Altyngold Regulatory News (ALTN)

16 May 2007 07:01

Hambledon Mining PLC16 May 2007 16 May 2007 HAMBLEDON MINING PLC More gold, lower construction costs Update on progress Hambledon Mining plc ("Hambledon" or the "Group" or the "Company"), theAIM-listed mining and exploration company developing precious metal deposits inKazakhstan, is pleased to announce significant progress in both the mining andconstruction activities at the Sekisovskoye Gold Project. Refurbishment of theOgnevka treatment plant for the production of copper/gold/silver concentrate aswell as other valuable by-product concentrates has also commenced. Highlights •Mining activities are continuing at Sekisovskoye, with over 1.0 million cubic metres of material moved since the commissioning of the mining fleet in June 2006 •Grade control drilling has confirmed the style of mineralisation predicted by our geological model and shows an increase of 18% in contained gold in that area. This is consistent with previous results where western drilling at Sekisovskoye has shown higher contained gold than Soviet drilling had indicated •The construction costs are likely to be less than the budget set in June 2006, although time requirements have been extended •Wholly owned "TOO Ognevka" has begun refurbishment of the Ognevka treatment plant and commenced a study into the additional recovery of feldspar from tailings Sekisovskoye update Mining operations have continued with cutback excavations, tailings damconstruction and other support for mill facilities construction activities.Mining has exceeded targets for all but one month since beginning in June 2006,with over 1.0 million cubic metres of material moved. Construction of the mill facilities is ongoing. Although delays have beenexperienced from late delivery of our main ball mills and poor performance fromlocal construction contractors, all major equipment items have now beeninstalled, are in store or in transit. Our first ball mill has now arrived andwill be installed by the end of May and the second, which has been completed andis awaiting shipment, is planned to be installed by the end of June. Thisdelivery schedule is some nine months later than contracted, reflecting theextraordinary demand for mining equipment which certain suppliers have beenunable to properly schedule or fulfil. Whilst the standard of work performed by some contractors has been excellent,the timeliness in some cases has been poor. The principal reason is that only alimited number of such contractors are authorised to carry out certain types ofwork essential to the project, leaving little room for selection or negotiation.The Company's response has been to take on suitably experienced staff so as toallow the Company to acquire the necessary licences to do the work itself. Tothis end, the Company is now licensed to carry out electrical design and toconstruct tailings dams, processing facilities and buildings. All constructionwork is now under the direct management of Company staff, with only directlabour being subcontracted. The result has been an improvement in both thetimeliness and quality of the work and a significant reduction in cost.Similarly, the Company's mining fleet far outstrips the efficiency availablefrom local earth-moving contractors. Large sections of the work associated withsite preparation and tailings dam construction have been carried out by theCompany's own fleet, resulting in further significant cost savings which willimpact both the initial construction and the ongoing tailings dam developmentcosts. Additions to the earth-moving fleet to enable this work to be done havebeen authorised and their cost will be recouped within the commissioning period. The new powerline has been completed and connection to the new supply was madeon 3 May. The main transformer has arrived on-site and will be installedimmediately. The commissioning of the process plant will begin with the crushingplant later this month and will continue with the remaining sectionsprogressively through June and July. Regulations in Kazakhstan mean that finalapprovals to allow for procurement of certain reagents cannot be applied foruntil the completion and inspection of the associated storage and mixingfacilities. No significant delay is expected but it is not possible to predictthe time-line exactly. Exploration Open Pit Grade Control Results - Sekisovskoye Blasting on the 480-490m elevation bench, in the central area of the designedpit, necessitated the taking of blasthole drilling samples for demarcating thelimits of ore zones, as defined by a 0.5g/t Au cutoff. This ore zone was definedby 134 blastholes from which 723 one metre length samples were assayed forcontained gold. A 3-D wireframe model representing this ore zone was used tocontrol the generation of a block model. Gold grades for the model blocks wereestimated, using the blasthole assays, and these blocks were added to theoriginal grade model, as defined from the exploration diamond drill samples, fordirect comparisons between the two model types. Overall, the blasthole grademodel confirmed the validity of the exploration resource model in this area. Theresults were as follows: Model Au gm/t Tonnage Contained Au oz Exploration 1.45 12,900 601.4 (18,705gm) Grade control 1.46 15,074 707.6 (22,008gm) Percentage increase 0.7% 16.9% 17.7% Even with the increase in tonnage, partly due to the effects of dilution, thegrade control model is still higher than the original grade model, and theoverall increase in contained metal is 18%, which equates with earlierstatistical analyses that indicated an upgrading of contained gold, from theformer-Soviet drilling results, in the order of +17%. It is predicted that thistrend is likely to continue for the whole of the deposit, especially in areas ofsparse sampling and at depth where the probability of finding additional goldmineralisation is high. Geological exploration - Tserkovka Results of a 5,000m exploration drilling programme, to determine the magnitudeand continuity of gold mineralisation, as indicated from favourable historicalsampling, indicated that contained gold in exploitable commercial quantities wasnot apparent. This exploration activity was centred along strike at Tserkovka,situated 5km NW from the Sekisovskoye open pit operations. The explorationdrilling also included two small target areas, situated NW at 6km and 2km. A total of 45 diamond drillholes and 4 minor surface trenches contained anaverage of 102m linear metres ranging from 24m to 323m. Gold grades from the4,347 core and trench samples showed a range in values from 0.0g/t to 46.8g/tand silver values ranging from 0g/t to 903.6g/t. A number of drillholeintersections contained favourably mineralised breccias and dykes, similar tothe geology at the Sekisovskoye deposit. However, these zones at Tserkovka arerelatively narrow and continuity along strike and downdip appears to be limited.The best continuity was found at profile 26 where an interpreted 1.2m wide zonecontained 1.0g/t gold and traced for about 90m along dip. Although the results are disappointing, it is possible these relatively minorgold intersections represent an upper expression of a large auriferous brecciapipe at depth, where the physico-chemical conditions are more appropriate forgold mineralisation. Therefore, as a second phase to the exploration drilling atTserkovka, further strategic drillholes will be drilled to intersect knownfavourable breccia zones at depth. Exploration at Sekisovskoye deposit Current exploration drilling is centred within the western margins of the openpit where extensions of orebody 11 are being defined for both open pit andfuture underground exploitation. Analytical results have not been received yet,but mineralised intersections have been observed. Known gold mineralisation,immediately along strike to the Sekisovskoye deposit, will also be targetdrilled to help better define the extent of gold resources in these areas. Nextyear, underground drilling will be focused on upgrading the resources andreserves for underground extraction. Ognevka processing facility Registration of the acquisition of TOO Ognevka has been completed and the courthas approved the rehabilitation plan. Renovation of the clinker treatmentfacility has commenced. The first stage of renovation focuses only on those parts of the plant that willbe used for the treatment of zinc smelter residues, 150,000 tonnes of which arealready on site. However, the plant was originally built to treat the outputfrom an associated mine (to which the Company does not currently have the miningrights) which contains substantial resources of feldspar, with potentialby-products including tantalum, lithium, niobium, tin and mica. Productionfacilities to treat these ores are also in place and can potentially be broughtback into use. Whilst the possibility of acquiring the mining rights is a mediumterm objective, a study is being carried out on the more immediate opportunityto recover substantial quantities of tailings which can be retreated to recoverthe feldspar and other by-products which were not previously extracted. The processing facility is configured to treat up to 350,000 tonnes per year ofzinc smelter residues, but the first stages of a significant expansion of thefacility have already been completed by the previous owners. This includes anextension of the mill building, and construction of the ore handling system andmill-feed storage bins. As soon as production from the existing capacity hasbeen successfully restarted, a study into the completion of the expansion willbe carried out. Enquiries Hambledon Mining plcNicholas Bridgen, Chief Executive Telephone: +7 701 733 8915 Seymour PierceNicola Marrin Telephone: +44 207 107 8018 Bankside ConsultantsMichael Padley / Daniela Hale Telephone: +44 207 367 8888 Qualified Person The drilling results in this announcement have been reviewed by Roger RhodesBSc, MSc, MIMMM, independent geological consultant with Computer ResourceServices. He has over 35 years of relevant experience and is a qualified personfor the purposesof the JORC Code and the AIM Rules. Note to editors Hambledon Mining plc is an AIM-listed gold mining and exploration company whichis developing the Sekisovskoye gold deposit and owns the Ognevka processingplant, both of which are close to Ust Kamenogorsk in East Kazakhstan. At Sekisovskoye, the company is mining from an open pit and constructing an850,000 tonnes per year treatment plant. Production from the open pit willaverage over 40,000 ounces per annum. After the start of open pit processing,the Company plans to develop the much larger underground resource which isexpected to lead to a combined production rate of around 100,000 ounces peryear. The Ognevka processing plant is being refurbished and will produce concentratescontaining gold, silver, copper, iron and coke from the retreatment of zincsmelter residues. Ends This information is provided by RNS The company news service from the London Stock Exchange