Krasny is Kopy Goldfields’ most advanced gold project to date and consists of three licenses – the Krasny bedrock license, the Krasny alluvial license and the neighboring Batiy bedrock license. Exploration activities have been performed at the site since 2010, when the project was acquired from the Russian state through a competitive public auction. In 2014, a joint venture agreement was signed with the Russian gold producer GV Gold, to develop the promising gold deposit together. The project is currently in the prefeasibility stage, in preparation of starting the Krasny gold mine.

Located in the vast expanse of the Patom Highland in the Bodaibo area of Irkutsk region of Russia and 75 kilometres from the city of Bodaibo, the Krasny project sits on a license area of totally 117 square kilometres. The area is known for its alluvial gold production with four active placers within, or neighbouring, the license area.


Acquired: 2010

Mineral reserves according to JORC: Probable: 257koz@1.09 g/t. Signed by Micon 2018

Mineral resources according to JORC:
Krasny: Indicated: 291 koz@1.2
0 g/t.
Inferred: 1 202 koz@2.02 g/t
Vostochny: Inferred 339koz@1.57 g/t.
Signed by Micon 2018

Mineral resources according to GKZ: C2: 314 koz, P1: 233 koz

Valid until: 2035

Ownership Kopy Goldfields AB: 49 %

License area: 31+86 sq km 

Kopy Goldfield’s Krasny license is valid for 25 years and provides rights for bedrock gold prospecting, exploration and production. In 2015, the joint company with GV Gold that holds the Krasny bedrock license, acquired a licence for alluvial mining which is located within the boundaries of the bedrock license. In 2017, the joint company was granted a bedrock exploration license, called “Batiy”, which borders the Krasny license on the Northwest.

The Krasny project is located in a gold rich lithological and stratigraphical area. It is characterized by intensive geochemical gold anomalies and rich alluvial gold deposits in the streams. The Krasny deposit is localized within the Upper Riphean Vacha suite in the form of a single discontinuous-continuous mineralized zone consisting of two saddle-shaped groups of vein-veinlet-disseminated quartz-sulphide gold ore bodies (upper and lower), one put upon another one.

The mineralized zone is confined to the axial part of the main structure of the ore occurrence – the Rudnaya anticline. The anticline represents an oblique overfold of the southeast strike with the axial surface dipping at 70-85° northeast. The limbs are composed of bands of alternating sandstone and phyllites up to 60m thick. The southern limb dips northeast at 85°, and the northern limb dips northeast as well at 45-75°.

Within the Krasny deposit, the mineralized zone is traced in trenches and boreholes from the exploration line 8 (northwest) to the exploration line 67 (southeast) at 2,360 meters. It is discontinuous-continuous lens-shaped or lens-shaped band-like in plan and saddle-shaped and lens shaped in section, with bends, bulges, splits and thinning out. The thickness is up to 20-80 meters at the flanks and up to 160-200 meters at the central part. The contours of the ore bodies have no clear boundaries and are defined on the basis of core and channel sampling results only. The oxidation zone is developed to the depth of 20-100 meters.

The upper group of the ore bodies is about 1,200 meters long; the vertical span of the mineralization is 250 meters wide; the lower group of the ore bodies is 2,360 meters long, and the vertical span of the mineralization is 400 meters. The total span of the mineralization studied in boreholes is 590 meters (elevation 1,010-420 meters) the length along the strike is 2,360 meters. The intensity of mineralization correlates directly with the degree of occurrence of quartz-sulphide veinleting and imposition of other hydrothermal-metasomatic alterations.

The mineralized zone within the Vostochny gold occurrence (initially called “Krasny North”) is traced in trenches and boreholes for 2,340 meters from the exploration line 146 in the west to the exploration line 205 in the east.

The gold mineralization is located within the northern and southern limbs of the upper structure and within the hinge zone of the lower structure. Within the upper structure, the ore bodies have a thickness of 5-8 meters. The northern limb of the upper structure is dipping north-east at 45 degrees. The southern limb dips sub vertically. It is possible, that the hinge zone of the upper ore body has been fully eroded. The vertical span of the upper mineralization is 130 meters. The lower structure has been traced between the drill profiles 150 and 158. The lower mineralization is located at the saddle zone of the anticline. It dips to the north-east at 61-65 degrees. It has been traced for 100 meters down the dip. Both the upper and the lower mineralizations are open along the strike and down the dip. Vostochny and Krasny represent the same type of gold mineralizations and may be processed together.

Meanwhile, the quartz content in the mineralized zone does not exceed 2-3 %. The morphological type of mineralization is mineralized zones-beds with veinlet-disseminated quartz-sulphide mineralization with the total sulphide quantity up to 3-3.5 %. Hosting ore bodies are presented by alternation of carboniferous quartz-sericite schists, siltstone and sandstone of the Vacha suite. The main mineral type of ore is quartz low-sulphide (pyrite).

Summer 2014, Kopy Goldfields entered into a joint venture agreement with the Russian gold producer GV Gold over the Krasny project. Under the agreement, GV Gold earned a 51% interest in the Krasny Project by paying Kopy Goldfields MUSD 1 in cash and by financing an infill exploration program followed by a reserve report in accordance with both the Russian GKZ classification and the international JORC standard. The budget for the total exploration program was MUSD 6 and was been financed by GV Gold in full. The exploration program was developed in two stages and targeted the Upper Mineralization of the Krasny deposit closest to the surface and limited to the depth of 200 meters.

Following a formal approval of a mineral reserve report for the Krasny deposit by the Russian GKZ authorities in Irkutsk, Kopy Goldfields received a further 2 MUSD in a conditional consideration cash payment from GV Gold.

STAGE 1 – exploration to confirm existing model

During the first stage, exploration activities were aimed at confirming the existing model of the Krasny mineralization. Exploration drilling was started in July 2014 and successfully completed on schedule by the end of November the same year. In total, 51 drill holes were completed, amounting to 7,916 meters of core drilling, while 1,712 meters of exploration trenches were also developed.

In addition, three core holes covering a total of 582 meters were completed with the aim of collecting rock to run metallurgical processing tests. In February 2015, two bulk samples of 1,000 kg each were sent to the Irgiredmet Engineering Company in Irkutsk, Russia, for metallurgical bulk sample processing tests for gold recovery. The results were received in November 2015 with a recommendation for similar processing technology for both the oxidized and primary rock with a projected total recovery of 90% for the primary ore and 75% for the oxidized ore. During December 2015 – March 2016, a second mineral-processing test based on new samples for the oxidized part of the Upper mineralization was carried out. The gold recovery via gravitation-flotation-leaching process totalled 78-79%, which is hence better than the previous results of 75%.

STAGE 2 – aimed at planning gold production

Following the successful completion of the first stage of exploration of the Krasny deposit, the second stage was initiated in 2015. A preliminary production model was drawn up based on available data in order to find the most optimal production scenario. The main objective of this stage was to collect information, as well as to plan for gold production on the Krasny license.

The stage 2 drilling was commenced on June 10, 2015 and finalized on September 18 the same year. Overall, 49 drill holes were completed, totalling 7,551 meters of core drilling. The drilling results confirmed and developed the geological model for Krasny deposit. Following completion of the Stage 2 exploration activities, an additional expansion drilling program was initiated on December 14, 2015 with the target of adding extra resources along the strike, but also filling in some blind spots between the drilling profiles left after the previous drilling. This program was finalized on February 25, 2016 and included 16 drill holes and a total of 3,504 meters of core drilling. The final results from the assay testing were delivered in March 2016, confirming expectations of content and grade in the Upper mineralization. The Lower Mineralization was also tested, showing grades above 2 g/ton and indicating an extra 20-23 tons of minable gold at the deposit, in addition to the 9 tons from the Upper Mineralization previously mapped out.

STAGE 3 – satellite gold mineralization discovered

The third stage drilling of the exploration program was commenced in April 2016 and completed in February 2017.The program was partially financed by remaining funds from Stage 1 and 2, but also by a joint investment from Kopy Goldfields and GV Gold of MUSD 2, split in accordance with the ownership structure. The exploration program included a total of 100 core holes drilled, accounting for 19,622 meters of core drilling. In addition, 1,965 meters of trench sampling was performed and 21,822 fire assay tests for gold received. Most of the drilling was focused on the Central part of the Krasny deposit and within the Upper structure, with the target to upgrade the quality of the gold resources from Inferred to Indicated. The exploration results also confirmed the modelling of the Lower structure mineralization, with new high-grade intervals being discovered. The drilling results confirmed that the Lower mineralization’s extend further along the strike both on the Western and the Eastern flanks outside both the initial model of 2012 and the reported JORC resources in 2016. On the western extension it also comes closer to the surface. The mineralization is still open to depth on most of the drill profiles.

During 2016, a satellite gold mineralization within the Krasny North structure was confirmed (later called “Vostochny”), which is located within 3-4 km from the Krasny Central. This mineralization is within the borders of the same Krasny license and makes part of the bigger Krasny project.

STAGE 4 – all targets achieved

The exploration program Stage 4 for Krasny was commenced in March 2017 and completed in December the same year, pursuing several targets:
• Infill Exploration drilling on the Lower Structure to convert part of Inferred resources of the Lower structure into Indicated category, to proceed with Feasibility Studies for the Lower structure;
• Prospecting of both the Upper and the Lower structures within Krasny, based on strong evidences for further increase of gold resources along the strike of mineralization;
• Exploration of the Vostochny mineralization along the strike as well as infill drilling;
• Prospecting within other parts of the Krasny license area with target to identify additional “Vostochny” type gold mineralizations.

During 2017, 79 core holes were drilled, totaling 19,569 meters. In addition to drilling, all trench sampling activities were finalized in October 2017. In total, 3,110 meters of trenches were developed and logged, of which 1,425 meters were sampled and assay tested. All targets of the exploration program 2017 were achieved. Kopy Goldfields was the operator of the exploration program for the fourth year in a row since the start of the joint venture operations in 2014. The budget for the 2017 exploration program was planned at MUSD 4.4 and the program was partially financed by a positive cash balance left after Stage 3 and partially by new investments by Kopy Goldfields and GV Gold by the amount of MUSD 2.1. Cumulative joint investments in the Krasny project totaled MUSD 17.8 by the end of 2017.

The most significant outcome of the drilling activities during 2017 was the discovery of the Lower structure at Vostochny mineralization. Based on positive exploration results from 2017, the new 2018 exploration program on Krasny and Vostochny was commenced in January 2018. Exploration activities on Krasny during 2018 included 11,638 meters of core drilling, primarily within the Krasny and Vostochny structures and within the Batiy license area. Water flow tests, engineering studies, a geochemical survey, as well as new processing tests for Vostochny were also completed during the first half of 2018.

Since February 2018, the joint venture partner, GV Gold, is the operator of the exploration program on the Krasny project.

The initial mineral processing test was made in 2012 with a 60 kg bulk sample, representing primary ore. The test confirmed an 85 % recovery with conventional gravitation-flotation-leaching technology. In February 2015, two bulk samples of 1,000 kg each were sent to the Irgiredmet engineering company in Irkutsk, Russia, for metallurgical processing tests. The results were received in November 2015 with a recommendation for similar processing technology for both the oxidized and primary rock with a projected total recovery of 90 % for the primary ore and 75 % for the oxidized ore. A second mineral-processing test based on new samples for the oxidized part of the Upper mineralization was carried out during December 2015-March 2016. The gold recovery via gravitation-flotation-leaching process totaled 78-79 %.

In April 2017, a mineral processing test of a bulk sample, representing the gold ore of the Upper structure, was completed by Irgiredmet. The total weight of the processed sample was 3,259 kg with an average gold grade of 1.92 g/ t. The test developed and finetuned the previous metallurgical results and recommended a flow chart for the Krasny gold ore treatment processes. The proposed process will involve gravitation and flotation circles with further leaching of gravity and flotation concentrates. All operations will be developed on the Krasny site. The Krasny processing plant will produce gold Doré bars, which will be further refined at an external refinery to bankable quality gold bars. The through gold recovery for the ore from the Upper structure is expected at 85.5 %, which is higher than previous processing test results.

During the first quarter of 2018, a mineral processing test for the Vostochny gold mineralization was completed. The processing test was done by TOMS Engineering, a mining engineering consultancy from Irkutsk, Russia. The target was to evaluate the possibility of processing the gold ores from the Vostochny mineralization using the flow chart previously proposed for the Krasny gold ores. The test confirmed that the ore from the Vostochny mineralization may be processed using the processing flow chart proposed for the Krasny ore with 90.2 % total gold recovery. The report confirmed that the gold ore from Vostochny may be mixed in any proportions with the ore from the Krasny deposit with no loss of gold recovery. It was proven that Vostochny is a similar type of gold mineralization as Krasny and may be viewed as a satellite deposit of Krasny. This means that Krasny and Vostochny may be developed together, sharing the same infrastructure and one central processing plant.

Russian GKZ

On December 28, 2015, a mineral reserve report for the Upper mineralization of the Krasny deposit was completed and filed with the Russian GKZ authorities in Irkutsk. The report was formally approved by the Federal Agency on Subsoil Usage (subsidiary of the Russian Ministry on Natural Resources) in Krasnoyarsk on March 30, 2016. The report classified the Krasny mineralization to be a deposit with total ore reserves under the C2 category of 6,317 ktons with an average grade of 1.55 gr/ t, which makes 9,767 kg of gold (314 koz). The report recommends the deposit for pilot gold production.


In parallel to the GKZ report, reports on the mineral resources in accordance with the JORC provisions have been developed by Micon International Co Limited. Micon is a world leading mineral industry consulting company with offices in Toronto and Vancouver (Canada) and in Norwich (United Kingdom). Micon has previously been involved in other projects in the Bodaibo area and is therefore familiar with the local geology.


The JORC report was announced in May 2016, showing 288,000 oz of Indicated mineral resources (7,848,000 tons of rock at an average grade of 1.141 g/t Au) and 667,000 oz of Inferred mineral resources (12,324,000 tons at an average grade of 1.682 g/t Au) within an economically minable open pit. The resource estimation increases the quality of gold resources, with Indicated resources representing 30% of the total mineral resources reported, compared to 15% in the previous JORC report from 2013. The estimation does not include the drill results acquired since January 2016.

Download the 2016 JORC report here

Download the 2013 JORC report here.

In February 2017, an update of the 2016 JORC resource estimation was initiated by Micon. The report was completed in September 2017 and confirmed a 45 % increase in gold resources to 1,388 koz of gold y-o-y. The resource estimation included both the Krasny and Vostochny mineralizations. The report also included Probable reserves for Krasny. For Krasny, the resource estimation showed 273 koz of Indicated mineral resources (mineral resources of 7,617 ktons at an average grade of 1.11 gr/ t Au) and 1,052 koz of Inferred mineral resources (18,536 ktons at an average grade of 1.76 gr/ t Au). The resource statement also reported 240 koz of Probable gold reserves (7,327 ktons at an average grade of 1,02 gr/ t Au) as a part of total gold resources. Vostochny showed a total of 63 koz of Inferred mineral resources (1,114 ktons at an average grade of 1.76 gr/ t Au). All resources were reported within economically minable open pits.

In May 2018, field exploration activities on Krasny were mostly finalized and an update of the JORC resource estimation was issued in early June 2018. The report was developed by Micon, which made the JORC resource estimation for Krasny in 2016 and 2017 as well. The report was based on the exploration data acquired through March 2018. The new estimation of 1,832 koz of Indicated and Inferred gold resources for the Krasny project showed a 32 % increase since last year, which reflects successful exploration activities during 2017 and early 2018. The resource estimation included both Krasny and Vostochny. For the Krasny deposit, the resource estimation showed 291 koz of Indicated mineral resources (mineral resources of 7,539 ktons at an average grade of 1.20 gr/ t Au) and 1,202 koz of Inferred mineral resources (18,515 ktons at an average grade of 2.02 gr/ t Au). The Vostochny mineralization showed a total of 339 koz of Inferred mineral resources (6,689 ktons at an average grade of 1.57 gr/ t Au). All resources were reported within economically minable open pits. The report also includes 257 koz of Probable gold reserves.

Download the 2018 JORC report here (English)

Download the 2018 JORC report here (Russian)

Several scoping studies covering the Krasny development have been completed over the last few years. All provided positive outcomes. The first report was done by Miramine Mining Consultancy in 2013. The next report was developed by Irgiredmet in 2016. In October 2017, an Investment justification report was commenced by TOMS Engineering, focusing on development of the Upper mineralization only. In parallel with the Investment justification report, TOMS Engineering also prepared a Scoping study for the development of both the Upper and Lower Mineralization. The study did not, however, include the newly discovered Vostochny mineralization, leaving this as an upside. The study evaluated different gold production options, including the development of open pit production and a combination of open pit and underground mining. All production scenarios returned positive free cash flows.

In 2019, Kopy Goldfields appointed the Australian firm AMC Consultants Pty Ltd to do a scoping study based on the latest mineral resource report from 2018. The scoping study provides several production scenarios for developing the Krasny project either as an open pit alone, or combined open pit and underground mine, with annual processing plant throughput capacities varying from 0.4 Mt to 3 Mt. All scenarios would return positive NPVs before application of potential tax benefits.

The recommended production option for Kopy Goldfields, providing the highest internal rate of return (IRR) but not the highest NPV for the investments, is one that uses an annual 1 million tonne plant throughput rate and a combined open pit and underground mine at the Krasny deposit in combination with an open pit mine at the Vostochny mineralization. This option was evaluated using a gold price of USD 1,300/ounce and  features the following:

  • Pre-tax NPV of USD 90 to 104 million at 6% discount rate and pre-tax IRR of 20% to 26%
  • Mine life of approximately 16 years and a discounted pre-tax payback period of 6 years
  • Total capital expenditure (CAPEX) of approximately USD 107 million with upfront CAPEX of USD 66 million
  • Average metallurgical recovery over mine life of 87% using a gravity-flotation-CIL flowsheet
  • Average gold head grade of 1.8 g/t
  • Average life of mine (LOM) annual gold production of 40,000 to 50,000 ounces
  • Average LOM stripping ratio (including both open pit and underground) of 7 tonnes waste per tonne of ore

Different production scenarios were developed within the scoping study, and four of them are summarized in the table below. In general, most of the modeled cases were limited to the Krasny deposit only, and all cases have positive NPV values.

The recommended mining option is based on open pit and underground mining at the Krasny deposit, combined with open pit mining at the Vostochny mineralization (Scenario 4 in the table below). Inclusion of gold resources from the Vostochny mineralization extends the mine’s life and financially strengthens the project. The production scenario to achieve this involves a plant throughput of 1 Mt per year for an initial 8 years of operation, focusing primarily on the Krasny Upper structure. A total of 258 koz of gold could be produced at this stage. In parallel, exploration of the Krasny Lower structure and the Vostochny structure could proceed to allow the application of the Modifying Factors via a pre-feasibility study (PFS) or feasibility study (FS) to convert Mineral Resources to Ore Reserves and to prepare for production. Starting from year 8 and until the end of mine life, the Vostochny open pit mine could then produce an average of 500,000 tonnes per annum (tpa) of plant feed containing approximately 200 koz of gold. An additional 500,000 tpa could be sourced from a Krasny underground operation, with total production in excess of 400 koz of gold at full capacity until approximately 2035.

Although this mining scenario does not provide the highest NPV, it is recommended as the base case scenario as it offers the shortest payback period, the highest IRR and modest up-front CAPEX of USD 66 million to commence gold production. Further CAPEX of USD 42 million will be required after 7 years of operation to proceed with underground mining at Krasny. By then, the initial CAPEX would already be repaid, and free cash flow would be generated. This production scenario could be launched with limited further exploration needed to complete an FS.

The highest NPV and lowest operating costs are achieved with the 3 Mtpa open pit mine production scenario with no underground mining. However, this scenario requires higher upfront capital cost expenditure. In order to justify this and reduce project risks, additional exploration studies and drilling at Krasny would be required to convert the majority of Inferred Mineral Resources of the Krasny Lower structure into Measured and Indicated Mineral Resources before detailed production planning could begin.

A production scenario for developing the Krasny project has not yet been chosen. Some production scenarios reviewed below do not include mining the Vostochny mineralization, not because of the merits of Vostochny itself but due to the preliminary nature of the scoping study level review. Apparently, adding development of Vostochny to the mining plan improves the mining economics as can be seen by comparing mining methods 2 and 4 in the table below. All the mining options return positive NPV and advocate further project development. The choice of mining scenario will influence the timing of the production start and initial CAPEX required for the project.

Comparison of Krasny production scenarios – gold price of USD 1,300/oz

Production Scenario 0.4 Mtpa Open Pit** 1 Mtpa
Open Pit
and Under-ground**
3 Mtpa Open Pit** 1 Mtpa Krasny Open Pit and Underground with Vostochny
Scenario 1 2 3 4
Pre-tax NPV at 6% discount rate, MUSD 16 62 301 104
Pre-tax IRR, % 11 23 20 26
LOM, years 16 15 12 16
Mill capacity pa, Mt 0.4 1.0 3.0 1.0
Average gold grade, g/t 1.2 2.0 1.6 1.8
Total CAPEX, MUSD 38 105 150 107
Average open pit stripping ratio, t/t 5.0 4.5 13 7
Average LOM annual gold production, koz 13 39 110 47
Average operating costs, USD/oz 860 1 100 930 1 100
Pre-tax undiscounted payback period, years 11 5 8 5

In January 2016, the PreFeasibility study was commenced, starting with detailed Scoping study calculations.

Exploration activities 2018

  • JORC resource estimation for Krasny shows a 32 % increase in gold resources to 1,832 koz for the Krasny project since 2017.
  • Results from a mineral processing test of Vostochny ore confirms 29 % gold recovery, using the flow chart proposed for the Krasny ores.
  • Drilling of 11,638 meters of core holes, primarily within the Krasny and Vostochny structures and within the Batiy license area
  • Developed detailed mineral processing flow chart for the Krasny ore representing lower structure
  • Developed detailed mineral processing flow chart for the Vostochny mineralization

Activities 2017

  • New bedrock exploration license “Batiy” granted, bordering the Krasny license to the northwest and covering 86 km2
  • Results from a mineral processing test of Krasny ore confirm 85.5 gold recovery with an average grade of 1.92 g/ t
  • Updated JORC resource report released showing 45 % increase of gold resources
  • New scoping study based on several production scenarios – all yielding positive free cash flows
  • 79 core holes drilled, totaling 19,569 meters

Activities 2016

  • Mineral resource report under the JORC-code published
  • Mineral processing flow chart commenced
  • Investment justification report commenced
  • 95 drill holes
  • 18,838 meters of core drilling
  • 1,965 meters of exploration trenches

Activities 2010 – 2015

  • Recognizance geological mapping of 100 km
  • 103 km of exploration trenches
  • Review and digitalize historic exploration data. Design of exploration activities
  • Totally 30,764 meters of core drilling 100 drill holes
  • Scoping study report and updated mineral resource estimation
  • Engineering and metallurgical processing tests
  • Mineral reserve report under the GKZ-regulations
  • Mineral resource report under the JORC-code
  • Hydrological tests

Historical exploration (before 2010) within the license area

  • Detailed geochemical and geophysical survey of 1:25,000 scale
  • 14,723 meters of core drilling
  • 110,797 meters of exploration trenches
  • 130 meters of underground shifts