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TSAGAAN SUVARGA COPPER & MOLYBDENUM PROJECT

Location:The Project site is located in the territory of Mandakh soum, Dornogovi aimag, in 560 km from Ulaanbaatar city, 220 km from Sainshand town (Trans Mongolian railway station), and 280 km from Choir town.


Geology and Resources

The geological campaign performed at the Tsagaan Suvarga property until procurement of the license by MAK, possessed significant fatal flaws such as low recovery rate of the drill cores, incomplete coverage of whole ore body and borehole location intervals were distantly located. Therefore, the previous exploration campaign lacked international compliance, and moreover, the results and reports of such campaign have not been accepted by the State Mineral Resources Certification Committee. Due to these facts, MAK was required to make detailed exploration works and additional drilling under the supervision of independent qualified person during 2001 and 2008. The result of this detailed exploration works reported in compliance with international reporting guidelines (CNI 43101 and Jorc, Australia) and the resources of the property was certified to the State mineral resources funds upon acceptance by the Mineral Resources Certification Committee.
Total proven reserves of the property is 250 million tons of primary sulphide ores equivalent to 1.6 million tons of copper and 66,000 tons of molybdenum. The property has also 16 million tons of oxide ores sitting as a cap over the sulphide ores.

Project Progress Timelines:

2001 – 2008
MAK funded detailed exploration and additional drilling campaign

2006 – 2007
Technical audit to the exploration results, Preparation of the geological report by P&E Mining Consultants under CNI 43-101 compliance

2006 – 2008
Technological testworks at Erdenet Mining Corporation, SGS Lakefield, CIMM Chile and SGS Australia

2008
Resources/Reserves estimate is revised by Micromine Consulting Pty under the Australian JORC compliance

2008 – 2011
Bankable Feasibility Study and Basic Engineering Design complete by Polysius Australia, SNC Lavalin, Coffey Mining and Bateman International

2010 – 2012
Purchase and assembly of major mining equipment

2011
Contract signing for purchase of main processing equipment with FLSmidth Salt Lake City Inc.

2011
Detailed report for social and environmental impact assessment is completed by JEMR Ltd

2012
EPCM contract with WorleyParsons

2012
Transportation contract for main processing equipment and materials with Panalpina

2012 – 2013
Startup of the Tsagaan Suvarga open pit mine

2013
Offtake framework agreement for Tsagaan Suvarga copper concentrate


Open pit mine

The Tsagaan Suvarga open pit started in 2012 and is engaged in soil stripping nowadays. The production capacity of the open pit is 14.6 million TPA ores and 14.4 million TPA overburden removal. With its full capacity, the mine will employ 300 workers. Heavy duty mining equipment is applied today for mining operations including Belaz trucks (220 tons), Bucyrus shovels with electric and diesel engines (15 and 20 cubic meters bucket capacity), Caterpillar front end loaders, motor graders, bulldozers and AtlasCopco, Sandvik blast hole drill machines.

Processing plant

Foundation concrete works for the processing plant started in 2012. The processing plant shall have the capacity of 14.6 million TPA sulphide ores, and produce 316,000 TPA copper concentrates and 4,400 TPA molybdenum concentrates. The plant is scheduled to commission by July 2015.

tss

1. FLOTATION
2. TAILING THICKENER
3. FILTRATION
4. MINE WORKSHOP
5. MILLING

6. CONCENTRATOR WORKSHOP
7. ORE STOCKPILE
8. PRIMARY CRUSHER
9. OPEN PIT MINE

Facilities completed at the Project construction site

-Accommodation with required utilities (laundry, shower etc.)
-Play room and fitness
-Kitchen with capacity of 1000 persons and cafeteria to serve 300 people,
-Office and medical facility
-Potable water treatment facility,
-Sewage and treatment facility,
-Ready mix batch plant,
-Fuel storage and station,
-Mechanical workshop for mining equipment,
-Gravel handling shop,
-Laboratory,
-Civil and foundation works for Primary Crusher, ROM pad, 220/22 kV substation and flotation workshop.

Environmental compliance work and reporting

-Environmental baseline study,
-Environmental, social and economic impact assessment and study of the Project prepared in accordance with the Law on Environmental Assessment of Mongolia, instructions and requirements for the detailed assessment and general evaluation by the Ministry of Environment of Mongolia, and other requirements of the World Bank and EBRD.
-Archaeological survey, and archaeological research through the Project site,
-Paleontological survey of the site,
-Environmental and Health Management Plan,
-Weather survey station “Campbell UT30” installed at the Project site,
-Tree plantation (over 10,000 trees planted)

Project nameplate specifications:

– Copper ore grade – 0.6%
– Molybdenum ore grade – 0.024%
– Copper grade in concentrate – 25.6%
– Molybdenum grade in concentrate – 51.8%
– Copper recovery – 92%
– Molybdenum recovery – 65%

Safety actions and plans achieved

-Safety control and safety training at the project site,
-Action plan to transport workers to the project site.
-Safety management action plan during construction period,
-Environmental management plan,
-R3 management plan for accident mitigation and sustainable operation,
-Fatality mitigation plan during accident.