Deposits

All the lode gold deposits of CAO have their legal owners, approved by the authorities according to the established procedure. The explored resources have assessed from a geological, economic, and business prospectives. Necessary investment, terms of pay off and effectiveness have been determined for their industrial exploration.

1.Gold-solver Valunistoe deposit.

Location: Anadyr district, 180 km away from the city of Anadyr, all-year-round road to Egvikinot village
Characteristics: epithermal formation
Resources: as of 01.01.2005 – more than 12 tons of gold, 90 tons of silver
Average gold and silver content: Au from 7 to 17 g/ton, Ag – from 50 to 137 g/ton
License: the right to use the land for geological exploration and metal mining issued 01.02.1999 is owned by A/S Chukotka Ltd
Productivity: 200 tons of ore a year

Financial data: specific capital investment into yearly production of metal – 5.9 dollars/g; production costs – 9.0 dollars/g, profitability – 34.4%.
The company started its business in 2003. It built an enriching factory with productivity of 200 thousand tons of ore a year, 2 open cast-mines for ore mining, set up a temporary village for the workers, stationary lodges for 250 people, and erected power lines 197 km long based on the local Egvikinotkaya Power Plant.
Gold-mining since 2003.

Dynamics of mining at Valunistoe

2.Kupol gold and silver deposit

Location: 430 km north-west of Anadyr, 200 km south of Bilibino, 320 km south of Pevek. Transportation: by car or helicopter. The company plans to finish construction of a tarmac runway for airplanes in 2006.
Characteristics: low-sulphide epithermal formation.
Resources: explored resources of primary for open processing – 91.2 tons of gold and 965 tons of silver; forecast resources: 177 tons of gold and 2085 tons of silver.
Avarage gold and silver content: Аu – 23.7 g/t, Ag – 251.3 g/t.
License: AND 01074 VE belongs to a joint Russian-Canadian Enterprise “Chukotka Gorno-Geneologicheskaya Company” CJSC: 25% - administration of the Chukotka Okrug, 75% Berma Gold Corp, Vancouver, Canada.

Productivity: processes 400 tons of ore a year and extracts 9.2 tons of gold on the average including silver which is counted and valued as much as gold.
Financial data: specific capital investment into annual productivity -- 20.5 dollars/g, production costs – 2.83 dollars/g, profitability – 24.5%.

In 2005 the company provided electric power to its mines and started working in the prime mode (2007-11) with the level of ore open and underground mining of 809 thousand tons a year, annual extraction of gold being 15.4 tons, of silver – 163 tons. In 2006 the company will finish construction of a lodging complex for 600 people, a gold extracting factory, and other buildings, service complexes, warehouses, etc.
Work on the open-cast mine and preparations in underground pits are under way.

3.Gold-sulphide Maiskoe deposit

Location: Chaoun District, 200 km east of Pevek.
Characteristics: one of the Russia’s biggest ore resource, 90% of resource is sulphide ore
Resources: for mixed underground and open mining – 136.1 tons
Average silver content: Au – 16.2 g/ton
License issued in 1999 to Goldore Mayskoe Company PJSC, a member of Highland Gold-mining Structure, license valid until 2024.
Productivity: processing 550 thousand tons of ore and extracting 5.0 tons of gold;

Financial information: specific capital investment into annual metal output – 15.8 dollars/g, production costs – 5.47 dollars/g, profitability 11,1 %.
So far the company has built a lodging complex for 500 people, autonomous diesel-run power station 2 Megawatt, objects of infrastructure. Boring programme will last 1.5 years and provides for boring 193 wells 34.1km in length and analysis of the kernel. Expected increase in resources in the “Measured” and “Indicated” categories is no less than 3 million tons of ore.

Table. List of other lode gold deposits of the Chukotka Autonomous Okrug as of 01.01.2005

Name of deposit	Balance resources (tons)	Average content (g/t)	Licence holder	Mining (t)	Propriety of industrial exploration
*Karalveemskoe* Bilibin District, 18 km North-west of Bilibino	30.24	32,2	Karalveem rudnik PJSC	1,0	Yes, being prepared
*Dvoinoe* Chaoun District, 140 km east of Bilibino	2,79	63,9	Severnoe Zoloto CJSC	0,16	Being operated
*Sopka Rudnaya* Chaoun District, 260 km south-east of Pevek	0,5	6,8	IF Chukotka CJSC	—:—	Yes, provided if resources increase
*Klen* Bilibin District, 260 km north of Bilibino	8,05	19,0	Ytn	0,3	Yes, being prepared

Anadyr

4:38 -14°C

COMMENTS

The program of economic development in Chukotka can be carried out, considers vice-premier of government CHAO M. Sobolev.

First of all, the long-term program leans on resources of peninsula. Let’s begin that geological resources of Chukotka are explored today on 10 %-17 %. The next regions are explored much better. And even on these, tentative estimations resources here can be found. The proved resources of gas on the Priosernoe deposit - 7,3 billion cubic meters. Oil resources are estimated approximately in 10 million tons, the proved stocks make 4 million tons of them. They are dispersed on small Fields, such, as Hatirskoe, where extraction is conducted by "Sibneft" company. But it is not necessary to dismiss a shelf – it’s insufficiently studied yet, but there are data, that it’s resources can make up to 14 billion tons of conditional fuel. Exxon Mobile Company in similar ice conditions, in Baffin bay has constructed 7 platforms. What prevents to construct them here?
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Reindeer breeding can be profitable: E. Marochkin acting on the head of agriculture and foodstuffs department makes comments.

There was a moratorium on an industrial slaughter of deers in district till 2006. But now it is removed, farms have allocated a contingent for commodity slaughter this year. It is planned to hand over in a trading network about 9 thousand deers this year. Within the limits of national project the agrarian and industrial complex have got slaughter area on terms of financial leasing which is assembled in Kanchalan. Basically its value is in that correctly cut production will receive a trade look and will answer all established norms. The livestock of deers for September, 1st - from above 183 thousand. It’s below the level of 1990 (490 thousand heads), nevertheless, in Chukotka a livestock grows on faster rates, than on Yamal, and it’s our main competitor. Potential market - not only Vladivostok, but also Japan, Korea, China. Reindeer breeding is, at least, preservation of a traditional way of life of native people and food safety of region and when sales volumes become great enough, branch can turn in profitable.
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