TALDY-BULAK GORGE, Kyrgyzstan, July 29 (Reuters) - K yrgyzstan on Wednesday opened a gold mine at the Taldy-Bulak Levoberezhny deposit, a joint venture with China and so far the second “world-class” gold project with foreign investors.
The field, discovered by Soviet geologists, lies in the Taldy-Bulak Gorge in the Tien Shan mountains some 120 km (75 miles) east of the capital Bishkek and holds an estimated 65 tonnes of gold. Continued exploration is expected to add up to 20 tonnes to the reserves, Kyrgyz geologists say.
Kyrgyzstan, a mainly Muslim nation in Central Asia with a population of 5.5 million, remains volatile after popular revolts deposed two presidents in 2005 and 2010. It sorely needs foreign investment to alleviate widespread poverty.
“This is a significant event for Kyrgyzstan’s economy, but this is just the beginning,” Kyrgyz Prime Minister Temir Sariyev said at the opening ceremony.
“We will continue this work in the future and will launch a number of (mining) combines. Next month the Bozymchak deposit will be launched at full capacity,” he said in a reference to a project implemented by Kazakh firm Kazakhmys Gold Kyrgyzstan.
Taldy-Bulak’s underground mine will be run by Altynken, a venture in which Kyrgyz state gold company Kyrgyzaltyn holds 40 percent and Superb Pacific Limited Company, a wholly owned subsidiary of China’s Zijin Mining Group Co. Ltd, another 60 percent.
Altynken, which holds a 19-year licence, has so far invested $246 million. It aims to produce 1 tonne of gold by the end of this year. Annual output is set to average 3.7 tonnes of gold in several years.
Taldy-Bulak will be profitable as long as gold price does not fall below $1,080 per ounce, Kyrgyzaltyn Board Chairman Almaz Alimbekov told reporters at the site. As of 0840 GMT on Wednesday, spot gold traded at $1,098 per ounce.
This is the second major gold project launched in the country after the collapse of the Soviet Union in 1991.
In 1997, Kyrgyzstan started joint production with Canada’s Centerra Gold Inc. at Kumtor, its largest gold deposit.
In the past two years, the two sides have been locked in uneasy negotiations as Kyrgyzstan, which owns a third in Centerra, seeks to form a 50-50 joint venture to run Kumtor, which is the core asset of the Toronto-listed investor. (Writing by Dmitry Solovyov Editing by Jeremy Gaunt.)