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GV Gold completes the transaction on acquisition of the controlling equity stake in the Krasny project

GV Gold (Vysochaishy, OJSC) completed the transaction on acquisition of the controlling equity stake in the project on development of the Krasny deposit located in the Irkutsk Region. The transaction amount made USD 7 mln., of which USD 6 mln. will be spent on the exploration operations, and USD 1 mln. will be used to cover existing debts of the project.

The deposit exploration operations have already started and within the following 12 months Krasnoye, LLC, at the expense of the shareholders’ capital, plans to complete the infill exploration and drill about 15 thous. m to get not less than 10 t of commercial gold reserves at the first stage. Following the results of this stage, a decision pertaining to commercial development of the asset and construction of the processing facilities will be taken.

As at March 2013, the total resources of the Krasny deposit are estimated at 43 t (1.37 Moz) of gold of the Indicated and Inferred categories. The asset has even more significant exploration potential and further exploration allows us to count on identification of even larger reserves.

Acting facilities of GV Gold are located only 70 km away from the Krasny deposit, and GV Gold counts on the possibility of accelerated engagement of new deposits into commercial development with the gold output of about 2 t p.a.

Sergey Vasilyev, CEO of the Company, noted: “Alongside with Ugakhan, Marakan and Khomolkho ore clusters, this is the 4th ore cluster in the Russia’s largest Lena gold-bearing province, where we successfully carry out commercial development of the assets. Consistent expansion of our capacities here allows us, on the one hand, to restrain the growth of costs at the expense of reduction of the unit administrative costs, and, on the other hand, utilize the existing infrastructural capacities, productive and labour resources.”