Project for construction of Ozernoe Mining and Processing Plant …mvs.metropol.ru/mediacache/68fb83a5-fbf3-439e-ac18-aee... · 2009-12-18 · Ozernoe deposit (Zn, Pb, Au) is owned

Project for construction of Ozernoe Mining and Processing Plant for the production of Zinc, Lead

and Gold concentrates. Republic of Buryatia, the Russian Federation

(Summary of Bankable Feasibility Study)

Presented by: Sergey Garichev – Deputy General Director, MBC Corporation

London - December 1-2, 2009

Ozernoe deposit (Zn, Pb, Au) is owned by Metropol Group of Companies (MBC Corporation). Located inBuryatia, 180 km north from Transsib railway; in the vicinity of main consumers in China. The JORC IndicatedResource totals 157 Mt of ore. The deposit is one of the best in reserves, ore quality and logistics.

The construction of Ozernoe mining and processing plant is being planned to mine 8,0 mtpa of ore andto produce 740 thousand tons of Zn concentrate, 110 thousand tons of Pb concentrate and 2,5 tons of‘Dore’ alloy.By production volume Ozernoe deposit could move up to the 6-7th place among the world producers.Commissioning – year 2012, reaching production capacity – year 2013.

The first infrastructural facilities have been built and commissioned: a shift camp, a core storage, localroads, cellular telecom system, satellite Internet, power lines.These secure advancement of the construction of the mining and processing plant

A Technical Project for deposit stripping has been approved by the Russian authorities. Stripping andblasting work commenced. The construction of the mining and processing plant is in progress, to becommissioned at the end of 2010. Tenders for the delivery of a mining equipment, complete process plantequipment and power plant are issued.

A Bankable Feasibility Study is developed. An approval is received from the Ministry of Industry and oneof the leading banks of Russia. The discussions on the project financing are ongoing with the largest banksof China, Japan and USA.

Project status

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Location of the Republic of Buryatia in EurasiaDistance by rail:

Moscow - 6100 kmVladivostok (sea port) - 3400 kmChelyabinsk (customer in Russia) - 4300 kmUst-Kamenogorsk(customer in Kazakhstan) - 3300 kmBeijing(customers in China) - 2900 km

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Assets of «METROPOL» Group managed by MBC Corporation. Transport infrastructure of Buryatia.

1. Ozernoelead-zinc deposit

157 mln tons of ore (JORC)(Zn – 8,16 mln tons, Pb – 1,6 mlntons, Ag – 4,5 thous.tons)

4. Ermakovskoeberyllium deposit

1,4 mln tons of ore(Be content – 1,0%)

3. Nazarovskoegold-sulfide-zinc deposit

6 mln tons of ore(Zn – 0,5 mln tons, Au – 11 tons)

5. Talinskoebrown coal deposit

13 mln tons of coal

2.Kholodninskoelead-zinc deposit

178 mln tons of ore (JORC)(Zn – 10 mln tons, Pb – 1,42 mln tons)

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Ozernoe ore deposit – General description

Location - 160 km north from Mogzon rail station of Transsib, 30 km from federal road Ulan-Ude - Chita, 60 km from regional center - Sosnovo-Ozerskoye settlement.

Ozernoe ore deposit is one of the world’s largest deposits

Reserves and resources, accounted by the State balance of Natural resources of RF:

Resources as per JORC

В+С1- 104, 96 Mt of ore

Lead - 1,31 Mt 1,25 %;

Zinc - 6,90Mt 6,57 %;

Silver - 3942 t 37,6 g/t;

С2 - 23,2 Mt of ore

Lead - 0,2 Mt 0,89 %;

Zinc - 1,14 Mt 4,89 %;

Silver - 571 t 25,5 g/t.

Resource potential

Gold - 25 t

Indicated Resource:

157 Mt of ore*

Zinc – 5,2 %

Lead – 1%

*Resource classification by AMC Consultants (UK), 2006.

Valid till: 15 June 2024

Mining License

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As per grade and volume, Ozernoe is comparable to the world’s largest zinc deposits

Grade and volume comparison with other similar foreign projects

Red Dog

Lanping

Shalkya

Rampura-Agucha Century

Mount Isa

McArthur River

VazanteAngouran

Antamina

Ozernoe

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de, %

Reserve + Resource, Mt

Project Owner

Mount Isa Xstrata

Red Dog Teck ComincoMcArthur

River Xstrata

Lanping BHP Billiton

Rampura-Agucha Hindustan Zinc

Shalkya Shalkya

Ozernoe MBCCentury OZ minerals

AntaminaXstrata/BHP/Teck Cominco

Vazante CMMAngouran Anzex Resources

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Strategic objective –Construction of “Ozerny GOK” mining and processing plant on the basis of

polymetallic ores reserves of Ozernoe and Nazarovskoe deposits

Mining method – open pit

Operations startup – 2012

Mining rate –8,0 mtpa in total .

Annual average concentrate production:

- Zinc concentrate - 740 thousand tons

- Lead concentrate - 110 thousand tons

Annual average metal production in Dore alloy:

- Silver - 100 tons

- Gold - 1,24 tons*

* including Reserve of С2 category and Resource of Р1 category

GOK Life time – 25 years

Designed output capacity of Ozerny GOK:

Ozerny GOK Project

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Source: Company data, broker reports 8

Planned production volumes of MBC will bring the company into line of the world’s largest zinc producers

Zinc producers (zinc in concentrate)

627 578 572 561 509390 368 328 288

210 191

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700

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OZ

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Thousand tonnes / year

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Sales breakdown

Pricing scenarios Proceeds,

mln $/year

Conservative forecast

Zn – 1350 $/t;

Pb – 1300 $/t;

Ag – 13 $/oz;

Au – 950 $/oz

600

Current prices

Zn – 2370 $/t;

Pb – 2368 $/t;

Ag – 18 $/oz;

Au – 1129 $/oz

1 070

Probable forecast

Zn – 2500 $/t;

Pb – 2500 $/t;

Ag – 20 $/oz;

Au – 1200 $/oz

1 211

Ozerny GOK Project

Russia

Kazakhstan

China

50%30%

20%

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Main construction facilities

Ozerny GOK Project

Facility Features

Open cast mine 650 million tons of rocks to be moved

Processing plant Production rate - 8 mtpa of ore

Tailings and Pyrite storage Total volume – 111 million tons

Site infrastructure Site area – 35 sq.km

Power line (“Buryatenergo” – local grid) 110 kV, 25 MW

Power plant 60 MW

Automotive and rail roads 161 km

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Long-term action plan

Key stages Start time of activity

Stripping

Commissioning of a mining enterprise

Commencement of Processing Plant construction

Commissioning of Mining and Processing Plant

Production ramp-up to designed mining rate

III Q, 2009

III Q, 2010

I Q, 2011

I Q, 2012

III Q, 2013

Ozerny GOK Project

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Ozerny GOK Project

Design and TEO works

Technical Project of construction of Ozernoe Mining and Processing Plant in Russian format

Sibtsvetmetniiproekt

Krasnoyarsk, Russia

2010

Technical Project “Stripping and pilot mining of Ozernoe deposit”

PiterGorProject

St.Petersburg, Russia

2009

Sections of International BFS Hatch

Perth, Australia

2008

Business plan for Construction of Ozernoe power plant

SibVNIPIenergoprom

Irkutsk, Russia

2007

TEO (project) of construction of rail road Mogzon-Ozernoe

Vostsibtransproekt

Irkutsk, Russia

2007

Strategic options and business plan of MBC Corporation

Roland Berger

Moscow office, Russia

2007

Pre-feasibility Study AMC Consultants

Maidenhead, UK

2006

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Ozerny GOK Project

Isinga Lake

Gunda Lake

Khorga Lake

Site layout

1. Open pit, processing plant2. Power line 110 kV3. Power plant 60 MW4. Road and rail to Mogzon station5. Tailings storage facility6. Pyrite storage facility7. Warehouses, auxiliary 8. Water pipe9. Shift camp

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Mining – open pit

Life of mine – 18 years.

A mining transportation system using dump trucks and putting wastes into outside dump is adopted

Preparation for rocks excavation is to be carried out with drilling and blasting

Total volume of material to be moved – 650 mln tons

Ozerny GOK Project

Open pit parameters at the end of development:

- in plan: 2675 х 900 m.- depth: 340 m.

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Process flowsheet. Processing plant. Schematic process flow diagram.

Ozerny GOK Project

Thickening and filtration of Pb concentrate

Crushing

Separation Grinding

Reverse water treatment

Reagent storage and preparation

Flotation

Reverse water recovery and return

Lump waste to dumps

Stockpiling and shipment of Pb

concentrate[Pb]≥50%

Tails transportation and disposal to

tailings storage facility

Ore8 mtpa

Chemical composition:Zn = 3,3-6,1%Pb = 0,6-1,2%Fe = 23-30%S = 20-30%Au = 0,1 g/tAg = 18-56 g/t

Mineral composition:Sphalerite – 4,7-5,1%Galenite – 0,6-0,9%Pyrite – 25-40%

Thickening and filtration of Zn concentrate

Stockpiling and shipment of Zn

concentrate[Zn]≥53%

Ore stockpile

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Built infrastructure

Ozerny GOK Project

Shift camp Core storage facility and geologists’ camp

Power line 10kV Telecom, Internet

Roads, a bridge

Core storage

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Completed works on construction of mining and processing enterprise

Ozerny GOK Project

Forest removal is completed on an area of 85 hectars.

Top soil removal and stripping was completed at the open-pit area cleared from the forest. According to the Mining Plan for 2009 127 000 м3 of top soil have been removed to stockpile and of 273 000 м3 of overburden - to waste dumps.

In October this year 60 000 м3 of rocks have been blasted. 854 holes (4300 meters) drilled, 35 tons of explosives used.

Waste dumps and top soil stockpile have been set up.

On-site roads - 10 km have been built

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Project management team

Mikhail Slipenchuk – Chairman of Board of Directors of MBC Corporation, General Director of IFC “METROPOL”.

Ilya Okhtyrsky –General Director of MBC Corporation, Deputy general director of IFC “METROPOL”.General management, project financing.

Sergey Garichev –Deputy General Director of MBC Corporation. FEED, design, TEO and BFS development, production setup, operative planning.

Dmitry Novikov –Chief Engineer of MBC Corporation. Design and engineering in Russian format.

Ilgizar Fakhrutdinov –Director of Ozerny GOK.Management of site activities.

Public Relations DirectorTatiana Rovenskaya - [email protected]

MBC Corporation

Russia, Moscow 119049, 13th Donskaya street

Tel/Fax: +7 (495) 221 71 [email protected]

Alexander Perfiliev–Deputy Technical director of “MBC Resources”. BFS development.

MBC Corporation

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