The International Resource Journal: Central Asia Resources

Central Asia Resources
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admin on 26 July, 2010 04:00:00
 
Though the company is relatively new, Central Asia Resources operate in a mining
region with deposits that were discovered years ago. All prospects Central Asia
explores are in the Republic of Kazakhstan with the minority interests held by
Kazakhstani companies. These properties are host to near surface gold—and
were originally subject to exploration by Soviet workers from the 1960s to the
mid-1990s. Other drilling and exploration programs were conducted in the regions
prior to Central Asia Resources getting involved.
Since it listed on the ASX in 2007, the company has honed in on establishing
JORC compliant Resource statements for its prospects, and in March 2010,
achieved a total gold inventory of ~1.2Moz (with additional silver).
The Kazakhstan-based Central Asia Resources has an indirect interest in five
prospect areas in the Asian country, which is a relatively new jurisdiction.
Nevertheless, Central Asia Resources are fortunate to have adequate
infrastructure support—such as rail, road, and telecommunications close
by. Their projects are also close to Almaty which is the largest city in
Kazakhstan.
Central Asia Managing Director Jason Stirbinskis has played a critical role in
the development of the company. With his business and geology experience,
Stirbinskis helped lead the Central Asia team to get financing two years
ago—amidst the GFC.
Stirbinskis has worked in the resources and finance sectors for over 20 years.
Not to mention, he was appointed the Honorary Consul of the Republic of
Kazakhstan in Western Australia—an appointment that only strengthens the
company’s position in the country.
A clear strategy
For Central Asia Resources, the strategy is simple: Kazakhstan, and gold. Of the
company’s five projects, there are two that have the company preoccupied
for the near future.
The first important project is Dalabai. The project is a gold prospect 150km
north of Almaty, Kazakhstan. The 8km square area licence contains an area that
has been mined via several small open pits with heap leach processing on site.
According to the company, mineralisation occurs in secondary quartzites within
volcanic formations. In 2009, an intensive drilling campaign produced the
following maiden Resource using a 0.2g/t cut off.
Impressively, the prospect area remains highly prospective for additional gold
mineralisation. “The reason we’re so keen on Dalabai is quite
simple. It’s quite close to the surface, and it doesn’t get much
easier than this. Metallurgically speaking there’s nothing complex about
it, and infrastructure is good,” Stirbinskis explains. “Also,
we’re working in southern Kazakhstan, so the extremes of winter that
people experience don’t apply here—we can work 12 months of the
year.”
Full scale production is intended for 2011, and the company says it is right on
track.
The other project Central Asia wants to focus on is six times the size of
Dalabai: The Altyntas prospect. This project is hosted in a quartz stockwork
style mineralisation within dyke-form intrusive bodies of diorite-porphyrites.
The company says that “host sediments and dykes exhibit moderate to strong
chlorite and epidote alteration, [and] gold mineralisation is associated with
pyrite and arsenopyrite associated with quartz veining.”
The project has been delivering exceptional results and is the company’s
flagship prospect. In June of last year, a revised resource was announced,
illustrating the amount of high grade material present at depths amenable to
open pit mining. “For example, applying a 0.7g/t cut off to the June 2009
Resource statement produces over 500,000oz at 2.27g/t gold (see below)”
says the company.
Central Asia intends to focus substantial attention on the Altyntas prospect as
it is meant to be the second production site for the company. Altyntas will
follow Dalabai’s production, in 2012.
A friendly jurisdiction
The most interesting thing about Kazakhstan as a mining region is that its youth
as a country has served international investment well. “It has an
impressive narrative for such a young company,” Stirbinskis says.
“Mining policies are in place, and are still being refined. You expect
that when you come into a country like this. However, there has been 40 billion
in investment in the country—mostly oil and gas out of America. But this
is the only country in central Asia that has a triple B minus ranking [for
investment]. All the rest do not perform to investment grade,” he
continues.
Currently, Kazakhstan ranks in the top ten countries for gold, copper, lead,
uranium, chrome, etc. and Stirbinskis says that that is indeed the
company’s competitive edge. Although there are time challenges associated
with getting permits etc. (“Kazakhstan loves bureaucracy,” he
Stirbinskis says), companies who have help negotiating reporting requirements do
well. “It’s fair, but it’s thorough,” he adds.
“You really need to know someone there that knows how to negotiate their
way through all their reporting requirements and such—you’d be
naïve to think when you come to this country that how you do business in
Australia [for example] would be the same here. It’s all very logical, but
there’s a lot of it. You need significant support to get things up and
running.”
Kazakhstan, to the surprise of many because of its youth, is quite
environmentally aware, according to Stirbinskis. “They take their
responsibility very seriously. One of the responsibilities you have when you
successfully acquire some sort of a license is you have to commit to social
contribution as well. You have to explain in that license what you will do
socially. That could be anything from building schools in the region, replacing
fences or whatever it might be. You have to commit to the level of spending to
win the contract.”
Focus for the future
With their clear focus on healthy projects, Central Asia Resources is poised to
do very well this year and next. This year, the idea is to focus on Dalabai with
greater confidence, and continue to head down the path to production. The
company is also looking at the Bizhe prospect, which is 250km north of Almaty
(they plan to spend a few hundred thousand on the project). For Bizhe, the major
Almaty-Taldy-Kurgan highway is in close proximity, as is the company’s
Dalabai gold prospect 50km to the South.
Although the focus is mostly in Kazakhstan, there is the possibility of looking
outside central Asia,” Stirbinskis says. “I believe Indonesia is
quite an interesting place to look at. Mongolia is still exciting
too—maybe it’s had its rush already but I still think there’s
a huge potential.”
Though Russia and China may be viewed as future powerhouse economies, Stirbinski
advises investors to be on the lookout for Kazakhstan. “Here’s
Kazakhstan, bordering with those countries, and it has huge potential,” he
explains.
“Kazakhstan’s future is looking pretty good, and we’re happy
to be part of that future.”
centralasia.com.au