30th Jun 2020 13:46
(Alliance News) - Polymetal International PLC on Tuesday said the Far East & Arctic Development Fund and Credit Bank of Moscow will finance construction of a grid power line for the company's Nezhda gold project in eastern Russia.
The miner expects the grid connection to reduce all-in power cost of the project to RUB10, or GBP0.11, per kilowatt-hour from RUB16 compared to in-house generation from diesel.
"Grid power enhances the economics of Nezhda and drastically reduces its environmental footprint", said Polymetal Chief Executive Vitaly Nesis.
The power line will be built, owned and operated by grid management company UVES LLC. Upon the construction completion scheduled for second quarter of 2022, the facility will be leased out to Polymetal.
The grid construction project is expected to cost RUB6.0 billion, about GBP68.6 million, of which RUB5.5 billion will be funded with the Far East & Arctic Development Fund's 10-year senior loan and RUB1.7 billion with the Credit Bank of Moscow's five-year subordinated loan facility.
Polymetal will grant a guarantee for the Far East & Arctic Development Fund loan, as well as guarantee payments under the lease agreement to UVES.
The Far East & Arctic Development Fund is a Russian state-owned fund providing long-term preferential financing.
Shares in Polymetal were up 0.1% at 1,591.50 pence each in London on Tuesday afternoon.
By Tapan Panchal; [email protected]
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