permission to construct the Verninskoye Mine’s main facilities. Construction that had been suspended in 2008 was continued.
Installation of the framework, external structure of the main building, and 50 ton bridge cranes continued in September 2009. Approximately 95% of the metal elements of the hydro metallurgy building’s structure and 40% of the walls and windows were installed by the end of 2009. A 50 ton crane was prepared for its final installation.
Camps for the teams (who work in shifts) currently include a canteen, 2 dormitories and a laundromat. Dormitory No. 3 is expected to be finished in summer 2010; all other work has been completed.
As construction of the Blagodatnoye Mine in the Krasnoyarsk Region winds up, the personnel engaged in that project will be transferred to the construction site of the Verninskoye Mine.
At the same time, it is planned that high quality work related to installing key technological equipment, metal structures, in-situ reinforced concrete constructions, electrical installation/plumbing and sanitary engineering will be performed by the Company’s specialists, and all specialized types of work (power transmission lines – 110 kV, P/S 110/6 kV, fire alarm systems, etc.) will be performed by subcontractors.
MAIN BUILDING CONSTRUCTION AT VERNINSKOYE
Investment in the construction of the Verninskoye mine in 2009 was USD 17 million.
Verninskoye deposit
The Verninskoye deposit consists of several ore zones, the largest of which is ore zone No.1. The zone dips at 25-35° and has a combined length stretch of 1000 m, 400-900 m with the decline, and a thickness ranging from 50-70 m to 100-110 m. The front bottom part of the ore zone has the main ore body with a thickness of 30-70 m covering almost the whole zone. Ore concentrations confined to the zones of quartz-sulphide vein-impregnated mineralization, quartz-veined formations are quite rare.
Verninskoye deposit ores are represented by sericitecarbonate- quartz schists and sandstones including gold-bearing quartz-sulphide mineralization in the form of pockets, disseminated deposits and quartz-pyrites-arsenopyrite veins.
The main features of the ores are: continuity of composition, concentration of the ground mass of native gold in the form of disseminated deposits in quartzpyrites- arsenopyrite formations, insignificant supergene ore modifications. As for mineral composition, feldspars, quartz and micaceous minerals prevail. The total content of sulphides is the first per cent. Gold is in an unbound state and is paragenetically related to pyrite and arsenopyrite.
Magadan business unit
Natalka project
In 2009, work on organizing Natalka deposit production included preparation of project documentation, pilot plant technology improvement, further exploration work, and other prepatory works.
Preparation of project documentation
In March 2009, the Board of Directors of OJSC Polyus Gold approved a new project for the Natalka development with 3 stages of implementation. In April, a consortium of designers led by PiterGORproject started preparing the project documentation.
During the year, laboratory, semi-industrial and industrial research works and a comprehensive engineering survey were performed as part of the project’s implementation.
Preparation of the project documentation was completed in November 2009. Certain opinions and approvals with regard to the project documentation were received from the Magadan Region state authorities.
In December, the project documentation was submitted to the Federal Agency for Subsoil Use of the RF Ministry of Ecology and Natural Resources.
Also in December, the project documentation and the results of the engineering survey were submitted to GlavGosExpertiza (The Federal State Enterprise Senior Department of State Expertise).
The results of the expertise on industrial safety conducted by CJSC GeoExpert were approved by the Federal Service for Environmental, Technological and Nuclear Control of the Ministry of Natural Resources of the Russian Federation.
In December 2009, an expert opinion on the results of the expertise on the sanitary and epidemiological issues of the project, conducted by the Magadan Region Federal State Enterprise Center of hygiene and epidemiology, was submitted to the Federal Service for the Protection of Consumers' Rights (Rospotrebnadzor).
Technology development at the pilot plant
In 2008, a pilot plant was launched at the Natalka deposit with the aim of analysing the technology of the future Natalka Mine. On 7 May 2009, the first gold bullion was smelted at the pilot plant. In the first two quarters of 2009, work was carried out at the plant to improve the parameters of ore grinding, testing was done at the filtration and thickening stages, and in-process testing of the intensive cyaniding process was underway. In the third quarter, testing was done to identify the relationship between recovery and the grade in the primary ore, and in the fourth quarter, testing of high-speed flotation and other work was carried out.
Investment in the project for the Natalka deposit development in 2009 amounted to USD 24 million.
Natalka deposit
Natalka gold deposit is located in the Western side of Nalalkinskaya syncline, which is a brachiform fold of a relatively simple composition with axes orientation on azimuth of 310-320°. The length of the syncline is approximately 5 km, the width – 2.5 km. The wings of the fold form angles of 30-50°.
Mineralized areas of the deposit has a spread of about 4.5-5 km. Its width reaches 1 km, commercial mineralization is concentrated, as a rule, in narrow ore legs with a width of above 100 meters. Identified vertical spread of the mineralization is 900-1,000 meters.
The deposits belongs to quartz low-sulfidation formation, and to arsenic pyrite type of such kind of formations.
The ore is presented with carbonaceous and quartz shale with quartz veins. Ore minerals are presented with arseno-pyrite, pyrite, magnetite, ilmenite, gold and other. Gold bearing minerals are, mainly, quartz and arsenopyrite.
Gold is present primarily in a free form, as attachments and inclusions in arseno-pyrite and pyrite. Gold grades in pyrite and arseno-pyrite reach 70%. That is why when gravitation applied high gold recovery is possible into the sulfide gravitation gold bearing concentrate.
The ores have the following technological characteristics:
- Only gold exists in commercial quantities, silver amounting only to one fourth of the gold total content;
- The ores have homogeneous composition and equal distribution of grades;
- The Protodyakonov’s solidity coefficient is equal to 8-10;
- плотность The ore has a density of 2.6-2.7 t/m3, apparent density is 1.6-1.7 t/m3, humidity is equal to 0.6%. lode rock and dead rock have equal density, that is why it is practically impossible to separate dead rock basing on the specific weight.
Kazakhstan business unit
AKSU MINE, OPEN PIT MINING
KazakhGold Group deposits
In the third quarter of 2009, modernization began at the production units of KazakhGold Group, located in the Stepnogosk District of the Akmola Region of Kazakhstan: Aksu, Bestobe and Zholymbet. In the final 5 months of the year, investments into these assets, including investments in exploration work, amounted to USD 6.6 million.
During this period, an upgrade of underground mine equipment was underway at all mines, and repair work was in progress at the mills.
At Zholymbet, the construction of hypochlorite preparation and tailings neutralization workshops, as well as the plant’s oxygen station, was completed. In addition, capital and maintenance repair work was carried out at the production workshops, administration buildings, and the industrial area of the mine.
Production at the heap leaching complexes at Aksu and Bestobe resumed.
Capital repair of the Ventilyatsionnaya shaft at Bestobe was done, and the sludge line was reconstructed. A water filtration system was installed to ensure a stable supply of drinking water. Capital repair of the administration complex was also completed.
At Aksu, shafts No. 39-41 were modernized and operations resumed. Capital repair of the administration complex at shaft No. 40 was done. In addition, capital and maintenance repair work was carried out at a number of production and administration facilities.