Russian mining giant Polymetal greenlights $447M investment in 4Moz Veduga gold project
(Kitco News) - Russia's Polymetal said today that its Board has approved a US$ 447 million investment in the 4.0 Moz Veduga gold project, a high-grade refractory gold deposit located in a prolific Northern Yenisey gold belt in the Krasnoyarsk Region, the top gold producing region of Russia.
The company added it anticipates the start of construction in Q3 2022, with first production expected in Q2 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 CEO Vitaly Nesis. "The management is currently planning a full consolidation of the asset in H1 2022".
The updated Ore Reserve estimate for Veduga as at 1 February 2021 comprises 31.9 Mt of ore with an average gold grade of 3.9 g/t containing 4.0 Moz of gold. This is a 50% or 1.3 Moz increase compared to the previous estimate.
The mine plan assumes 10 years of conventional open-pit mining until 2031 (including pre-production stripping in 2022-2024), and 12 years of underground mining using a skip shaft for hauling from 2030 to 2041.
Average LOM annual production is 200 Koz of gold at TCC in the range of US$ 725-775/oz and AISC in the range of US$ 800-850/oz. The project's IRR is estimated at 19% with NPV of US$ 292 million (using a 10% discount rate, US$ 1,500/oz gold price, RUB/USD exchange rate of 72).
Polymetal currently owns 59.4% stake in Veduga and holds a call option to increase its stake to 100% at a pre-determined price giving VTB a fixed rate of return on initial investment. Following the final statutory clearance which is expected in Q2 2022, Polymetal said it plans to fully consolidate the asset.
Polymetal International is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan.
By Vladimir BasovFor Kitco News
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