Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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While we do not plan to enter the stock exchange

"Any business, regardless of size, requires careful monitoring and attention that agriculture is that gold"

The growth of Pavlik, other stages of gold mining development based on optimism of geologists and future prices for precious metals, as well as interest in rare-earth metals and agriculture at the Eastern Economic Forum in Vladivostok was told in an interview with Arlan Investment Company CJSC Elena Nesterova and Financial Director of PAVLIK AO Alexander Dorogov.

While we do not plan to enter the stock exchange

The growth of Pavlik, other stages of gold mining development based on optimism of geologists and future prices for precious metals, as well as interest in rare-earth metals and agriculture at the Eastern Economic Forum in Vladivostok was told in an interview with Arlan Investment Company CJSC Elena Nesterova and Financial Director of PAVLIK AO Alexander Dorogov.

- You launched a full-fledged mine at the Pavlik gold field site. How much do you estimate the total investment?

Elena Nesterova: The investment amounted to 550 million dollars. Until the end of the year, we plan to extract about 2 tons of gold, and in 2016 to reach the designed capacity - 4 million tons of ore and about 7-8 tons of gold.

- What is the cost of mining and producing an ounce of gold today?

Alexander Dorogov: Now, at the commissioning stage, within 800-900 dollars. In the following year, due to an increase in processing volumes and an increase in the gold content in the ore, this is slightly more than 400, and in general, the cost of production (TCC) for the project will be about 520 dollars per ounce.

- That is, we can say that the current world price of gold (1100 USD / ounce) is comfortable for the company?

Elena Nesterova: It is completely comfortable and allows you to fully service debt obligations.

- Before 2020, you plan to invest another 800 million dollars and expand production to 20 tons of gold per year. Will it be independent factories "Pavlik-2" and "Rodionovskoe"?

Alexander Dorogov: As for Rodionovsky, this is definitely an independent factory, because the deposit is located at 60 kilometers from Pavlik. As for Pavlik-2, two options are considered. Now they are at the stage of engineering studies, because there are first results on the development of technology at the operating facility. Depending on what the final results are, we will decide whether it will be an extension of today's Pavlik, or it will be the construction of a new factory.

Elena Nesterova: "Arlan" manages the deposits in the territory of the Magadan Region - these are the Pavlik, Rodionovskoe, Utinskoye, Shakhskoye and Burkhalinskoe deposits. We have a phased development strategy for each of the fields. “Pavlik” we launched and mined the first gold, now we are planning to make a program of geological exploration according to “Rodionovsky”. All the other licenses will be developed already as the Pavlik and Rodionovskoye projects are implemented.

- How can the dynamics of gold prices affect your plans?

Alexander Dorogov: Of course, we depend on the price and, first of all, we are dependent on the development of the following projects - Pavlik-2 and Rodionovskoye. Yes, this may affect our plans, but we are optimists, we expect that there will be some slight rise from the current price level.

- For many manufacturers in the world, the psychological price limit is 1000 dollars per ounce?

Alexander Dorogov: At least for us, we can say for sure that this is not the level of price at which problems arise for operating activities. Yes, many companies already at the current price level reduced the costs of exploration and development of new deposits, in fact, absolutely everything was done. Therefore, we hope that the price will not fall further.

- Are the materials on the Utinskoye deposit reserves approved by the company in December last year approved?

Elena Nesterova: According to Utinsky, there is a program for calculating reserves, at the moment geologists are engaged in this program.

- Do you consider the actual output of 500 tons of gold?

Elena Nesterova: Yes, we believe it is realistic to access reserves of 500 tons of gold, because our geologists and all assumptions say that at the moment Pavlik has 150 tons of reserves and 100 tons of resources. We are planning a drilling program in order to approve reserves at Pavlik in the amount of 400 tons of gold and on Rodionovsky - 100 tons, that is consolidated Pavlik-1, Pavlik-2 and Rodionovskoye will amount to 500 tons Of gold.

- How much does the company spend annually on geological exploration?

Elena Nesterova: Perhaps it is advisable to say how much we spent on Pavlik and plan to spend on Pavlik-2 and Rodionovskoye in terms of counting reserves and approving a feasibility study for permanent conditions. According to "Pavlik" we drilled 100 thousand running meters, according to "Pavlik-2" we plan to drill up to 50 thousand and on "Rodionovsky" about 80 thousand.

Alexander Dorogov: In general, the exploration program that needs to be done on Pavlik-2 and on Rodionovsky is about 20-25 million dollars. It is clear that this is not for one year, because such a volume is difficult to accomplish right away. This is a long process and our geologists are optimistic about the transfer of resources into reserves.

- For what period of your life do you count your enterprises?

Elena Nesterova: Now we have extended the license of "Pavlik" to 2046 year, this is for the period of processing 153 tons of gold. Taking into account the increase in reserves, we plan to extend the deposit over 40 years.

- How do you see Arlan at 2020-2025?

Elena Nesterova: Arlan is a very mobile company. The company has implemented many large investment projects. Often they turn to us and offer new interesting projects. It all depends on the situation. Perhaps, we will be a major strategist in terms of gold, because our plans are rather aggressive: to achieve annual production of 2019 tons by 20, this corresponds to the fifth place among gold mining companies in Russia. At the same time, we are an investment company. In addition to gold, we also invest in agriculture. What is the next niche, or the market will appear for us, we can not predict.

- How in one company get on such different areas as gold mining and agriculture?

Elena Nesterova: Any business, regardless of size, requires careful monitoring and attention that agriculture has that gold. As for agriculture, we were present in the Smolensk region for 20 years. We had agricultural land in passive form. In 2009, it was decided to develop agriculture, we built a dairy farm and now we plan to increase the capacity four times.

- Do you plan to produce other metals, for example, platinum - diversify production?

Alexander Dorogov: At the moment we do not have a license related to platinum, so far. Historically, platinum has always been worth more than gold. But in the past few years, we see the opposite situation, when gold began to cost more than platinum. It is not clear how it will be.

Elena Nesterova: I consider the subject of rare earth metals to be interesting, because most of the deposits of these metals are located in the territory of the former USSR countries - Russia, Kyrgyzstan, Armenia. First, these are significant investment projects. Secondly, there are difficulties associated with licensing.

- Could you tell us about the chain of interaction between your structures?

Elena Nesterova: We do not have a legal group. ZAO Investment Company "Arlan" is a management company located in Moscow. She deals with the control, financing and management of companies that are located both in the Magadan and Smolensk regions.

- Do you plan to bring shares of Pavlik to the Moscow Stock Exchange?

Elena Nesterova: The question is interesting. At the moment we are on an investment phase, all efforts are directed to reaching the designed capacity. While we do not plan to enter the stock exchange.

Alexander Dorogov: We must first open all the potential. The very process of taking stock takes one and a half to two years.

Elena Nesterova: Why should we now go to the stock exchange with undisclosed potential and be placed at a price with a substantial discount, if you can go out already having 20 tons of annual gold production. Then the cost of accommodation will be completely different.

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