Polymetal Begins Building Nezhda Gold Mine in Russia
Average annual production is planned at 180,000 ounces (oz) during the first three full years of operation and 155,000 oz during the first 15 years. First production is planned for the fourth quarter of 2021, with full ramp-up by the second quarter of 2022. The Nezhda project is located approximately 480 kilometers (km) east of the city of Yakutsk. It is accessed by an all-season unpaved road, but has no grid connection. The climate is characterized by long severe winters and short hot summers. The relief is moderately mountainous, with relative altitudes above valley floors not exceeding 600 meters (m).
Processing will be through a con ventional 1.8-million-metric-tons-per-year (mt/y) flotation concentrator that will include a gravity concentration circuit. Combined recovery to concentrate of 85% is supported by extensive external and in-house metallurgical testing. Gravity gold concentrate will be processed at Polymetal’s Amursk pressure oxidation facility, while flotation concentrates will be sold to third parties. Preproduction capital expenditures are estimated at $234 million, including capitalized pre-stripping costs. Total cash costs of production for the open pit are estimated in the range of $620 to $670/oz, and all-in sustaining cash costs are estimated in the range of $700 to $750/oz.
The Nezhda deposits includes recoverable silver. Reserves and resources are reported in gold equivalent ounces. Proved and probable ore reserves currently stand at 38 million mt at an average grade of 3.6 g/mt gold equivalent, containing 4.4 million gold equivalent oz. Open-pit reserves total 3.1 million oz and currently account for 70% of total reserves. The Nezhda mine plan calls for five open pits to be mined over 19 years by conventional drill-and-blast, truck-andshovel methods, with a subsequent gradual switch to underground mining, which will last for 17 years. Total expected mine life currently stands at 27 years, which can potentially be increased by another 10 years, following additional exploration to improve confidence in the remaining mineral resources.
Open-pit mining volumes are currently planned at 2.2 million mt/y of ore at an average stripping ratio of 9:1 waste to ore. The underground mine will utilize long-hole stoping with partially consolidated backfill, a method currently used to good effect by Polymetal at its Albazino mine. The Nezhda concentrator will have throughput capacity of 1.8 million mt/y. The flowsheet includes crushing, twostage grinding, and gravity and flotation concentration. Flotation concentrates will be thickened, filtered, dried and bagged for off-site processing. Tails will be thickened, filtered and dry stacked in a fully lined tailings storage facility.
“Nezhda is a long-life, high-grade asset with robust economics,” Polymetal CEO Vitaly Nesis said. “The project is capital light and will rely heavily on our successful experience at our Kyzyl mine in Kazakhstan. Nezhda will contribute to dividends per share beginning in 2022.” Polymetal is a public company listed on the London Stock Exchange. Its production in the six months to June 30 totaled 619,000 gold equivalent oz from mines in Russia, Kazakhstan and Armenia. Full-year 2018 production is forecast at 1.5 million oz.