Kubaka: Arctic Mining Challenge In Russia

Not since 1917 has a foreign company developed a standalone, grass roots gold mine in Russia. With Russia's political changes of the late 1980s, development of mineral prospects once again beckons foreign investors. Cyprus Amax's interest in Russia began before the mid-1991 breakup of the former Soviet Union. In 1990, Cyprus Amax began searching for such an opportunity. Early this year, production will begin at the Kubaka gold project located in the Russian Far East, near the Arctic Circle. The Kubaka project is a 1.75-kt/d (1,930-stpd) open-pit operation that will produce more than 9.3 t/a (300,000 oz/year) of gold. Identifying Russian mining opportunities In late 1990, the first Cyprus Amax people travelled to Russia. The trip was to determine the potential for western firms to develop profitable mines. This encouraging visit suggested that Cyprus Amax focus on the Russian Far East with its mineral riches and its easier access to the United States. The company's initial efforts thus focused on working with the Soviet Union's Northeast Geologic Expedition, the then government agency for exploration and geology in Russia's Far East. After the breakup of the Soviet Union, Cyprus Amax continued working with the same people, but they now represented new independent, nongovernmental entities. For three years, Cyprus Amax investigated numerous deposits. This resulted in the identification of two properties of significant interest, one of which was Kubaka. Location Kubaka is located in the Northern Evensk District of the Magadan Oblast in the Russian Far East. This is an area east of Siberia. The project is situated in a mountainous area of the Kolyma Range, about 300 km (985 miles) south of the Arctic Circle. It is 285 km (180 miles) north of the fishing village of Evensk and 380 km (235 miles) northeast of the silver-mining town Omsukchan. The site is 950 km (590 miles) northeast of the regional capital city of Magadan. Magadan, the political and economic center of the Oblast, has a population of about 150,000 people. It is served by a year-round deep-water port (with icebreaker assist) and an international airport with service to Moscow and Anchorage, AK. Access to the Magadan region