An updated feasibility study from LogiProc is expected by July 2026, meaning the design basis is still being refined at the point the construction budget has been formally approved
Decision Focus
On June 22, 2026, Silvercorp Metals announced a US$196.3 million budget for its Chaarat ZAAV joint venture in the Kyrgyz Republic, covering construction of the Tulkubash open-pit heap leach operation and early capital to advance the Kyzyltash sulfide project. The operational signal for Mining Operations Directors is embedded in the project’s mechanics: fixed unit cost contracting for open-pit stripping, a Chinese engineering firm redesigning core process equipment to local regulatory standards, and a deliberate two-phase structure that separates oxide simplicity from sulfide complexity — all decisions with direct parallels to how operators structure phased capital deployment in frontier jurisdictions.
90-Second Brief
Now, silvercorp holds 70% of ZAAV and operates the venture; Kyrgyzaltyn holds a 30% free-carried interest. Phase 1 at Tulkubash targets 4 million tonnes per year of oxidized ore through a heap leach flowsheet crushing to P80 12.5 mm, feeding a carbon absorption, desorption and recovery plant to produce gold doré. Planned spend is US$57 million in 2026 and US$139 million in 2027. An updated feasibility study from LogiProc is expected by July 2026, meaning the design basis is still being refined at the point the construction budget has been formally approved.
What Is Really Happening?
The project is structured to sequence risk. Oxide ore at Tulkubash suits heap leach — lower capital intensity than milling, a proven flowsheet, and a faster path to production. The more demanding Phase 2 at Kyzyltash, involving flotation, bacterial oxidation, and carbon-in-leach for sulfide ore, is not scheduled to begin construction until 2028 at the earliest, conditional on resource conversion drilling, a preliminary economic assessment, and a full feasibility study. Three contractors with 12 drill rigs are currently active at Kyzyltash, with 50,000 to 60,000 metres of in-fill and step-out drilling planned for 2026 alone.
Within Phase 1, BGRIMM of Beijing has been awarded a contract to redesign the crusher and ADR plant to Kyrgyzstan’s technical standard, with that redesign expected to complete in March 2027. This creates a visible tension: capital deployment is accelerating in 2026 while the engineering basis for the most capital-intensive component — the heap leach system budgeted at US$75.6 million — is still being localized. The announcement explicitly acknowledges this adjustment window. It is a common pattern in staged construction, but the timeline is defined and the exposure is real.
The open-pit and waste rock scope — budgeted at US$51.5 million — is structured on fixed unit cost per cubic metre removed. Five contractors visited site and provided initial quotes; four already operate in Kyrgyzstan, which reduces mobilization risk. The budget figure is anchored to a quote from one of those contractors rather than a reconciled average across all respondents. Fixed unit cost models transfer volume risk to the owner: if actual stripping volumes diverge from the bill of quantity, the outturn moves accordingly.
Why It Matters for Mining Operations Directors
The two-phase structure illustrates a capital sequencing logic relevant to any operation with mixed ore types or an expanding resource base: enter with the simpler, lower-risk processing route, build cash flow and operational competence, then commit capital to the more demanding process train. For MODs evaluating phased brownfield expansion or processing circuit additions, the Tulkubash design provides a specific reference point at 4 Mtpa oxide throughput — with a heap leach capital cost of US$75.6 million for crusher, pad, and ADR plant as the anchor figure.
The BGRIMM redesign requirement is the less-discussed but more instructive data point. Equipment designs optimized for one jurisdiction do not transfer directly into another without regulatory and engineering localization. This step is frequently underestimated in project budgets and schedules — and here the consequence is explicit: a process plant design imported from prior studies required a new third-party contract and a timeline extending to Q1 2027. Operations in Central Asia, parts of sub-Saharan Africa, and select South American jurisdictions regularly encounter the same friction.
The single-source pricing basis for the open-pit budget also warrants attention. US$51.5 million derived from one contractor’s quote carries concentration risk. When geotechnical surprises, access delays, or regulatory approvals shift actual cubic metres mined, the bill of quantity underlying that unit rate becomes the variable, not the rate itself.
Forward View
If Tulkubash reaches nameplate capacity, it will generate the first publicly available operating benchmark for a 4 Mtpa heap leach in this part of Central Asia — useful reference data for operators assessing similar-scale oxide gold projects in emerging jurisdictions. The updated LogiProc feasibility study expected in July 2026 will be the first opportunity to assess how construction cost inflation and equipment pricing have moved the economics since the 2021 study.
Phase 2 at Kyzyltash carries a longer horizon signal. A BIOX plus CIL circuit commissioned in a Central Asian context remains relatively rare. If the 2026 drilling program successfully converts inferred resources and the 2027 PEA supports development, this project could add a meaningful data point on sulfide processing economics and permitting timelines in the Kyrgyz Republic — a jurisdiction where regulatory review of feasibility studies involves government submission before construction approval.
What Is Still Uncertain
The updated feasibility study remains unpublished; the current budget rests on studies from 2018 to 2021 with targeted revisions. The BGRIMM redesign is incomplete, and the announcement explicitly states the final heap leach budget may shift under the new design. No gold recovery rates, operating cost guidance, or production cost per ounce have been confirmed in this announcement. Phase 2 resource conversion is active but unresolved — the path from current inferred classification to a sanctionable feasibility study requires drill results, metallurgical test work, and Kyrgyz government review, each carrying independent execution risk.
One Question for Your Team
If your operation uses a heap leach circuit, or is evaluating one as part of a phased development, does your current equipment design assume direct transferability from its original feasibility jurisdiction — or have you formally budgeted the localization engineering step that Silvercorp has now contracted out as a discrete third-party scope?
Sources
- Prnewswire — Silvercorp Announces the Construction Plan and Schedule for the Development of the Chaarat ZAAV Project (Link)
