Aurum Mining plc joined the AIM market of the London Stock Exchange in May 2004 with the strategy of acquiring gold projects in the Former Soviet Union (FSU). The Company's management and consultancy team - which brings together formidable experience of mining, the FSU and financial markets - has consistently delivered on its strategy with the result that the Company is on the point of transformation from exploration to production.

The Andash Project

Aurum acquired the licence to the Andash exploration area in northern Kyrgyz in January 2005 and has since advanced Zone 1 to a Proven and Probable reserve of 1.1 million ozs of gold and gold equivalent in copper. The licence area, which extends to 53 sq km, includes a further two ore bodies and five exploration zones, offering a substantial opportunity to increase the Andash Project's resource base and to maximise the mine life and cost efficiency of the proposed mine at Andash Zone 1. Aurum received a Mining Licence for Zone 1 from the Kyrgyz authorities in 2006 and also completed a fully bankable feasibility study, led by Wardell Armstrong International. Zone 1 has a JORC compliant P&P resource of 16Mt of ore at a grade of 1.05g/t and 0.4% copper, giving a gold equivalent of 1.1 million ozs.

Next steps

Detail design work for the construction of the open-cast mine at Zone 1, at an estimated capital cost of $48.5 million, has commenced following the successful raising of project finance through a £30m placing in February this year. Initial production is expected in the second half of next year with output rates of 2Mt pa from 2009, establishing Aurum as a low-cost producer with significant additional exploration opportunities within the Andash licence area.

The Andash project also includes the Zone 2 and Zone 3 along with Tokhonysay, Nahodka and three other additional exploration areas. An exploration programme to establish more understanding of the additional opportunity is scheduled for the summer period.