Russian gold mining company Polymetal is continuing to advance its noncore asset disposals, announcing on Monday the sale of its North Kaluga property for a total of $27-million.
North Kaluga is a polymetallic deposit located in the Sverdlovsk region of Russia. The property's mineral resources comprise copper, gold, zinc and silver, with most of the value attributable to copper and gold.
The Joint Ore Reserve Committee-compliant reserves for underground mining stand at 212 000 oz of gold-equivalent at 12.9 g/t. The asset was marked as noncore owing to its small size, short life-of-mine and lack of spare capacity at the future flotation circuit at Voro.
“The North Kaluga deal brings us some cash and retains exposure to commodity prices,” said Polymetal CEO Vitaly Nesis.
The transaction consideration consists of a $10.7-million fixed upfront cash payment, 5% net smelter royalty (NSR) and 50% royalty on excess revenue. The fair value of the royalties is estimated at $13.5-million.
The NSR and the excess revenue royalty are capped at $300-million.
The new owner will also repay all debt owed by North Kaluga's licence holder to Polymetal at the transaction completion date, currently at $2.8-million.