LONDON (Alliance News) - Tengri Resources PLC Wednesday said it has decided against progressing with the Bashkol project farm-in so it can focus its strategy on developing its existing Taldybulak project in the Kyrgyz Republic.
In September 2013, Tengri earned the right to earn a 51% interest in CJSC Kentor, which owns 80% of the Bashkol project, by spending AUD2 million by the end of 2017. Tengri also had the option to acquire a further 19% stake by spending an additional AUD5 million before September 2021.
"Following the review of the 2014 Bashkol drill programme and taking into consideration the increased focus on development work at Taldybulak, management has decided against continuing with the Bashkol farm-in, as it is considered non core in the current business plan," said Tengri.
The company said it would be focusing on Taldybulak because of the positive drilling results achieved in 2014, and it is now pursuing a feasibility study for the project in 2015.
"Our decision to prioritise the development of Taldybulak is an important one. We believe that the focus of the company should be on developing the extensive resources already identified at our advanced projects, Taldybulak and Andash, in a cash conservative manner," said Director John Levings.
Tengri will develop the Taldybulak project in two phases. The first phase will target a higher-grade, near-surface, gold-sheeted vein system which has, on average, 3.8 times higher grades than the average of Taldybulak's current defined global resource of 6.7 million ounces, it said.
The presence of coarse gold within the area is likely to also enable Tengri to produce gold doré at more modest capital and operating costs, as well as a gold-copper concentrate.
The second phase will target the larger resource at the project and bring in the Andash project nearby, which will function as a satellite mine feeding Taldybulak's central plant, it said.
"The company believes that Andash is well situated to function cost-effectively as a satellite mine to Taldybulak. This development method can also provide the option of reducing the project footprint at the Andash site," said Tengri.
Tengri shares were up 5.3% to 2.50 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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