Severstal Resources takes control of Balazhal Gold Mine in Kazakhstan

Severstal Resources, the mining division of Severstal, has taken control of Balazhal, a gold mine in East Kazakhstan, 260 km south of Semipalatinsk. The purchase of 100% of the asset was made through one of Severstal’s subsidiaries.

The recoverable reserves in Balazhal are estimated at up to 20 metric tonnes of gold, and the mine has a resource potential of up to 30-40 tn. The mine and heap leaching plants were built on the deposit in 2004. Mining operations were suspended due to financial difficulties in 2006.

Severstal Resources plans to resume production by 2009 and to raise output to 1.5-2 tn of gold a year within 2-3 years. Both potential heap leaching and gold concentrate production are being considered. In the latter case the concentrate will be processed using the BIOX technology at the Suzdal site, another Severstal Resources operation in Kazakhstan.

Commenting on the transaction, Nikolay Zelensky, head of the Severstal Resources gold business segment said, “Balazhal is an attractive asset which allows us to quickly restore the existing production facilities. Buying this asset is a further step to strengthening Severstal’s gold mining business in Kazakhstan, which we consider to be a strategic region.”