Location and History

Russia
Aprelkovo

The Aprelkovo gold deposit is situated in the Shilkinskii district, near to the towns of Shilka and Nerchinsk and approximately 120km east of the regional centre of Chita, and can be easily accessed via a paved road. The deposit is located approximately 3km to the south of the navigable River Shilka. The Trans-Siberian railway is located on the north bank of the River Shilka, with the nearest stations of Shilka (regional centre); Kholbon and Priiskvaya, at distances of 20km, 7km and 45km respectively from the deposit.

Power supply is provided from two power lines (110 and 10kv) running through the licence area. A 35kv line also terminates at the mine. Industrial water is supplied from Shilka River, whereas drinking water is obtained from a well close to the Oskino Stream, to the north of the mine.

The elevation of the area ranges from 580 to 675m asl. The typical landscape of the deposit area consists of low rolling hills.

The climate is extreme continental with a long winter and short, hot summer. The maximum temperature is +37°C whereas the minimum is -46°C, with the annual average of -1.6°C. Annual precipitation is in the range of 300 - 600mm, with most of it falling in August. Rivers are frozen from November to the end of April/beginning of May. The thickness of the snow cover in winter is usually 150 - 200mm and in winter, soil is frozen to a depth of 3 - 4m.

Nordgold acquired the mine in 2007.

In 2016, the regional tax authority decided to impose an additional tax payment of 229 million roubles (approximately US$3.5 million) on the Aprelkovo mine operations related to the period 2011 and 2012. The additional tax assessment mainly comprises a further royalty, which was calculated by the tax authority based on the disputable taxation of lower recoveries. This assessment was confirmed by the Arbitration Court of Appeal. In July 2016 the Court of Cassation confirmed the decision of the Arbitration Court of Appeal. The claim was specific to Aprelkovo and is not expected to impact other Nordgold mines in Russia.

The additional tax assessment will result in Aprelkovo generating negative free cash flows, which are now expected to continue for the remaining two years life of mine. As a result, Aprelkovo, the smallest mine in Nordgold’s portfolio by some distance, will be unsustainable as a standalone entity. These circumstances have resulted in the decision to file a petition for bankruptcy of Aprelkovo. The observation procedure was introduced by the Arbitration Court of Moscow on 22 December 2016.

Operating and Financial Highlights

2016 2015 2014 2013 2012 2011 2010
Run of mine (kt) 476 5,896 10,347 12,167 9,826 8,667 9,968
Waste mined (kt) 457 4,544 8,080 10,374 7,365 7,039 8,367
Ore mined (kt) 19 1,352 2,267 1,793 2,461 1,628 1,602
Stripping ratio (tn/tn) 24.3 3.4 3.6 5.8 3.0 4.3 5.2
Ore processed (kt) 912 1,485 1,851 1,644 1,465 2,577 1,627
Grade (g/t) 0.74 1.09 1.23 1.27 1.35 0.81 1.18
Recovery (%) 47.7 47.7 47.7 46.7 47.7 60.0 60.0
Gold production (koz) 9.8 19.8 31.7 32.7 35.9 30.3 35.0
Gold sold (koz) 9.7 19.8 31.8 32.7 35.8 30.4 35.3
Average realised gold price per ounce sold (US$/oz) 1,237 1,154 1,289 1,333 1,669 1,613 1,252
Revenue (US$/m) 12.0 22.9 41.0 43.5 60.0 49.1 44.3
EBITDA (US$/m) 3.1 9.4 9.2 8.8 23.8 21.7 16.4
Total Cash Cost (US$/oz) 856 669 994 1,020 863 655 628
AISC (US$/oz) 976 804 1,094 1,140 - - -

Technology

The processing operation at Aprelkovo uses heap leach technology to recover gold from crushed ore.

Historically, gold was recovered from oxide and, more recently, transitional ore types which achieved gold recoveries of 63.7% and 57% respectively. However, both of these ore types have now been exhausted.

As an interim measure, primary ore is currently being treated. This is less amenable to processing using heap leaching than the oxide or transitional ores. As a result, gold recoveries have reduced to circa 46-48%

Milling and Classification
Nordgold’s open pit operations use conventional surface mining methods involving drilling and blasting, followed by a load and haul process allowing for selective mining of the ore. Ore from the pit is then transported to a designated stockpile and fed into a crushing circuit. The sized ore is then conveyed to a Heap Leach Facility.
HEAP LEACH
The ore is heaped on a clay lined leach pad where it is irrigated with the sodium cyanide leach solution. The solution percolates through the heap and leaches gold from the minerals. The leach solution containing the dissolved cyanide gold ("pregnant solution") is then collected, treated in a process plant to recover gold on carbon and then recycled to the heap after reagent levels are adjusted.
Elution
The final gold loaded carbon is removed and washed before undergoing elution. Elution is achieved by introducing the gold loaded carbon to a solution of caustic at a high temperature (>110°C) and under high pressure. This results in the reversal of the attachment process, with the gold detaching from the carbon back into solution. This produces a small volume of solution with a high gold concentration.
Electrowinning
The gold loaded eluate solution that emerges from the elution process is passed through electrowinning cells, where gold is deposited onto the cells’ cathodes.
Smelting
The cathodes then undergo a smelting process, further refining the gold and leading to the eventual production of gold ingots suitable for transport to a refinery.

CONTACTS

Anastasia Shatskaya

Acting Head of Media Relations
tel.+7 495 644 44 73 #707 6697

ROMAN MEZHUEV

RECRUITMENT MANAGER
tel.+7 495 644 44 73

OLEG BAZALEEV

HEAD OF SUSTAINABLE DEVELOPMENT PROJECTS
tel.+7 495 644 4473 #707 6746