JOHANNESBURG (miningweekly.com) - London-based gold mining company Petropavlovsk on Monday announced that its reserves have increased by about 8%, before depletion, and its resources by about 6%, before depletion, as at December 31.

This forms part of the results of a review of gold ore reserves and mineral resources, which highlighted a 1.17-million-ounce increase in Joint Ore Reserves Committee- (Jorc-) compliant resources (before depletion), mainly as a result of successful exploration of underground and openpit targets at Pioneer and Albyn.

The company also reported a 660 000 oz increase in Jorc-compliant nonrefractory reserves, mainly as a result of the new reserves at the company's two flagship mines - Pioneer and Albyn.

Meanwhile, the first Jorc-compliant reserves and resources have been identified at the recently discovered, highly promising nonrefractory deposit Katrin, within the Pioneer licence area. However, the company noted that the Katrin orebody remains open in down-dip and western directions where exploration drilling continues. A further resource increase is expected in 2018.

"Petropavlovsk has a long history of exploration success, which is a credit to the capability of the exploration team. Our 2017 drilling programme has resulted in the addition of over one-million ounces of gold to total group resources, of which over half a million ounces are reserves," Petropavlovsk chairperson Ian Ashby commented.

Ashby further highlighted that this provides the group with additional high-grade ore to mine as Malomir is transitioned to refractory production, which will assist in smoothing the company's production profile as Petropavlovsk completes the construction stage of the POX Hub, which is due to begin commissioning in September this year.

"These additions give us further confidence in our ability to generate positive cash flows during the final period of the current capital expenditure programme," he added.

However, in the medium term, there remains significant prospectivity at Albyn, Malomir and Pioneer for additional nonrefractory and refractory gold to be discovered, contributing to the company's existing reserves and resources of over 20-million ounces.

The exploration programme, Ashby noted, remains focused on brownfield activities as an effective way to maximise the value of group production facilities for the longer term, and focused on high-grade targets as a means of optimising cash flows to deleverage the balance sheet.

"The progress made in 2017 provides a strong platform for further exploration success in 2018, and we look forward to providing regular updates as the drilling programme progresses," Ashby concluded.

All group mining and exploration assets are located in the Amur region in the Far East of the Russian Federation, and Petropavlovsk operates four gold mines - Pioneer, Albyn, Malomir and Pokrovskiy.

The company also controls the Tokur project, which remains on hold awaiting further exploration and development into production.