**Tender on Acquiring Licenses For the Right to ExploitDeposits of Gold In Russia’s Irkutsk Region**

** **

February 2, 2000

 

Prepared by Azim Mamanov, BISNIS representative inNovosibirsk

 

Tender on Acquiring Licenses For the Right to ExploitDeposits of Gold In Irkutsk Region.

Prepared by Azim Mamanov, BISNIS representative inNovosibirsk Irkutsk region is rich with natural resources, such as oil, gas,and gold. Irkutsk region is the third largest in Russia in terms of the amountof gold extracted. Eleven tons of gold is being mined annually in the region.In 1999, 12 tons of gold was mined, which the best result for the region since1915. Over 94 percent of gold was mined in the Bodaibinsky district. However,the local authorities have been attempting to develop gold deposits in otherdistricts.

 

Irkutsk Regional Administration and Natural ResourcesManagement Committee announce tender on acquiring licenses for the right toexploit deposits of gold. Even though only Russian legal entities may acquirethe licenses, those American companies involved in the mining industry andoperating in Russia, might be interested in participating in the tender throughtheir Russian partners or subsidiaries. Note: All the prices indicated below are in Rubles. Exchange rate isUS$1=28.54 RUR as of January 28, 2000.

 

LOCATION OF NATURAL DEPOSIT #1: Ungura River, OlkhonskyDistrict

   1.. Amount and Category of Resources: P3-20;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 10 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-Time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.2 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.9 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

LOCATION OF NATURAL DEPOSIT #2: Takhtykan-Berikan River(upper reaches), Bodaibinsky District

   1.. Amount and Category of Resources: C1-40, P1-20;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 15 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-Time Payment: 30 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.4 percent

   b.. For exploring: 3.4 percent

   c.. For mining: 2.8 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

LOCATION OF NATURAL DEPOSIT #3: Kabritsky River,Bodaibinsky District

   1.. Amount and Category of Resources: P3-60;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 15 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-Time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.2 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.7 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

LOCATION OF NATURAL DEPOSIT #4: Bolshoi Barakun River(middle reaches), Bodaibinsky District

   1.. Amount and Category of Resources: P1-70, P2-48, P3-40

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 20 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-Time Payment: 20 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.0 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.6 percent

G) Cost of Geological Information On The Deposit: 9,626RUR

LOCATION OF NATURAL DEPOSIT #5: Akanak-Nakatami River(upper reaches), Bodaibinsky District

   1.. Amount and Category of Resources: P3-1400;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 100 kg;

   4.. Fee For Participating in Tender and Issuing License: 13,891 RUR;

   5.. Starting One-Time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.2 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.8 percent

G) Cost of Geological Information On The Deposit: 9,626RUR

LOCATION OF NATURAL DEPOSIT #6: Murkhoi River,Nizhneudinsky District

   1.. Amount and Category of Resources: P3-720;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 70 kg;

   4.. Fee For Participating in Tender and Issuing License: 13,891 RUR;

   5.. Starting One-Time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.0 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.7 percent

G) Cost of Geological Information On The Deposit: 9,626RUR

LOCATION OF NATURAL DEPOSIT #7: Maly Isselei River,Nizhneudinsky District

   1.. Amount and Category of Resources: P2-27, P3-35;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 15 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-time Payment: 15 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.0 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.6 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

LOCATION OF NATURAL DEPOSIT #8: Bolshoi Isselei River,Nizhneudinsky District

   1.. Amount and Category of Resources: P2-60, P3-70;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 20 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-time Payment: 15 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.0 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.6 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

LOCATION OF NATURAL DEPOSIT #9: Chanchur River (upperreaches), Kachugsky District

   1.. Amount and Category of Resources: P3-80;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 15 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.2 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.9 percent

   1.. Cost of Geological Information On The Deposit: 5,164 RUR

LOCATION OF NATURAL DEPOSIT #10: Chanchur River(location Bezymyanny), Kachugsky District

   1.. Amount and Category of Resources: P3-28;

   2.. License Type: Geological Investigation and Mining;

   3.. Average Annual Amount of Gold To Be Mined (no less than): 10 kg;

   4.. Fee For Participating in Tender and Issuing License: 9,265 RUR;

   5.. Starting One-time Payment: 10 percent from a regular paymentcalculated based on annual anticipated amount of gold mined;

   6.. Starting Regular Payments:

   a.. For searching: 1.2 percent

   b.. For exploring: 3.0 percent

   c.. For mining: 2.9 percent

G) Cost of Geological Information On The Deposit: 5,164RUR

Main Requirements For Participating In The Tender:

   1.. Applicants to the tender must be Russian legal entities;

   2.. Applicants must be technically equipped, have sufficient financesand qualified staff to be able to investigate deposits and conduct mining workaccording to the tender*s conditions;

   3.. Mining works should be started no later than II quarter of 2001;

   4.. Licenses will be granted for 25 years;

   5.. After purchasing Geological Information, an applicant must develop awork plan for a deposit, containing calculations of technical and economicindicators. Deadline for submitting the work plan: April 6, 2000;

   6.. An applicant must provide copies of documents that permit conductingactivities related to exploration of natural resources;

   7.. Tender will be conducted in the building of the RegionalAdministration, office 138

   8.. Applications must be submitted at the following address: 

   Natural Resources Management Committee of the Irkutsk Oblast,

   7 Kievskaya St.,

   Irkutsk, Russia 664003

   Phone: 7-3952-335075

   9.. Deadline for submitting applications: March 14, 2000;

For further details on the tender, please contact:

Mr. Vladimir Sklyarov, head of the Natural ResourcesManagement Committee of the Irkutsk Oblast,

7 Kievskaya St.,

Irkutsk, Russia 664003

Phone: 7-3952-335075

Fax: 7-3952-276760