POLY Polymetal International Plc

 
 Polymetal International plc (POLY) 
Polymetal: Kutyn construction approval 
 
06-Oct-2020 / 09:00 MSK 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY 
Date         6 October 2020 
 
Polymetal International plc 
 
           Kutyn construction approval 
 
Polymetal announces that the Board of Directors has approved construction of 
           the US$ 80 million Kutyn project. 
 
    "After thorough evaluation the Board has concluded that Kutyn belongs in 
 Polymetal's asset portfolio. The key factors behind this decision are quick 
  and capital-light path to significant free cash flows as well as potential 
 for a long mine life as a part of the Albazino hub", said Vitaly Nesis, CEO 
           of Polymetal. 
 
           PROJECT Highlights 
 
? JORC-compliant Ore Reserves for Kutyn (using US$ 1,300/oz gold price) as 
at 1 October 2019 are estimated at 8.4 Mt of oxide ore with an average 
grade of 3.0 g/t containing 0.812 Moz of gold (please see our recent press 
release for more details at the link [1]). 
 
? Conventional open-pit mining will commence with pre-stripping in Q3 
2021, with first ore mined in Q1 2022. The average life-of-mine (LOM) 
stripping ratio is 8 t/t. Ore will be processed through the 1.3 Mtpa heap 
leach facility followed by the Merrill-Crowe process. Average LOM gold 
recovery is 71%. 
 
? LOM gold production is expected to comprise 575 Koz. Average annual 
output from 2023 to 2028 is estimated at roughly 90 Koz with an average 
AISC of US$ 590/oz. First gold is expected to be produced in Q2 2023. 
 
? Polymetal acquired the asset in February 2011 for US$ 65.5 million in 
shares (when the gold price stood at US$ 1,400/oz). The Company 
subsequently spent US$ 55 million on exploration and site infrastructure 
in 2012-1H 2020. Remaining initial project capital expenditures (from 2H 
2020) are estimated at US$ 80 million. 
 
? Project IRR (net of sunk costs) stands at 29% at US$ 1,200/oz rising to 
42% at US$ 1,500/oz. NPV is estimated at US$ 79 million and US$ 157 
million at US$ 1,200/oz and US$ 1,500/oz gold price respectively. 
 
? Mineral Resources of Kutyn (additional to Ore Reserves) as at 1 October 
2019 amount to 6.6 Mt of oxide and refractory ore for both open-pit and 
underground mining with an average grade of 3.7 g/t representing 0.785 Moz 
of gold contained. 
 
? Detailed in-house m etallurgical studies confirmed viability of 
processing refractory ore from Kutyn at the Albazino concentrator with 
subsequent POX at Amursk. JORC-compliant estimate of refractory reserves 
is planned for Q1 2023 following completion of the extensive drilling 
campaign of 50 km and preparation of the feasibility study. 
 
? The asset's production and financial results will be reported as a part 
of Albazino-Amursk segment. 
 
? The development of Kutyn will not result in changes to the current 
production and CapEx guidance. Incremental production from Kutyn will 
compensate for the decline at Albazino. Geotechnical conditions at 
Albazino underground are challenging and the management decided not to 
proceed with the project to double underground mining capacity to 1.2 
Mtpa. CapEx reduction stemming from this decision will balance increased 
spending at Kutyn. Albazino mill will continue to have 100% utilization 
thanks to the introduction of low-grade historic stockpiles into the feed. 
 
           ABOUT KUTYN 
 
   Kutyn deposit is located in the Tugur-Chumikan District of the Khabarovsk 
     Territory, Far East Russia, 114 km north-west of the Albazino mine. The 
      Kutyn site can be accessed using a winter road from Albazino or by sea 
      through the seasonal port of Ulban on the Sea of Okhotsk. The combined 
           mining and exploration license covers an area of 120 km2. 
 
Tugur-Chumikan District has a population of more than 2,500 people including 
   1,579 people of Indigenous Minorities of the North. The project will have 
positive social impacts in the region of operation as more than 300 new jobs 
covered by collective agreement will be created. Polymetal is also committed 
   to contribute towards development of local communities via investments in 
    infrastructure, running education programmes, sport and cultural events. 
 
    Kutyn will employ dry stacking of tailings, which is the safest tailings 
           storage technology. 
 
           About Polymetal 
 
  Polymetal International plc (together with its subsidiaries - "Polymetal", 
   the "Company", or the "Group") is a top-10 global gold producer and top-5 
    global silver producer with assets in Russia and Kazakhstan. The Company 
           combines strong growth with a robust dividend yield. 
 
           Enquiries 
 
Media                     Investor Relations 
 
FTI          +44 20 3727  Polymetal ir@polymetalinternational.com 
Consulting   1000 
 
                          Evgeny    +44 20 7887 1475 (UK) 
Leonid Fink               Monakhov 
 
Viktor                    Timofey 
Pomichal                  Kulakov 
 
                                    +7 812 334 3666 (Russia) 
 
                          Kirill 
                          Kuznetsov 
 
Joint Corporate Brokers 
 
Morgan       +44 20 7425  RBC       +44 20 7653 4000 
Stanley &    8000         Europe 
Co.                       Limited 
Internationa 
l plc 
 
                          Marcus 
                          Jackson 
Andrew 
Foster 
 
                          Jamil 
                          Miah 
Richard 
Brown 
 
Panmure 
Gordon 
             +44 20 7886 
             2500 
 
Daniel 
Norman 
 
John Prior 
 
Forward-looking statements 
 
       This release may include statements that are, or may be deemed to be, 
"forward-looking statements". These forward-looking statements speak only as 
        at the date of this release. These forward-looking statements can be 
   identified by the use of forward-looking terminology, including the words 
         "targets", "believes", "expects", "aims", "intends", "will", "may", 
   "anticipates", "would", "could" or "should" or similar expressions or, in 
each case their negative or other variations or by discussion of strategies, 
plans, objectives, goals, future events or intentions. These forward-looking 
      statements all include matters that are not historical facts. By their 
    nature, such forward-looking statements involve known and unknown risks, 
 uncertainties and other important factors beyond the company's control that 
  could cause the actual results, performance or achievements of the company 
 to be materially different from future results, performance or achievements 
           expressed or implied by such forward-looking statements. Such 
  forward-looking statements are based on numerous assumptions regarding the 
     company's present and future business strategies and the environment in 
which the company will operate in the future. Forward-looking statements are 
     not guarantees of future performance. There are many factors that could 
   cause the company's actual results, performance or achievements to differ 
     materially from those expressed in such forward-looking statements. The 
company expressly disclaims any obligation or undertaking to disseminate any 
  updates or revisions to any forward-looking statements contained herein to 
 reflect any change in the company's expectations with regard thereto or any 
  change in events, conditions or circumstances on which any such statements 
           are based. 
 
ISIN:          JE00B6T5S470 
Category Code: MSCM 
TIDM:          POLY 
Sequence No.:  85459 
EQS News ID:   1139022 
 
End of Announcement EQS News Service 
 
 
1: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=76b8670494afc3c425f97a67900efe1b&application_id=1139022&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

October 06, 2020 02:00 ET (06:00 GMT)

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