Polymetal's Kyzyl mine.
The new Kyzyl mine in Kazakhstan has exited the commissioning phase and has successfully produced its first gold concentrate, LSE-listed Polymetal announced on Tuesday.
The start-up of the concentrator, which is now entering a three-month ramp-up period, was achieved one quarter ahead of the original 2014 schedule and one month earlier than the timeframe provided in January this year.
The mine was also delivered about 3% below the original $325-million budget, Polymetal said in a media release.
The Kyzyl concentrator is expected to reach nameplate capacity of 150 000 t/m and recoveries of 86% by October. The miner expects to produce 80 000 oz of payable gold from Kyzyl this year. Output will ramp up to 280 000 oz in 2019 and 330 000 oz thereafter, at an all-in sustaining cost of $500/oz to $550/oz.
"Polymetal is delighted and proud to successfully complete the largest development project in the company's history ahead of time and below budget," said CEO Vitaly Nesis.
"Significant cash flow and net income contributions from Kyzyl should start in the fourth quarter of 2018," he added.
The gold reserves at Kyzyl are estimated at 7.3-million ounces at 7.7 g/t gold. This supports a life-of-mine of ten years for the openpit, followed by a further 14 years of underground mining. Additional gold resources comprise 3.1-million ounces at 6.8 g/t indicating strong potential to further extend operations.