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Polyus Gold postpones launch of Natalka Mining and Processing Plant due to lower inventory estimates for 55-65%

The company has already invested in the Natalka deposit 41,9 billion rubles. or about $ 1,2 billion

Polyus Gold transfers the commissioning of the Natalka GOK in the Magadan region indefinitely due to a downgrade in reserves at 55-65% to 11-14 million ounces of gold (to 435 tons), resources - by 15-20% to 48-50 million ounces (up to 1,56 thousand tons). This is stated in the message of the company with reference to preliminary data of geological exploration.

To date, the company has already invested in the Natalka deposit 41,9 billion rubles or about 1,2 billion dollars.

"The revision of the resource block model and the revaluation of mineral resources and ore reserves, which are currently underway, will be completed in January 2015," the company said in a statement.

Upon completion of the revaluation of the reserves of the Natalka deposit, non-cash write-offs of the book value of the asset are expected, which will be reflected in the company's financial results for 2014, which are scheduled to be published in March of 2015. The volume of write-offs remains to be determined, the company said.

Commissioning of the mining and processing plant at Natalka has already been transferred from the middle of 2014 to the middle of 2015 with an increase in the construction period of the enterprise. At the same time, a reassessment of the block model of the Natalka deposit was initiated. Independent consultants - Micromine Consulting Services and AMC Consultants Pty Ltd. - were involved in the relevant research.

Previous estimates of the Natalka mineral deposit base were based on the block model of the field from 2011 year, the international audit of which, in accordance with the requirements of the JORC 2004 code, was conducted in February 2012 by Micon International.

As a result of the application of more stringent requirements of the JORC Code 2012 (compared to the JORC Code of 2004), the resources and reserves of the Natalka field are expected to decrease significantly. "Taking into account the preliminary findings of the ongoing revaluation, the company intends to revise options for further development of the project, including the search for potential partners for its implementation," - said in a statement.

Construction work at the site will be significantly slowed down until a decision is made on the future strategy for the project.

Natalka is one of the largest undeveloped gold deposits in the world. The total cost of the project was previously estimated at 1,5 billion dollars. Natalka is developing the largest gold producer in Russia - Polyus Gold, whose 40,2% of shares are controlled by Suleiman Kerimov.

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