The transaction is an asset swap only and does not entail any additional payments or deferred considerations. It is expected to close in the second quarter of 2018 and is subject to statutory approvals and other customary conditions. The East Tarutin license area being acquired by Polymetal is situated on the Kazakh side of the border, as is the company’s Varvara processing plant. Ore haulage distance to Varvara from East Tarutin is 110 km, as compared to 150 km from Tarutin on the other side of the border.

“East Tarutin represents a much better fit for Polymetal in terms of logistics and potential size of reserve,” Polymetal Group CEO Vitaly Nesis said. “This asset swap simplifies operational management of the Varvara hub and avoids the complications of cross-border ore shipment while preserving significant exploration optionality.” East Tarutin is a copper-gold skarn-type deposit with vein-disseminated mineralization. Infrastructure in the region is well developed, with easy access to the electricity grid, the railway, and paved highways.

Previous owners have completed 18 km of diamond drilling at the property. JORC-compliant mineral resources are estimated at 6.4 million metric tons (mt) grading 1.06% copper and 0.07 grams (g) per mt of gold. Polymetal plans to resume exploration at East Tarutin in 2018-2019 and to complete a JORC-compliant reserve estimate in the first half of 2020. The Tarutin license area being acquired by Russian Copper has estimated reserves of 4.6 million mt of ore at 1.39% copper and 0.09 g/mt of gold based on the Russian system for reporting mineral resources and reserves. The company did not comment on its plans for the deposit.