The Kupol deposit is considered to be an example of a low-sulphidation epithermal deposit (e.g., Panteleyev, 1996). Low-sulphidation epithermal deposits are high-level hydrothermal systems, which vary in crustal depths from about 1 km to surficial hot spring settings. Host rocks are extremely variable, ranging from volcanic rocks to sediments. Calc-alkaline andesitic compositions predominate as volcanic rock hosts, but deposits can also occur in areas with bimodal volcanism and extensive subaerial ashflow deposits. A third, less common association is with alkalic intrusive rocks and shoshonitic volcanics. Clastic and epiclastic sediments in intra-volcanic basins and structural depressions are the primary non-volcanic host rocks.

Mineralization in the near surface environment takes place in hot spring systems, or the slightly deeper underlying hydrothermal conduits. At greater crustal depth, mineralization can occur above, or peripheral to, porphyry (and possibly skarn) mineralization. Normal faults, margins of grabens, coarse clastic caldera moat-fill units, radial and ring dyke fracture sets, and hydrothermal and tectonic breccias can act as mineralized-fluid channelling structures. Through-going, branching, bifurcating, anastomosing, and intersecting fracture systems are commonly mineralized. Mineralization forms where dilatational openings and cymoid loops develop, typically where the strike or dip of veins changes. Hanging wall fractures in mineralized structures are particularly favourable for high-grade mineralization.

Deposits are typically zoned vertically over about a 250 m to 350 m interval, from a base metal-poor, Au-Ag-rich top to a relatively Ag-rich base metal zone and an underlying base metal-rich zone grading at depth into a sparse base metal, pyritic zone. From surface to depth, metal zones grade from Au-Ag-As-Sb-Hg-rich zones to Au-Ag-Pb-Zn-Cu-rich zones, to basal Ag-Pb-Zn-rich zones.

Silicification is the most common alteration type with multiple generations of quartz and chalcedony, which are typically accompanied by adularia and calcite. Pervasive silicification in vein envelopes is flanked by sericite-illite-kaolinite assemblages. Kaolinite illite-montmorillonite±smectite (intermediate argillic alteration) can form adjacent to veins; kaolinite-alunite (advanced argillic alteration) may form along the tops of mineralized zones. Propylitic alteration dominates at depth and along the deposit margins.

The mineralization typically includes pyrite, electrum, gold, silver, and argentite. Other minerals can include chalcopyrite, sphalerite, galena, tetrahedrite, and silver sulphosalt and/or selenide minerals. In alkalic host rocks, tellurides, roscoelite and fluorite may be abundant, with lesser molybdenite as an accessory mineral.

Features that classify the Kupol deposit as a low-sulphidation epithermal-style deposit include:

1) Vein was emplaced in a predominantly extensional environment, vein is associated with regional through-going structure;
2) Presence of chalcedonic and opaline quartz (low temperature cryptocrystalline to colloidal quartz);
3) Mineralization is hosted in multiphase colloform- to crustiform-banded quartzadularia veins and polyphase breccias; well-developed cyclic banding of quartz and sulphides-sulphosalts with cryptocrystalline (chalcedonic) to fine-grained quartz; cockade and lattice structures are common;
4) Gold occurs within or is rimmed by sulphosalts and free within the quartz;
5) Sulphide assemblages are dominated by pyrite. Russian studies indicate the presence of very fine-grained arsenopyrite, stibnite, silver-rich tetrahedrite (freibergite), acanthite, stephanite, and pyrargyrite;
6) Zonation of the alteration within the deposit area with distal propylitic alteration grading into proximal silicification, argillic alteration and potassic alteration; above the deposit in the north area an advanced argillic cap has developed;
7) Fluid inclusion studies that show homogenization temperatures for vein samples that range from 160 to 260°C;
8) Silver-gold ratio of 12:1.

Gold and silver occur as native gold, the gold-silver alloy electrum, in acanthite and silver-rich sulphosalts (stephanite and pyrargyrite dominant). Gold and these minerals occur with pyrite and minor amounts of arsenopyrite, chalcopyrite, galena and sphalerite predominantly in bands within chalcedonic quartz, quartz and quartzadularia colloform and crustiform veins and breccias. The predominant gold and silver minerals of the Kupol deposit are electrum, native gold, silver-rich tetrahedrite (freibergite), acanthite, and a variety of sulphosalts. Stephanite and pyrargyrite are the dominant sulphosalts. Traces of selenium-bearing sulphosalts and naummannite are present. Visible native gold or gold-silver amalgams are common throughout the deposit but rarely exceed 3 mm in size.

Pyrite and marcasite are ubiquitous, and are accompanied locally by chalcopyrite. Base metals occur throughout the Kupol vein; however, there is not a noticeable transition from precious to base metal-rich mineralogies at depth.

Polymetallic mineralization present in the veins to the southwest of the main vein system (Vtoryi veins) may reflect a different source of hydrothermal fluids or lateral zonation of fluid chemistry out from the main structure. These veins have silver-gold ratios that range from 1:1 to 1,500:1.

The Kupol deposit is located in the 3,000 km long Cretaceous Okhotsk-Chukotka volcanogenic belt. This belt is interpreted to be an Andean volcanic arc type tectonic setting, with the Mesozoic Anui sedimentary fold belt in a back-arc setting to the northwest of the Kupol region. Tthe Kupol deposit area is centred within a 10 km wide caldera, along the northwestern margins of the 100 km wide Mechkerevskaya volcano-tectonic “depression”, an Upper Cretaceous bimodal nested volcanic complex. The volcanic succession in the area is 1,300 m thick and consists of a lower sequence of felsic tuffs and ignimbrites, a middle sequence of andesite to andesite-basalt flows and fragmentals capped by felsic tuffs and flows.

The property is underlain by shallow eastward-dipping andesite lithic tuffs, feldsparhornblende porphyry andesite, and andesite-basalt (trachytic andesite) flows. The andesitic volcanic units are intruded by massive to weakly banded rhyolite dykes, rhyolite and dacite flow-dome complexes, and basalt dykes. The main deposit strikes north-south and has been divided into six contiguous zones. From north to south these are: North Extension, North, Central, Big Bend, South, and South Extension.

The volcanic stratigraphy of the Kupol deposit comprises rocks of andesitic composition that have been divided into three principal groups (flows, volcaniclastics, and epiclastics) based on composition, textures, and depositional environment:

Each group is further subdivided based on composition and/or texture. The volcanic rocks are intruded by dykes of basalt and rhyolite composition. The rhyolite dykes are most abundant and extensively intrude faults and the vein zone. Locally, zones of polylithic breccia with a clayey or glassy matrix occur adjacent to dykes and in the vein zone.

The Kupol vein system dips steeply to the east at 75° to 90° and describes a broad arc varying between azimuth 22° and 350°. The vein is a fissure structure that contains local splays, anastomosing vein sets, and cymoidal loop structures. The cymoids correspond to thickening of the veins and development of higher-grade shoots.

The highest concentration of precious metals in the main deposit occurs in the Big Bend Zone, a dilational jog in the Kupol structure where the vein swings from an azimuth of 000° to 010-022°. The ore shoot in this area is approximately 700 m in strike length and plunges toward the South Zone at a shallow angle where it continues for greater than 300 m.

The Kupol mineralization consists of high-grade gold-silver veins. Veins vary between segments of single vein and segments with multiple, sub-parallel, or branching veins. Mineralization is concentrated in distinct shoots separated by areas of barren vein. Vein thickness is quite variable; one area of the vein in the North Upper zone is typified by greater-than-normal thicknesses and better-than-average ore grade. Vein horizontal widths average approximately 6 m for the deposit as a whole, ranging between 2.5 m in the South Extension zone and 12.5 m in the North Upper zone. Diluted individual ore shoot grades vary between 12 and 25 g/t gold.

The mining method currently in use is long hole longitudinal retreat sub level open stoping (the Avoca method) (Figure 16-1) with the following parameters:

- Sills are driven on 15 m (sublevel) spacing approximately 4.5 m high;
- Longhole stopes (panels) are drilled using parallel or fan drill holes between the sublevels (approximately 11 m);
- A slot is drilled and blasted first to create a void to shoot to if one does not exist;
- Multiple rings are blasted into the void (exact number of rings blasted is dependent on production requirements and regulations);
- Stopes are filled with waste rock backfill as production advances, typically leaving only 20 m of void to reduce dilution and hanging wall failure;
- The production cycle is repeated until the level is completed;
- Temporary sill pillars are left between mining fronts;
- A concrete sill pillar is constructed on the first (lowest) sill cut of a mining front if there is an expectation ore will be mined up to this sill from below.

The Kupol processing plant also processes ore from Dvoinoye. The ores from the two sites are processed in batches, with Dvoinoye ore typically being processed at the start of each month.

The milling process consists of primary crushing and a semi-autogenous grinding (SAG) mill / ball mill grinding circuit, and includes conventional gravity technology followed by whole ore leaching. Merrill-Crowe precipitation is used to produce gold and silver doré bars. Countercurrent decantation (CCD) wash thickeners recover soluble gold and silver, and a cyanide destruction system is used to reduce cyanide concentrations to an acceptable level for disposal. The tailings flow by gravity through a pipeline to a conventional tailings impoundment. Doré bars are shipped to the non ferrous metals plant in Krasnoyarsk. Average mill recovery, based on both Kupol and Dvoinoye ore, is 95% for gold and 85% for silver. The mill availability is 94%.

The mill is designed to process ore on a two shift per day, 365 days per year schedule, at a rate of approximately 4,500 tonnes per day or 1,642,500 tonnes per year.

Ore is trucked from the mine to a stockpile and transferred to a coarse ore bin using a front end loader. From the stockpile, ore is fed via grizzly screens (bars spaced 700 mm) into a coarse ore bin of 150 tonnes. Coarse ore is then conveyed to a Birdsboro-Buchannan jaw crusher with a discharge opening of 150 mm. Crushed ore is conveyed to a crushed ore bin with 3,500 m³ capacity.

Two apron feeders are provided below the crushed ore bin to feed ore to the SAG mill feed conveyor. The first stage of grinding is wet semi-autogenous grinding in a Koppers (Metso) mill (7.0 m diameter x 3.0 m effective grinding length) in a closed circuit with a vibrating screen for 2 mm primary grind size.

Screen oversize is sent back to the SAG mill feed conveyor and screen undersize is fed to nine Krebs hydrocyclones for further size control. Hydrocyclone underflow reports to the ball mill Koppers (Metso) (5.0 m diameter x 9.2 m effective grinding length).

Hydrocyclone overflow product is at a grind size of 80% minus -0.075 mm.

A gravity gold recovery circuit is located within the grinding circuit. Slurry is pumped from hydrocyclone feed sump to two centrifugal gravity concentrators (Knelson KCXD30) equipped with a control unit to vary operation mode and flush cycle. Concentrate is further processed at a gravity table. As concentrate builds up it is refined to concentrate bars.

Hydrocyclone overflow with solid content of 15% flows by gravity to the surge tank. From the surge tank, slurry is pumped to an EIMCO deep-cone thickener equipped with an agitator drive. Flocculent is added to get a clear overflow and to enable solids sedimentation. The thickener circuit overflow is pumped to a grinding circuit to be used as process water. Underflow with solids content of 50% is pumped to a pre aeration tank. The pre-aeration tank is equipped with a covered and ventilated agitator to stir slurry. The slurry then flows by gravity into the first of six leaching tanks for gold and silver to be dissolved.

The six leaching tanks are equipped with agitators to stir slurry. All leaching tanks are covered and provided with exhaust ventilation. The design of the leaching circuit ensures that slurry flows by gravity from one tank to another due to the descending top levels of tanks. Overflow from the last leaching tank is pumped to the first CCD thickener tank. Cyanide solution is added to the first, second and third leaching tanks at an adjustable flow rate. Lime milk is added to the pre-aeration tank, and the first and third leaching tanks. Lime is required to adjust pH level, while cyanide is added based on silver and gold content. Lead nitrate is added to the pre-aeration tank, and the first and second leaching tanks.

Pregnant solution residue tails are removed in a CCD circuit in five stages. The circuit comprises five EIMCO deep-cone thickeners equipped with agitator drives. The underflow of thickener tanks at each stage is pumped to a tank and mixed with the previous stage thickener with a solid content of 50%.

Barren solution from the Merrill-Crowe circuit is pumped to a slurry/solution mix tank under the last CCD thickener tank, as a washing solution. The first thickener overflow, the pregnant solution, flows by gravity to the pregnant solution tank.

Pregnant solution is pumped to pressure leaf clarifiers to remove suspended solids. Clarified pregnant solution is transferred immediately to the de-aeration tower MerrillCrowe process. The de-aerated solution is mixed with zinc dust (for gold and silver to be precipitated) and pumped to a filter press in the refinery area. After being pressed in the filter, the barren solution is pumped to a tank to be used for washing.

When filters are caked with solids, they are taken out of operation to be cleaned. The cakes are dried, and fluxes are added before further refinement in an induction furnace to produce doré bars.

CCD thickener number 5 underflow is pumped to a hypochlorite cyanide destruction tank; from this tank the slurry flows by gravity to the tailings impoundment.