Bogomolovskoe Gold Deposit

Licenses
The Bogomolovskoe deposit is being investigated and developed according to the License for Staroverinsk gold bearing area (ChIT №12355 BR).

Geography and economic situation
The license block is situated in the confluence of the small Srednyaya and Nizhnyaya Borzia rivers in Transbaikal Territory, 35 km from the regional center Kalga and 640 km from Chita. The nearest railway station is Dosatuy, 100 km from the block. Roads are mainly unpaved; the distance to paved highways is 200 km. The deposit area is crossed by a 110 KV power line. Absolute elevations of watershed division lines are no more than 1000 m; relative elevations are 300m maximum.
The climate is severe continental. The area is partly forested.
Some residents are employed in prospecting teams that work placer gold. Hiring is limited.

Geology of the deposit
Bogomolovskoe is confined to the contact zone between intrusive rocks and sedimentary metamorphic layers complicated by multiple faults in various directions.
Gold bearing deposits are mainly found as vertical or flat vein-like and stockwork-like forms. Main mineralizations are generally found in metasomatically altered rocks in the contact zone.
The tectonic faults have envolved into a fairly thick (50m maximum) oxidation zone. Oxidized ores contain free gold and accumulations of ore minerals, as well as iron oxide jackets.
Primary and oxidized ores are low-grade, with average gold grade varying from 1.0 to 5.0 g/t. The deposit is classified as mono-metal gold; associated elements are Ag, Cd, Cu, As, Bi, Pb and Zn.
The deposit is rated as Group III complexity.
Metallurgical testwork has showed that gold is not extractable in commercial quantities by gravitational or flotation methods producing concentrates.
Direct cyanidation of oxidized and primary ores in heap leaching produces a gold recovery of 50 to 80%.

Geological coverage, reserves
Hard rock gold in Bogomolovskoe was discovered in 1965-1968.
Priargunskoye PGHO LLC conducted geological exploration under license ChIT 00272 BR from 1992 to 2002. According to the survey results, the reserves (Protocol № 750 from 26.12.2002. TMRC under MONR for Chita Region) were 1.7 tonnes, and inferred primary resources of category Р1 were 6.5 tonnes. Provisional exploratory standards for oxidized ores were established, and heap leaching was proved in principle for oxidized oreprocessing.
Exploration was continued by the present operator, GRE — 324 LLC, in 2003-2010.
As a result of geological exploration, TMRC Zabaikalnedra (Protocol 866 of 22.07.2010) entered the following reserves calculated from exploratory standards as of 01.03.2010 in the state reserve books:

Accounting for form 5-GR depleted and written-off reserves, book reserves as of 01.01.2010, for category С1+С2 are 7.319kg balance and 2.021 kg off-balance ores.

Growth prospects for Bogomolovskoe reserves.
During exploration of Bogomolovskoe flanks, its reserves have been increasing annually. In 2008-2009, the Podgorny and Uzhny deposits, with reserves of oxidized ores of about 250 kg, were explored in the field. An appraisal in 2010-2011 increased the reserves by at least 300 kg of gold. The prospects of the ore field are associated with the Yavlensky tectonic zone, which has still not been adequately studied.

Mining
Bogomolovskoe is currently being mined by Rudtekhnologia LLC under the “Bogomolovskoye development plan developed by ZabaikaltzvetmetNIIproekt LLC in 2004.
Annual production is expected be 200 ktonnes of commercial ore.
The heap leaching technology includes:

1. Open pits (3) – open pit mining of 200 ktonnes per year capacity. Drill and Blast mining method. Ore and waste are hauled by dump trucks.
2. Crushing and screening unit includes weighing, initial ore storage, crushing unit and open pelletizing unit.
3. The process plant area includes main buildings and structures: heap leaching sections, reagents storage, emergency tank and boiler.

Historically, a total of 500 Ktonnes of oxidized ores were mined and processed before 2011.