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Kopy Goldfields: Krasny project - new positive scoping study results for the upper structure


Kopy Goldfields AB (publ) ("Kopy Goldfields" or the "Company") is happy to
announce positive scoping study results for the Krasny gold project. The
study evaluated gold production from the Upper structure only and confirmed
feasibility of Krasny mine development with total undiscounted free cash
flow of USD 94 million at a fixed gold price of 1,100 USD/oz and estimated
total production costs of 475 USD/oz.

The scoping study was performed by Irgiredmet engineering consultancy
during January - March 2016 and included all exploration results until and
including Stage 2 of the recently finalized exploration program. The study
evaluated financial results of gold production from the Upper structure
only and did not include any development of the Lower structure thus
leaving the upside from gold production of the Lower structure for the
future. The scoping study confirmed the feasibility of mine development
based on the Upper gold structure only and was used as an external
justification for moving the Upper gold structure into Feasibility Studies.

The scoping study was done in parallel with the GKZ-reporting and the
JORC-reporting which means that the amount of gold mined in the scoping
study is based on an internal calculation rather than the approved
GKZ-reserves or the coming JORC-report. Compared to the scoping study
released in April 2013, this study is based on only the Upper
mineralization and a fixed gold price of 1,100 USD/oz is used instead of
1,670 USD/oz.

Highlights of the scoping study:

* Total gold resources mined: 5,927 ktons
* Average grade: 1.75 g/t
* Total gold mined: 10,351 kg of gold (332 koz)
* Mine and plant capacity: 800 ktons of rock per annum
* Overall recovery: 78%
* Life of mine: 8 years
* Total gold produced: 8,075 kg (260 koz)
* Average annual gold production, LOM: 1,009 kg (32 koz)
* Average gold price: 1,100 USD/oz at fixed Rub/USD rate of 70
* Annual average revenue from gold sales: USD 35 million
* Annual average profit before tax: USD 15 million
* Initial capital costs (no VAT): USD 49 million (plant, open pit,
infrastructure, equipment and machinery)
* Total capital costs (incl. resale of equipment and land reclamation,
Rub/USD rate of 70): USD 38 million
* Total production costs (mining, processing, royalty and admin): 475
* Undiscounted project value: USD 94 million (USD 119 million pretax)
* Discounted project value (NPV): USD 25 million at 10% discount rate
* IRR: 18%
* Average strip ratio: 2.84 m3/t

The scoping study does not discuss financing options for project
development. Financing of the mine and plant will be discussed later this
year when the results from Feasibility Studies and the 2016 explorations
activities of the Lower structure will be summarized. However, there is a
general understanding between the Company and GV Gold that majority of
financing should be raised by debt.

Mikhail Damrin, CEO of Kopy Goldfields, commented the results: "We are
pleased with the results of the scoping study. There have been several
valuations of the Krasny gold production done internally already and there
will be many more valuations in the future, however all studies confirm
feasibility of mine development on Krasny. The target of this study was to
get an external verification of future production and capital costs before
commencing the 2016 development program. The results of the study confirm
that the Krasny project is profitable even if the mine development is
limited to the Upper structure only. We believe that the Lower structure is
minable as well at the current conditions and following the 2016
explorations we will update the valuation by adding production from the
Lower structure as well. We have now moved into feasibility activities for
the Upper structure and further exploration activities for the Lower
structure with confidence".

För pressmeddelande på svenska se bifogat dokument (Swedish).

Stockholm, May 12, 2016

For more information, please contact:
Mikhail Damrin, CEO, +7 916 808 12 17, mikhail.damrin@kopygoldfields.com

Tim Carlsson, CFO, + 46 702 31 87 01, tim.carlsson@kopygoldfields.com

The following documents can be retrieved from beQuoted
Kopy Goldfields Pressrelease 2016-05-12 English.pdf

Kopy Goldfields Pressrelease 2016-05-12 Svenska.pdf

About Kopy Goldfields AB
Kopy Goldfields AB (publ), listed at NASDAQ First North in Stockholm is a
gold exploration and production company operating in one of the most gold
rich areas in the world; Lena Goldfields, Bodaibo, Russia. The company
holds 11 bedrock exploration- and production licenses and one alluvial
license covering in total 1,963 sq km, of which the Krasny licenses
(bedrock and alluvial) are held 49% by the company. The preliminary
forecast is to be in production in 2018. The target for Kopy Goldfields is
to become a near-term gold producer in cooperation with a producing partner
under JV agreement.

Kopy Goldfields AB applies International Financial Reporting Standards
(IFRS), as approved by the European Union. Aqurat Fondkommission acts as
Certified Adviser, contact number: +46-8-684 05 800.

The Share
Ticker: KOPY

Outstanding shares: 59,899,541

Författare BEQ

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