OPIC Set to Invest In Russian Mining

The Overseas Private Investment Corporation will provide investment guarantees worth $55 million and insurance up to $150 million for a gold mining project in Russia's Far East.Officials at the U.S. government agency said Thursday that a further $55 million two-tranche financing for the $145.7 million project would come from the European Bank for Reconstruction and Development.The project involves development of the Kubaka gold and silver deposit northeast of the Russian city of Magadan by the Omolon gold mining firm, a joint venture between U.S.-based Cyprus Amax Minerals and five regional mining firms.The joint venture will mine ore and sell resulting gold and silver compound to the state.Kubaka has an estimated 2.2 million ounces of recoverable gold reserves and 1.7 million ounces of silver reserves over the project's seven-year life, a feasibility study by the Vancouver-based firm Kilborn Engineering Pacific showed.OPIC will provide expropriation and political violence insurance cover of up to $150 million.The project is designed to process 639,000 tons of ore annually to produce an average 326,000 ounces of gold and 255,000 ounces of silver a year. Production is scheduled to start before the end of 1996.OPIC, which funds and guarantees U.S. projects abroad, has provided insurance worth $665 million for 29 projects in the Commonwealth of Independent States, of which $535 million went to Russia. The agency said it will invest $2.5 billion in Russia and the ex-Soviet republics before September 1995.