- Highland Gold Mining said a scoping study has confirmed the economic potential of the Unkurtash project in Kyrgyzstan.

The Unkurtash licence area covers three deposits - Unkurtash, Karatube and Sarytube - with previously-published JORC-compliant mineral resources (measured, indicated and inferred) of 3.5 Moz of gold at 1.82 g/t (IMC Montan, 2013).

Highland said the project was situated in an area that already featured operating mines and had access to paved roads, power and water supply.

Highlights of the study, compiled together with consultant SRK, include:

- 18-year life of mine with annual production of ~133k ounces.

- NPV of US$ 200 M at a 10% discount rate, and an IRR of ~19% assuming a long-term gold price of US$ 1,200/oz.

- Estimated average operating costs of $616/oz.

- Mining plan envisioning two open pits of similar size.

- Processing plant utilising gravity concentration and gravity tailings CIL with an annual throughput of 4 million tonnes and recoveries of over 80%.

- Capital expenditures for project development pegged at US$ 322 million.

Highland Gold acquired 100% of Unkurtash from Barrick Gold in 2006 and has since spent US$38m on extensive exploration of the site.

Local-standard (GKZ) reserve estimates and a local-format pre-feasibility study have already been submitted to and approved by Kyrgyz regulators.

The company said it was considering various alternatives for proceeding with the project, including partnering with another strategic investor to co-develop Unkurtash.

At 8:14am: [LON:HGM] Highland Gold Mining Ltd share price was -0.37p at 181.88p

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