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Mining company Polymetal evaluated the gold reserves of the Svetloe deposit

Polymetal announced the successful completion of the audit of the resources and reserves of the Svetloye gold deposit, produced by Snowden Mining Industry Consultants.

The Svetloe deposit is located in the Okhotsky district of the Khabarovsk Territory at 240 km from Okhotsk. The field was discovered in 1973 year, and Polymetal acquired a license to conduct exploration and production at Svetly in December 2010 for $ 9,25 million.

The ore reserves of the Svetloye deposit are estimated in accordance with the JORC 2012 Code at 7,3 mn t of ore with a gold grade of 2,8 g / t, containing 0,7 mn gold ounces. Mineral resources (in addition to ore reserves) are estimated at 1,1 million tons of ore with a gold grade of 2,3 g / t containing 0,1 million ounces of gold.

The preliminary feasibility study provides for a project for the development of an open pit with a capacity of 1 million tons of ore per year, followed by ore processing. The initial life of the field is 8 years. Average annual production at Svetly is expected to be 70 ounces of gold, with a total cash cost of $ 750–800 per ounce of gold. Total capital expenditures prior to operation are estimated at $ 90 million.

The internal rate of return of the project is estimated at 44% at the price of gold at $ 1250 per ounce, the price of Brent crude oil at $ 110 per barrel and the exchange rate of the ruble to the US dollar 33 rubles per dollar. The internal rate of return of the project at a gold price of $ 1000 per ounce is estimated at 23%.

The board of directors of Polymetal is expected to review the project in the third quarter of 2014. If a positive decision is made to start the development of the field, construction will begin in the 2015 year, and the start of production is expected in the third quarter of the 2017 year.

“Svetloye is a non-capital-intensive project with a low level of risk, capable of providing Polymetal with low-cost production and cash flow in the medium term,” said Vitaly Nesis, CEO of the company, according to the company's press service.

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