REG-Polymetal International plc Polymetal: Kutyn construction approval

Polymetal International PKAnnouncement

06/10/2020 07:00

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   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.

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   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  1 link).
     • 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  metallurgical   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
                                  Polymetal
                                              2 ir@polymetalinternational.com
   FTI Consulting                 Evgeny
                          +44 20  Monakhov   +44 20 7887 1475 (UK)
   Leonid Fink            3727
                          1000    Timofey     
   Viktor Pomichal                Kulakov
                                             +7 812 334 3666 (Russia)
                                  Kirill
                                  Kuznetsov
       Joint Corporate Brokers         
                          +44 20
   Morgan Stanley & Co.   7425
   International plc      8000

   Andrew Foster                  RBC Europe
                                  Limited
   Richard Brown           
                                  Marcus     +44 20 7653 4000
   Panmure Gordon                 Jackson

   Daniel Norman                  Jamil Miah

   John Prior             +44 20
                          7886
                          2500

   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.

    

    

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   ISIN:          JE00B6T5S470
   Category Code: MSCM
   TIDM:          POLY
   Sequence No.:  85459
   EQS News ID:   1139022


    
   End of Announcement EQS News Service

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    3 fncls.ssp?fn=show_t_gif&application_id=1139022&application_name=news&site_id=refinitiv2

References

   Visible links
   1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=76b8670494afc3c425f97a67900efe1b&application_id=1139022&site_id=refinitiv2&application_name=news
   2. mailto:ir@polymetalinternational.com


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