Alhambra Resources Live @ PDAC
Alhambra Resources Live @ PDAC
Alhambra Resources Live @ PDAC
Resource Intelligence Interviews Alhambra Resources' Ihor Wasylkiw
Click here to watch video:http://www.resourceintelligence.net/alhambra-resources-ltd-interviewpdac/16537
See the company's profileHERE, including resource calculators, charts, news and more.
RI: Ihor Wasylkiw, first tell us what is going on with Alhambra's Kazakh projects? You've got three major projects with news coming, haven't you?
IW: First of all, what I want all investors to understand is that Alhambra is a gold production and exploration company focused on Kazakhstan. What is exciting about Alhambra is the license areas that we have. It is a very large license of 2.7 million acres, and on that license area we have over 100 gold targets. Of those 100 gold targets we have focused on seven and of those seven targets three are what we call "advanced exploration plays".
One of those three, called the Uzboy gold deposit, is where we are actually producing gold via an open pit heap leach mine. What happened in 2010 is that we re-initiated an aggressive drilling program where we focused on these seven projects and we did a lot of drilling and currently we are waiting on 11,000 core samples that have yet to be analyzed from these areas.
RI: Uzboy is a producing project and you are right now producing from your oxide portion of this project, but there is also a very significant sulfide portion.
IW: Yes there is. Our independent consultants have done a NI 43-101 compliant resource report and while it is dated, the numbers that they came up with of measured and indicated resource is about 1 million ounces and our inferred resource is around half a million ounces. Right now the production that we are realizing is from the oxide and we're doing that via open pit heap leach mine. The concept is that to develop the sulfide we're going to have to build a new facility, a grind floatation type facility, which could see our production increased significantly from our current rates.
RI: I think that's an interesting project and I would assume that it's adding a lot to your share price right now but you say that Shirotnaia and your other Dombraly project are exceptionally important as well?
IW: It is. One thing I would like to say is that even though we've got some interesting numbers in terms of production and resources from our one little area where we're producing gold, we're really significantly undervalued and the market isn't realizing the value there.
For example, our current scoping study which is being updated says that at a gold price of $850 US per ounce based on different operating scenarios that the value of our current Uzboy gold deposit only is anywhere from $90 million to $203 million. Right now the market capitalization of our company is roughly $100 million. Given sensitivity analysis, what we calculated internally is that a 10 percent increase in the price of gold will impact our net present value by approximately 27 percent. At current prices that could be a significant uplift in the NPV of our company. And that is only one property that is less than two percent of our total land space.
RI: At 2.7 million acres, you've explored less than 1 percent of this, but you know that there is mineralization here and there are other operating mines, tell us about that.
IW: We're at the right place at the right time. Our land license is in north-central Kazakhstan and is in a well-known gold belt. Surrounding us are multi-million ounce gold deposits. Immediately to the west of us is a 12 million ounce gold deposit and to the south of us is another massive gold deposit around the same size and we're smack dab in the middle. We're excited about where we are and the future upside opportunity.
RI: You talked about the 100 targets that you have and the seven that you boiled it down to now and the three main ones. Shirotnaia is one of the three main targets that you have. Looking at the press releases from it your results have been fantastic with high grades, let's talk about that.
IW: Shirotnaia is located on the southern border of our license area. It's adjacent to a world-class multi-million ounce gold deposit. We're excited about Shirotnaia for many reasons. First and foremost is the huge target size of this project. Right now, based on the geophysical work and the drilling that we've done to date our target is roughly 10 km by 2 km, which is huge. The other thing that is exciting is that every drill program that we've conducted, the assay results that we've been able to press release have shown some very exciting gold intercepts and we've been successfully announcing new gold discoveries. As a matter of fact, just recently as a result of the partial results of our 2010 drilling program we were able to announce two new high-grade gold discoveries made at Shirotnaia.
RI: Uzboy is an exciting project, you're producing and growing there. Shirotnaia is an exciting project and possibly more exciting but not producing yet. How do you explain to investors that this is of real great interest and when are you going to have a resource estimate to show people the potential of this?
IW: From the 2010 drilling program, we still have approximately 11,000 drill samples that have not been assayed. That is in the process right now. A good chunk of those samples are from Shirotnaia. The simple process is this, when we get the assay results back we will have those interpreted and we will press release those results and we are expecting that in the same vein as the previous core samples that have been assayed and news released that we're going to get some additional exciting new information.
RI: You have the Dombraly project, which is a past producing mine with a significant amount of resource remaining, what's happening there?
IW: Dombraly is also located on the eastern flank of our license area north of Shirotnaia. Back in the 1980s Dombraly was mined by a local Kazakh commune of miners. What's exciting about it is that the gold grade that they had produced the mine to was a very high grade that resulted in a few things, it resulted in a waste pile that was very rich and we have an oxide pile there that grades 1.52 g/t and from follow-up drilling that we've done we have come up with some very wonderful intercepts of anywhere from 4 to 6 g/t over 20 to 30 metres. Our objective has been to conduct an aggressive drilling program in 2010 to allow our consultants to generate a first 43-101 for our Dombraly project. We've had an exploration target of 5 to 7 million tonnes grading 1.4 to 1.8 g/t and roughly speaking a quarter of a million ounces to just under half a million ounces.
RI: A lot of investors in North America and possibly Europe as well might not know or understand the nature of Kazakhstan and how it is governed and if it is a tax friendly and mining friendly jurisdiction?
IW: Kazakhstan is a pro-mining country. For those investors who aren't familiar with Kazakhstan, it has been a sovereign nation now for 20 years and they are very resource rich, such as oil, gas, gold and the list goes on. As a result of that and as a result of their very low population which is just over 16 million people, they have looked to the foreign investor to bring not only their technical expertise but also capital to help the country of Kazakhstan develop that resource base.
RI: Have you had to do some permitting yet and what is the process like?
IW: Our original license area of which we are able to both explore and produce was for a 25 year period, plus we have the right to extend for two 10 year extensions. In total 45 years.
RI: Take us through some of the milestones that investors can look forward to this year and beyond?
IW: This year what investors will be seeing are a lot of news releases related to the results of our 2010 drilling. They should be continuous over the next number of months. We will have an updated resource report for our producing gold mine at Uzboy and we will also have an updated preliminary economic assessment. In the second half of the year what investors will be seeing is a new 43-101 for Shirotnaia and a new 43-101 report for Dombraly.
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