8th Nov 2021 09:57
(Alliance News) - Polymetal International PLC's board on Monday approved the construction of the Veduga gold project in the Krasnoyarsk region of Russia, which is set to produce for the next 20 years.
The Anglo-Russian precious metals mining company said it dropping a USD447 million investment into the 4.0 million ounce asset, with first production expected in the second quarter of 2025.
"The large high-grade reserve base, robust economics, and clear execution path to significant cash flows underpinned the board's decision to approve Veduga", said Chief Executive Vitaly Nesis. "The management is currently planning a full consolidation of the asset in first half of 2022".
Polymetal currently owns 60% stake in Veduga and holds a call option to increase its stake to 100% at a pre-determined price. The remaining 40% stake is held by Russian investment bank VTB Bank after it invested USD71 million in the project in April last year.
"Following the final statutory clearance which is expected in the second quarter of 2022, Polymetal plans to fully consolidate the asset," the company said.
Total project capital expenditure is estimated at USD447 million. This includes a post-launch skip shaft and underground infrastructure construction of USD77 million between 2027 and 2029.
The mine will rely on hydro power ensuring relatively low emission intensity level, Polymetal noted.
The mine plan assumes 10 years of conventional open-pit mining until 2031 and 12 years of underground mining from 2030 to 2041.
Polymetal shares were up 2.1% to 1,394.50 pence each in London on Monday morning.
By Greg Roxburgh; [email protected]
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