2nd Sep 2014 06:45
LONDON (Alliance News) - Polymetal International PLC Tuesday outlined its plans for a slew of its gold projects, confirming plans to proceed with the construction and development of the Svetloye gold project and terminating or slowing development at three other sites ahead of the acquisition of the Kyzyl project.
The Russia and Kazakstan-focused precious metals producer said the forthcoming acquisition of the Kyzyl gold project in Kazakhstan has resulted in it having to re-prioritise its project pipeline in order to focus capital and management resources on key sites and maintain a robust leverage level.
The group said in May it would buy Altynalmas Gold Ltd, the holding company for the Kyzyl gold project, for up to USD1.12 billion in cash and shares in a move that would increase its reserves by 50%.
On Tuesday, it said it will continue with the construction and development of the Svetloye gold project in the Khabarovsk region of eastern Russia. Polymetal said the mine, a 1,000 kilo-tonnes per annum open-pit heap leach operation with an initial mine life of eight years, is a capital-light, low-risk project which would provide it with low-cost production and cash flows in the medium-term. Production at the mine is due to start in the third quarter of 2017 and is expected to run at nameplate capacity for the first full year, Polymetal said, meaning 1,000 kilo-tonnes.
Elsewhere, the company said it will terminate the development of the Albazino expansion project, also based in the Khabarovsk territory of eastern Russia, and will incorporate additional resources into the life of the mine with the existing processing capacity of the flotation plant at the site. It said it will consider resuming the expansion project at the site should sufficient capital availability exist.
Polymetal also said it will slow development of the Kutyn gold project, also in Khabarovsk, and of the Maminskoye project in the Sverdlovsk region of Russia. On Kutyn, Polymetal said it has ceased further exploration work and is focusing on completing a statutory permitting and pre-feasibility study by the close of the second quarter of 2015. In Maminskoye, the company has ceased exploration and postponed the pre-feasibility study.
"Following the acquisition of the Kyzyl project, we have re-prioritised our project pipeline in order to focus our resources most effectively on low-risk and low-capital projects where we see clear scope for production growth and good upside potential." said Vitaly Nesis, chief executive of Polymetal.
"Going forward, we will continue to take a flexible view regarding our portfolio of development projects and will keep these under review."
By Sam Unsted; [email protected]; @SamUAtAlliance
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