The new blueprint, which is designed to better exploit existing infrastructure and the large resource base, revealed a significant increase in management’s estimate of underground resources from 1.8mln ounces of gold to around 6mln ounces with an average grade of 5.34 grams per tonne.
This follows more than 53,000 metres of underground drilling, with a full independent Competent Person’s Report (CPR) now being prepared to be published in early 2014.
The company said the existing processing plant, surface and underground infrastructure, along with an underground operating transport decline, combine to support a “robust economic case” for the expansion of underground mining operations.
This includes a 22-year mine life to generate around US$1bn in free cash flow, with expected gold production of 27,500 ounces for 2013, which is forecast to rise to more than 100,000 ounces a year by 2017 – a compound annual growth rate (CAGR) of 35%.
Cash costs are estimated to be around US$500 per ounce of gold, underpinning an economically viable operation even if the gold price were to fall further.
The total remaining capital needed to finish the mine’s development is estimated at US$130mln, with the bulk of that being spent over the next three years, and will be funded through internally generated cash flow, debt, and, “if appropriate”, equity.
Hambledon’s chief executive Aidar Assaubayev said: “Following a process that began a year ago, the board and senior management of Hambledon have developed a long-term plan with the goal of becoming Central Asia's leading gold miner in terms of both production and reserves.”