Mastering of iron ore Solongo deposit

General details of the project

  • Initiator of the project: Fund for Regional Development of the Republic of Buryatia
  • Сontact person: Botoev Konstantin
  • Post: Project manager in mineral resources sector
  • Telephone/Fax: +7 301 2 21-11-49, +7 301 2 21-11-50, +7 301 2 21-11-51
  • E-mail: info@frr-rb.ru
  • Address of the site: Republic of Buryatia, Eravninskiy District

Basic details of the project

The deposit is located in the south of Vitimskoe highland in Eravninskiy ore district of Buryatia, 4.5 km to the south-west of the Ozernoe deposit. It is located in the Central, the most raised unit of Ozerninsky ore cluster and is confined to the steep eastern contact of the dome intrusion of granite submeridional extension and presented by skarn-ore tabular fields, laying on the eastern wing of a large anticline wrinkle of lower Cambrian sedimentary-volcanic rocks of southeastern fall.

The structure of the deposit is complex, it is divided into blocks of different sizes and vertical capacity (1.5 - 2.5 km) by numerous faults, the rocks are intensive ragged and crushed. There is a forest road to the deposit, requiring reconstruction. According to the complexity of the geological structure the deposit belongs to group III Classification SRC RF.

The deposit was discovered in 1961 as a magnetite deposit with ore reserves of 37.2 million tons. Later on it was carried out a wide range of detailed geophysical researches and intense anomalies were revealed. In 1970 - 75 was carried out preliminary exploration of the deposit.

By technological studies of washability of ore complex is set the principle possibility of magnetic-flotation enrichment to receive 64%-th iron concentrates at extraction 94.75 and 43.4%-th zinc concentrates at extraction - 52.4%. For boric ores is developed a method of neutron-absorbing separation to yield boric concentrates at extraction B2O3 from 82.5 to 98.9%. Estimation of reserves is carried out for 8 iron-ore, 11 boric, 2 molybdenum and 10 zinc bodies at cut-off iron grade of 20%, the minimum industry - 25%. The reserves of iron ores by categories C1 + C2 amount to 117.8 million tons of ore with an average iron content - 39.32%, including 55.2 million tons for open processing.

The reserves of zinc in the magnetite ores of C2 category amount to 202 thousand tons at an average grade of 4.93%. The reserves of zinc in sphalerite ores amount to: ore - 3.13 million tons, zinc - 205.7 thousand tons at an average grade of 6.57%. Boric ores are calculated at cut-off iron grade of B2O3 - 1.0%. Ore reserves amount to - 6.6 million tons at an average grade of B2O3 - 6.28%, including rich ores - 1.0 million tons at an average grade of В2О3– 15,91%.

According to mine technical conditions and parameters of ore bodies the Solongo deposit can be worked out by open method (two quarries) to a depth of 300 m. With an annual capacity of 3.0 million tons of ore, at an average stripping ratio of 1.9 m3 / tons can be provided the annual output of concentrates of: iron (68% Fe) - 1585 thousand tons, zinc (23% Zn) - 16,6 thousand tons, boric (57% B2O3) - 35.6 thousand tons.

Enterprise construction period - 3 years. Putting into operation of quarries is planned in 2 years after the construction start. The yield on a full capacity is planned in 5 years after the beginning of deposit.

Specific production costs for mining and processing of 1 ton of ore (in view of the projected capacities, deflator index of reduction of spending values to value of 2011 and general running costs) amount to 1120 rubles (adopted by analogy with the Teiskiy branch of OJSC "Evrazruda" (production - 399 rubles / t.) and Krasnokamenskiy mine group (enrichment -. 532 rubles / t.)).

The price of iron ore concentrate (according Metalltorg) is adopted at the level of 3.3 thousand rub. / t. The price of zinc concentrate is adopted at the level of 8.02 thousand rub. / t. based on the average cost of zinc on the London Metal Exchange on the date of the calculation and the metal content of the commercial product. The price of boric concentrate (according to JSC "Mining and Chemical Complex " BOR ") is adopted at the level of 21.46 thousand rub. / t.

The main technical and economic indicators and the results of the valuation of this deposit are shown in Table.

Technical and economic indicators of the Solongo deposit

Data

Units ofmeasure

Version

Basic

IRR 20%

Geological ore reserves for open processing

million tons

55,2

55,2

Mineral content in geological ore reserves:

 

 

 

- iron

%

39,3

39,3

- zinc

%

0,41

0,41

- В2О3

%

0,75

0,75

Losses by the ore mining

%

4,0

4,0

Ore dilution by the mining

%

4,0

4,0

Operational ore reserves

million tons

55,2

55,2

The content of useful components in operational reserves:

 

 

 

- iron

%

37,8

37,8

- zinc

%

0,39

0,39

- В2О3

%

0,72

0,72

Production enterprise capacity for ore mining

ths. tons / year

3 000

3 000

Period of provision of operational reserves for enterprise

year

18,4

18,4

Period construction

year

3

3

Period calculation

year

20

20

Commercial production enterprise in volume terms:

 

 

 

- iron ore concentrate

ths. tons

22 982

22 982

- zinc concentrate

ths. tons

241

241

- boric concentrate

ths. tons

516

516

Prices of commercial products:

 

 

 

- iron ore concentrate

ths. rub. / t.

3,30

3,98

- zinc concentrate

ths. rub. / t.

8,02

9,63

- boric concentrate

ths. rub. / t.

21,46

25,65

Cost of commercial production (total)

million rub.

88 850

107 029

including iron ore concentrate

million rub.

75 842

91 470

- zinc concentrate

million rub.

1 930

2 318

- boric concentrate

million rub.

11 078

13 241

Сapital investments

million rub.

9 450

9 450

Operational costs

million rub.

62 574

63 474

Specific production costs per ton of ore

rub. / t.

1 120

1 120

Tax revenues

million rub.

16 156

20 512

Net present value (NPV)

million rub.

2 172

6 931

Profitability index (PI)

units

1,3

1,9

Capital investments payback period

year

15,4

10,6

Internal rate of return

%

13,9

20,0

Discounted revenue

million rub.

30 765

37 059

State NPV

million rub.

4 611

4 925

The fraction of state NPV in the discounted revenue

%

15,0

13,3

The value of differential rent

million rub.

2 925

8 873

The value of absolute rent (MET)

million rub.

4 404

5 304

The value of mining rent

million rub.

7 329

14 177

The fraction of mining rent in the recoverable value

%

23,8

38,3

Cadastral value - return of the deposit

 

million rub.

9 061

15 635

 

Explanatory note

The Fund for Regional Development of the Republic of Buryatia is an organization authorized by the Government of the Republic of Buryatia in the field of application of government investment policy seeking to attract investments to the economy of the Republic, create favorable conditions for investors and business, and reduce the administrative barriers.

To create favorable conditions for investors the RB RDF provides support of investment project in the "One window" format, in other words provides for an investor the solution to all issues of cooperation with organizations, authorities and departments ranging from the processing of documents for a land and ending with the issuance of a building permission