On May 20, Hilway Metals Mining announced it has successfully extended the mining license for its Tulkubash/Kyzyltash gold project in Kyrgyzstan through 2062, a 30-year extension from the original expiry date of 2032. This key milestone not only triggered a $60 million contingent payment but also marks the project’s official transition from acquisition to substantive development, representing a critical step in its Central Asian strategic expansion.
The project was acquired in January of this year when Hilway purchased a 70% interest in the Kyrgyz company Chaarat ZAAV (ZAAV) for $162 million in cash. It is located in the Western Tianshan gold belt, a world-class metallogenic province known for hosting giant gold deposits. Tulkubash/Kyzyltash is one of the largest undeveloped gold deposits in this belt, with excellent resource endowment and significant growth potential.
The asset package consists of two parts: a mining license area of approximately 7 km², which includes fully permitted gold deposits containing a total of 186 tonnes of gold and 644 tonnes of silver; and an adjacent exploration license area of 27.42 km², covering the Karator and Ishakuld gold zones, where the Karator deposit has an indicated resource estimate of 6 tonnes of gold.
The project is planned for two-phase development:
- Phase I focuses on the Tulkubash oxide ore, with a planned investment of $150 million to build an open-pit mine processing 4 million tonnes of ore per year using heap leach technology. Upon commissioning, average annual gold production is expected to be 3.4 tonnes over a mine life of 3–4 years.
- Phase II is expected to proceed to the Kyzyltash sulfide zone around 2028, with a planned investment of $400 million and a mine life exceeding 18 years. At full capacity, average annual gold production could rise to 7 tonnes, becoming a core profit pillar.
In terms of scale, this is Hilway’s largest overseas acquisition to date, and it will reshape the company’s revenue structure – with the gold segment gradually forming a dual-driver alongside its traditional silver business.
Notably, the transaction structure includes a joint venture between Hilway and Kyrgyzstan’s state mining company Kyrgyzaltyn. Under the shareholders’ agreement, Hilway holds a 70% interest and acts as operator, while Kyrgyzaltyn holds a 30% free-carried interest (i.e., no capital contribution required but entitled to dividends). This arrangement is particularly significant in Central Asia, where geopolitical risk is often the largest variable in mining investment. By bringing in a state partner and directly aligning government interests with project success, this structure provides political assurance for long-term stable operation.
Financially, the payment triggered by the license extension has been largely clarified: Hilway has paid
60millionincash,withanother10 million payable upon achieving other milestones. The previously announced
162millioncashacquisitionfor70232 million. Hilway’s strong operational fundamentals provide a sufficient financial cushion for this medium- to long-term expansion. According to the company’s April results, full-year revenue for fiscal year 2026 (ended March 31) reached
438.1million,a47147.4 million, and a healthy balance sheet provides ample buffer for subsequent development.
According to Wisdom Financial News, this transaction marks a major breakthrough in Hilway’s geographic footprint and signals the company’s transformation from a primary silver producer to a diversified producer with Central Asian gold assets.
On the operational front, the project company ZAAV has held its inaugural general meeting and board meeting, appointing a general manager and chief financial officer nominated by Hilway, and formally approving the Phase I development plan for 2026–2027. The corporate governance structure is now in place. According to the current timeline, the Tulkubash oxide project is expected to produce first gold in 2027. With global gold prices at elevated levels, this production will bring significant incremental cash flow to Hilway and help reduce the company’s dependence on silver price fluctuations.
Post time: Jun-01-2026
