Polymetal CEO Vitaly Nesis
JOHANNESBURG (miningweekly.com) – LSE-listed gold and silver miner Polymetal on Monday published an initial ore reserve estimate for the Nezhdaninskoye (Nezhda) gold deposit, in Yakutia, reaffirming the project’s economic viability.
Nezhda, which is the fourth largest gold deposit in Russia, is estimated to have an openpit ore reserve of 15.5-million tonnes with an average gold-equivalent (GE) grade of 4 g/t for two-million ounces of GE contained.
Additional mineral resources are estimated at 55.9-million tonnes with an average GE grade of 5 g/t for 8.9-million ounces of GE contained.
Assuming 11 years of openpit mining from Ore Zone 1, the Nezhda property is expected to produce an average of 150 000 oz/y of payable gold in concentrate, at all-in sustaining cash costs of between $650/oz and $710/oz of GE and total cash costs of between $590/oz and $640/oz of GE.
Polymetal, which is aiming to complete a feasibility study for Nezhda by the end of 2018, estimates total capital expenditures to be $249-million, including pre-stripping costs.
Based on the current reserve estimate, Nezhda has a projected internal rate of return of 20% and a net present value of $132-million.
Polymetal said production could start in the first half of 2022, subject to a positive investment and development decision in the fourth quarter of 2018.
"I am pleased that the initial ore reserve estimate for Nezhda reaffirms its economic viability and justifies Polymetal's approach to developing the asset," said CEO Vitaly Nesis.
"With low capital intensity and significant low-cost production, Nezhda retains significant optionality which we will work hard on to incorporate in the development plan before our final investment decision".
Polymetal in July increased its stake in Nezhda to 24.7% and acquired an option to buy the remaining interest.
The company said it would focus on further exploration drilling for the conversion of resources into higher categories and the preparation of a feasibility study.