29th Apr 2016 12:04
LONDON (Alliance News) - Polymetal International PLC Friday unveiled the mineral resource estimate for its Lichkvaz project in Armenia as the company progresses its plan to merge the project with its newly-acquired Kapan asset.
Total underground mineral resources at Lichkvaz comprised 4.3 million tonnes of ore, averaging 4.2 grams per tonne for 0.6 million ounces of gold equivalent, Polymetal said.
Breaking that total resource down, the indicated resource stands at 2.8 million tonnes of ore graded at 3.7 grammes of gold equivalent whilst the inferred resource stands at 1.5 million tonnes of ore graded at 5.2 grammes of gold equivalent.
That means the total resource holds around 582,000 ounces of gold equivalent, with indicated resources accounting for 336,000 ounces with the inferred resource making up the remaining 245,000 ounces.
The resource was based on the 15,800 metres of drilling conducted by Polymetal spread over 70 diamond drill holes and was audited by independent consultancy firm CSA Global.
The project, located in the Syunik-Marz province in the south of the country, contains gold and copper alongside silver, which will be a by-product. Once operational, production will be transported to the Kapan concentrator for processing.
Polymetal only formally completed the acquisition of the Kapan gold mine on Thursday, originally struck in early March - and the miner is hoping the asset can become a regional processing hub which also has sizeable production. Polymetal paid USD10.0 million in cash and USD15.0 million in shares to settle the Kapan deal.
That USD15.0 million was settled through the issue of 1.5 million new shares at USD10.12 each to the seller, Dundee Precious Metals Inc. That issue price equates to 693.0 pence per share and the shares represent around 0.35% of Polymetal's enlarged issued share capital.
Polymetal shares were trading up 0.4% on Friday afternoon at 708.0 pence.
Next, the company plans to undertake "significant additional drilling" at the project with the objective of producing a Joint Ore Reserves Committee compliant ore reserve estimate and combined life-of-mine plan for Lichkvaz and the Kapan concentrator in the third quarter of 2017.
Kapan already has an indicated and inferred resource estimate which stands at 15.9 million tonnes, containing around 1.4 million ounces of gold, 24 million ounces of silver, 80,000 tonnes of copper and 270,000 tonnes of zinc, which will be merged with the estimate at Lichkvaz.
"We are very pleased with the results of exploration and audit work at Lichkvaz. This is an important contribution towards our production expansion at the nearby Kapan concentrator", said Chief Executive Vitaly Nesis.
"The asset displays consistently high grades and relatively simple geology while retaining further significant exploration potential," he added.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews. Updated by Joshua Warner; [email protected]; @JoshAlliance
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