Member Info for bald_eagle

"The significant expenditure relates to the planned Teren-Sai processing plant which will be a conventional carbon-in-leach (“CIL”) gold recovery plant, similar to the existing one at the neighbouring Sekisovskoye Mine."
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DofM, so there is a significant expenditure planned for a new Teren-sai processing plant but NOT a significant expenditure associated with the 2nd plant at Sekisovkoye....how are they going to fund the 2nd 1Mtpa plant that you believe they are going to build at Sekisovkoye?

I have done my research. I cannot find any reference to a 3rd 1Mtpa plant or a plan to produce at 3Mtpa. It might be a possibility in the future but it certainly isn't planned for (as far as I can see).

DofM, I'm not blaming you for getting things slightly wrong. The problem is Altyn's unclear use of language.

I believe that you might have become confused by Altyn's confusing language.

I know they plan to increase production to 2Mtpa. This will be achieved by the upgrade of the current 'Seki' plant to 1Mtpa and the construction of one brand new plant. I have NOT heard that they plan to build 2 new additional plants.

The brand new plant seems to be earmarked for Teren-Sai. This sort of makes sense. 'Seki' will have a 1Mtpa plant and Teren-Sai will have another 1Mtpa plant. The combined processing capability of AltynGold would then be 2Mtpa.

Do you have a nice house?!

"they are suggesting annual output of 65,000 oz"
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Surely that would suggest at least a 1Mtpa processing plant at Teren-sai....unless grade is significantly higher than 2.5g/t

"I am prepared to put my house on it, but the wife is included."
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So the third processing plant at Teren-sai will take total processing capability to 3Mtpa?

" they have already told us they are mining ore zones 3-8 (2.29 g/t), ore zone 10 (2 g/t) and ore zone 11 (2.29-2.33 g/t) which corresponds with the recovery currently being achieved."
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DofM, where did you get this information from please?
The grades associated with the ore zones seem very low. The lowest grade I could find - albeit on a per level basis - was 2.69g/t at 250-300 masl.

From the latest report: "There was a substantial development of tunneling amounting to 5,657 linear metres, including 353 metres on transport decline No 2 allowing access to 640,000 tons of reserves at levels +161, +164 and +178; and 352 metres on transport decline No 1 allowing access to 110,000 tons at levels +150 and +163."

That allows access to 750,000 tonnes at a head grade of circa 3.36g/t

If they can process that ore in the coming year - or incorporate a large % - then this should substantially increase the grade of the ore being processed.

"There are two more plants planned, a further one at Seki and one at Teren"
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DofM, I don't believe you are correct. There is only one further processing plant planned. The current plant will be upgraded from 850ktpa to 1Mtpa.
An additional 1Mtpa plant will be built in the future - possibly at Teren-sai - to take processing capability to 2Mtpa...as part of the 6 year plan.
So that is one plant upgraded and one new to be built.

"Initial funding of c $50m is to achieve 1 mtpa at Seki. They have raised c $30m of that. A further $15.7m of capex is earmarked for the next 2 years . Further funding will be required to get to 2 mtpa by building a second 1 mtpa at Seki. Forget Teren Sai, they haven't issued guidance on the plant there, other than to say its planned to produce 65,000 oz pa, its still being drilled to establish the resource."
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DofMeister, so they only need to raise circa $20m to reach 1Mtpa?....when in 3 years time production will go from 850ktpa to 1Mtpa.

If you are correct then capex over coming 3 years:
2021 => $11.4m
2022 => $4.3m
2023 => $4.3m (estimated by me as $20m -$15.7m = $4.3m)

If they are processing 850ktpa then that should probably be generating enough profit to fund the expansion to 1Mtpa....so debt shouldn't increase much, if at all. Although chances of a dividend would be zero.

I thought the second processing plant is planned for Teren-sai btw?

"It is not their job to save the planet."
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I doubt anyone suggested that banks have a moral responsibility to 'save the planet'. BUT if governments & politicians provide a framework for profitable environmentally 'friendly' investment then banks are obliged to be involved...indeed they would be stupid if they didn't follow the trend. Better IMO to make money on something that has a future than invest in something with finite & shrinking prospects....e.g. coal.

Can someone please explain what Alytn have planned for the next 6 years because my head is hurting!!

"operating the Sekisovskoye Mine at 850kt annual capacity for three years"....so presumably they will then ramp up production at Sekisovkoye to 1Mtpa, whilst building another 1Mtpa processing plant at Teren-Sai over the next 3 years (their 6 year plan...NOT 9 years as suggested in the latest results!!).

Capex over next 2 years is $11.4m (2021) and $4.3m (2022)....to reach and maintain 850ktpa.

Presumably in 2023/24 the plant will be upgraded to 1Mtpa at cost circa $8.4m to $9m (God only knows how the $40-50m figure fits into this equation)...."the Company has estimated that it will require an initial funding of US$40m-US$50m to attain 1Mpta target"

Almost as an afterthought: "Further funding will be required for the secondary 2Mpta target."

That's $45.7m to build a new 1Mtpa processing plant at Teren-sai PLUS the costs for developing the open pit mine there.

From EY independent competent persons report (July 2019): "Further, it is the intention of Altyn Management to ramp up production to 2Mtpa over a six-year period. This plan involves an increase in the capacity of the existing processing plant from 0.85Mtpa to 1Mtpa for USD8.4m and the construction of a new 1Mtpa metallurgical plant and tailings dumps for USD45.7m."

So 'only' $8.4m to upgrade current plant to 1Mtpa....which doesn't seem to agree with the figures in the latest report.

Just reading a bit of 'Sekisovskoye project history' and found:

"In 2007, the Group built the ALTYN MM plant that was capable of treating 850,000 tonnes of ore per annum."

This agrees with what I remembered. It does not agree with the latest report that seems to suggest they need a large investment to take the plant from 500ktpa to 850ktpa....when it shoudl

ld already be at or near 850ktpa capacity. So I would have expected a small amount to update equipment but not the big sums being mentioned. Those new offices they are going to be build must be spectacular!!

DofMeister, thanks for the pointer to the grade info.

"Just increased my holding to 1.1% of the share capital."

That would be over £400,000!!

Dofmeister, you seem to have more information than me....or read the report(s) when I glossed over them.
Your explanation make sense....although it would be good to know when they will be reaching the higher grade ore (>2.5 g/t).
Where did you get your information please?....it will save me having to search through countless documents.

IndoMiner, it looks like you know your stuff. I defer to your superior knowledge.

The obvious questions of management are:
1. why the milled grade is so much lower than JORC value?
2. What are they doing to increase milled grade?
3. Will ALtyn ever reach or get near the JORC grade? If not why not....if yes, in what timescale.

The latest 'independent' report either doesn't believe the JORC values are correct or that in the next 3 years ALtyn will struggle to reach even approximately half that value - reason unspecified!!...or does the report contain a reason?

I don't think 3.53 g/t is the head grade....isn't it the average grade of proved & probably reserves?

"as stated above it sounds like you have RDSA shares, sell and buy RDSB shares."
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or move to Holland

500,000ktpa at 3.53 g/t (head grade), 80% recovery would be circa 45,000 Oz per year. Food for thought!

So combined with the plan to increase mined ore perhaps they should have another plan to increase the grade (to run simultaneously)?!

IndoMiner, good question. Obviously either the head grade figure of 3.53 g/t is not correct or they are struggling to reach that figure (and will continue to struggle according to the report).

I sort of assumed that the maximum grade of the ore bodies is circa 3 g/t. When they mine this is reduced because will obviously remove more material than just the high grade ore. The newer equipment is supposed to improve the surgical removal of the high grade ore....but I doubt it will ever reach the 100% gold containing ore.

I seem to remember that when the production shifted from open pit to underground the grade of the ore was supposed to increase, because there was higher grade ore deeper down. But I don't think it ever really happened (I may be wrong & there was a slight increase). ALways plenty of excuses though....but ultimately the new equipment is supposed to fix them and lead to higher grade ore although I'm not sure about 3.53 g/t. At the moment I would be 'happy' with > 2 g/t.

But you are 100% correct...a 'simple' way to increase gold production is to increase the head grade of the ore. The 'independent' report would suggest this isn't really going to happen in any significant way....probably edge towards 2.0 g/t and a little above (I presume).