Investing in Gold Mining

The Cryptounit Global Investment Portfolio's gold mining project involves the Urals Gold ore assets situated in the Sverdlovsk region of the Russian Federation.

Gold mining in Sverdlovsk

"Urals Gold" Project - Key Facts for Investing in Gold Mining

The results of the geological exploration work indicate a significant presence of gold resources in 16 licensed subsoil areas, classified as P1 + P2 and totaling 880 tonnes of pure gold. Part of these resources has passed approbation and geological expertise based on completed feasibility studies and reserve calculations, and are in the process of being added to the balance sheet as C1 + C2 reserves for the 16 licensed ore gold areas.

The ore has a weighted average gold grade of 2.5 g/t and contains rich ore blocks with a content of 3-4 g/t, which is significantly higher than the global average for gold deposits of 1-2 g/t. The subsoil plots are located in the Sverdlovsk region of the Urals, which has significant potential for exploration and development of deposits:

• During the first stage of mining, the ore is extracted with minimal overburden and without drilling and blasting operations.
• The absence of refractory ores allows for the use of traditional low-cost technologies for gold extraction.
• Additionally, the temperate climate allows for year-round gold mining operations.

The licensed areas are situated in close proximity to several settlements, with a well-developed transport infrastructure nearby. This infrastructure includes highways, railway stations located 1.5 to 155 km away, and the Koltsovo airport situated 60 km south of the area. Additionally, power lines cross the licensed areas. The location of these areas is also within the existing infrastructure for gold ore processing.

Golden Urals

The Urals region has a rich history of gold mining, with the first gold mines being established in the early 18th century during the reign of Peter the Great. Over the centuries, the Urals have become one of the most significant gold-producing regions in the world, with many large-scale mining operations active in the area.

One of the most notable gold mines in the Urals is the Berezovsky mine, which began operation in the early 18th century and is still operational today. The mine is located near the city of Yekaterinburg and has produced over 100 tonnes of gold over the course of its history.

The gold extraction process in the Urals typically involves open-pit mining, underground mining, or a combination of both. Open-pit mining is the most common method and involves removing the top layer of soil and rock to access the gold ore. The extracted ore is then processed through a series of crushing, grinding, and chemical treatment stages to separate the gold from other minerals.

Underground mining is also used in the Urals, particularly in areas where the gold deposits are too deep to be accessed by open-pit mining. In underground mining, miners excavate tunnels to reach the gold ore, and the extracted ore is processed in the same way as with open-pit mining.

The gold extraction process in the Urals has undergone significant technological advancements over the years, with the introduction of modern equipment and machinery to improve efficiency and safety. The use of cyanide in the gold extraction process is also widespread in the Urals, despite concerns about its impact on the environment.

Despite the economic benefits of gold mining in the Urals, there have been concerns about the environmental impact of mining activities. Mining operations can result in the contamination of soil and water resources, which can have long-term effects on the ecosystem and the health of the local population.

To mitigate the environmental impact of gold mining in the Urals, mining companies have implemented various measures, such as reforestation programs, land restoration initiatives, and monitoring programs to track and minimize the impact of mining activities on the environment.

The Sverdlovsk Region

The Sverdlovsk region in Russia is a significant gold mining hub, with several large-scale mining operations active in the area. Gold mining in Sverdlovsk dates back to the 18th century, and the region has been a major contributor to Russia's gold production.

One of the most significant gold mines in Sverdlovsk is the Kupol mine, which is located in the Chukotka Autonomous Okrug in the Russian Far East. The Kupol mine is an underground mine that produces both gold and silver, with estimated reserves of over 6 million ounces of gold and 67 million ounces of silver.

Another notable gold mine in Sverdlovsk is the Mayskoye mine, which is an underground mine that produces gold and silver, with estimated reserves of over 9 million ounces of gold and 98 million ounces of silver.

"Urals Gold" Project - Investing in Gold Mining has Several Advantages

The reliability of available geological information is determined by the fact that deposits and gold mining were studied in most of the subsoil areas during the 20-30s. The study was suspended when the content of 20 grams of gold per tonne of ore was reached. Currently, the Department for Subsoil Use of the Ministry of Natural Resources and Environment of the Russian Federation has confirmed the resources and technical and economic parameters of production.

The subsoil plots are located in close proximity to transport, energy infrastructure, power transmission lines, housing and communal services, and settlements. This proximity eliminates dependence on the development of regional infrastructure. Additionally, the project includes cost optimization for infrastructure construction and operation through the construction of a modular gold recovery plant.

The Cost of an Operating Business for the Development of Gold Deposits

According to the Income Approach (Discounted Cash Flow Method), the investment value of the operating business was calculated to be $593 million as of December 31, 2019. 

This value has been confirmed by Ernst & Young based on data from the Institute of Mining of the Ural Branch of the Russian Academy of Sciences and the Department of Subsoil Use for the Ural Federal District (Uralnedra) of the Federal Agency for Subsoil Use of the Ministry of Natural Resources and Environment of the Russian Federation.

Note: To access the report on investing in gold mining, which contains a description of the assessment of the investment value of the operating business for the development of gold deposits, it is necessary to sign the Letter on non-disclosure of information to third parties.