Polymetal Announces Results of Feasibility Study
OREANDA-NEWS. August 13, 2010. JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”) is pleased to announce the successful completion of the Feasibility Study (''FS'' or the ''Study'') for the Mayskoye gold project supported by independent audit, and the start of construction of a processing plant at the mine site, reported the press-centre of Polymetal.
HIGHLIGHTS
The Feasibility Study prepared by Polymetal Engineering and audited by Snowden Mining Industry Consultants Inc. (“Snowden”) demonstrates that the Mayskoye gold project is technically and economically feasible
Total Resources are 7.5 Moz of gold contained in 25 Mt of mineralized material at an average grade of 9.3 g/t. The resource base has been delineated to a maximum depth of 850 meters below the surface with most of the modeled mineralized zones remaining open at depth
Probable Reserves (estimated at a long term gold price of USD900/oz) are 2.4 Moz of gold contained in 7.9 Mt of ore at an average grade of 9.6 g/t, which is sufficient to support a 13 year mine life
The Company believes that there is a significant potential for increase in Reserves and the mine life based on the fact that 16 Mt of mineralized material falls into the category of Inferred Resources and that, based on 2006-2010 in-fill drilling results, the conversion rate of Inferred Resources into Measured and Indicated categories (which, in turn, form the basis for Proven and Probable Reserves) was approximately 80%
The FS envisions mostly underground mining of sulfide ore at a rate of 700 Ktpa with conventional flotation on-site followed by transportation of the concentrate to Amursk for further processing at the Company’s POX facility
Polymetal believes that the key assumptions in the Study (such as gold price, concentrate mass pull, and dilution) are conservative, and therefore has made a decision to build a concentrator with annual throughput of 850 Ktpa, which is approximately 20% more than the level envisioned in the Study
At a mining and processing rate of 850 Ktpa, average gold production is expected to be in excess of 200 Koz per year during the mine life with total cash costs in the range of USD500-550 per ounce of gold
The total pre-production capital expenditures for the project are estimated at USD170 million with further USD140 million to be invested over the life of mine (from 2013 on) mostly on underground development and maintenance CAPEX
The construction at Mayskoye commenced in May 2010 with first ore from stopes expected by the end of 2010 and the commissioning of the processing plant in Q1 2012. Polymetal expects to ship first concentrate to Amursk and pour first gold from the project in Q4 2012. The Company plans to reach full mining and processing capacity in 2013
“We are pleased with the results of the Feasibility Study and its audit. It demonstrates the viability of our strategic growth plans,” said Vitaly Nesis, CEO of Polymetal. “Mayskoye is a high-grade long-life project with outstanding optionality which should further strengthen the economics of Polymetal’s POX hub in Amursk.”
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