Project Overview

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Deposit

Udokan copper deposit with resources of more than 26 mn tons of copper is the largest in Russia and one of the largest copper deposits in the world. The deposit is located in Kalar District of Zabaikalye Region, 30 km away from Novaya Chara railway station of Baikal-Amur Mainline.

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Video presentation of Udokan deposit, SRK Consulting

Geology and ore body

Udokan deposit is a stratiform copper deposit embedded in metamorphosed sedimentary rocks. Copper mineralization is confined to quartz-carbonate sandstone of Lower-Proterozoic Upper Subsuite of Sakukan Formation.

Ore body outcrops

Copper mineralization makes up a continuous stratiform horizon formed into a synclinal fold together with the host rocks. The fold`s length is 9 km, its width is from 2.8 to 4 km. Mineralization is represented by oxide and sulphide minerals complexly alternated in the ore mass. The ores are mixed all over the deposit. There are higher concentrations of oxide ores near the surface along fissures and faults.

Resource base

BMC LLC has performed a considerable scope of work related to resource base confirmation and update since obtaining the license.

Exploratory well core in BMC LLC core storage

While honouring the license commitments, activities on geological and economic survey of the deposit were completed. In the course of geological exploration program of 2010-2014 about 75,000 m of geological, geomechanical and hydrogeological boreholes were drilled, approximately 1,240 m of confirmatory trenches were sampled and about 2,500 m of underground workings were resampled. As a result, more than 18,000 channel and core samples were taken for analysis.

The resource base of the deposit was updated as geological exploration works advanced. As of March 2014, JORC-compliant Mineral Resources amounted to:

Resource
class
Ore
(Mt)

Copper
grade,
%
Silver 
grade, 
g/t
Contained 
copper 
(Mt)
Contained 
silver           
(Moz)
Measured 339 1.03 8.9 3.5 97
Indicated 1483 1.01 11.1 14.9 531
Measured +
Indicated
1822 1.01 10.7 18.4 628
Inferred 932 0,89 14,3 8.3 428
Total 2754 0.97 11.9 26.7 1056

As of April 2014, JORC-compliant Ore Reserves of Udokan copper deposit equated to:

Ore          
Reserves
Ore
(Mt)
Copper 
grade, 
%
Silver  
grade,  
g/t
Contained  
copper  
(Mt)
Contained  
silver           
(Moz)
Proven 292 1.04 8.9 3.1 83.4
Probable 1,147.5 1.05 11.2 12.0 414.3
Total 1,439.5 1.05 10.8 15.1 497.7

History of the deposit

Udokan copper deposit was discovered by Forest Expedition of the chief directorate of the Ministry of Geology of the USSR in 1949 and afterwards became the subject matter for Udokan exploration team.

View from Udokan Ridge

Deposit reserves were estimated and for the first time submitted for approval to GKZ (State Reserves Committee) of the USSR in 1960. In 1961-1966 detailed exploration was performed and economic copper reserves approved. In 1966-1974 extensive geological exploration works were carried out at prospective areas in close proximity to Udokan deposit, industrial sites for the facilities of the future mining and processing plant were checked for barren ground and ground water deposits were explored for the plant`s water supply.

In 1975-1990 integrated geological exploration works were conducted in the context of BAM construction, and as a result economic copper reserves were increased. Giprotsvetmet and Zabaikalye Construction Engineering Studies Trust (ZabTICIZ) design institutes elaborated a general mining plan, and sites for the camp, tailings storage and other facilities were selected.

In 1992 an international tender for the right to develop Udokan copper deposit was held. The tender was won by Udokan Mining Company (UMC), which prepared a Feasibility Study for the construction of Udokan mining and processing plant. The project was not implemented, however.

At the end of 1999 Zabaykalskaya Mining Company obtained a license for further appraisal of Udokan copper deposit for 5 years.

In 2006 a pilot plant was built, which was used for semi-industrial processing of ore samples taken at the deposit.

The license for subsoil use for mining of copper and associated minerals in Udokan deposit was obtained by OJSC Mikhaylovsky GOK according to tender results in 2008.

In 2010 the license was re-issued to BMC LLC which is the operator of Udokan copper deposit development Project and a subsidiary of METALLOINVEST Group.

In February 2014 Fluor (major international engineering company in M&M design area) with the participation of SRK Consulting and Knight Piesold completed development of the International Feasibility Study for Udokan copper deposit development Project.

Blast hole drilling at pilot-scale
sampling area, 2013, contractor – Sosnovgeo

Geotechnical studies were performed at the deposit in order to select the optimal location for the facilities of the future mining-metallurgical complex. Concurrently major design solutions and project costs were optimized.

Currently the Process Procedures and TEO-Konditsy are being prepared. Engineering design for the deposit`s development was developed based on the approved reserves and updated conditions.

Project execution dates conform to the milestones set in the license for the right of subsoil use:

2018

Approval and validation in the prescribed manner of the engineering design for development of Udokan copper deposit;

2019

Start of construction of the infrastructure facilities for the mining operations;

2021

Start of commercial mining;

2023

Achieving the full design capacity.

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