REG-Polymetal International plc Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January 2021
01/03/2021 07:05
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Polymetal International plc (POLY)
Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January
2021
01-March-2021 / 10:00 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 IMMEDIATE
time LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 01 March 2021
Polymetal International plc
Ore Reserves, Mineral Resources and Exploration update as at 1 January 2021
Polymetal announces its Ore Reserves and Mineral Resources as at 1 January 2021 in
accordance with the JORC Code (2012) and exploration update for the year ended 31
December 2020.
"We delivered maiden reserve estimates at several of our projects resulting in a
substantial increase in total Group Ore Reserves. We are confident in our ability
to continue per share reserve accretion while maintaining conservative price
assumptions", said Vitaly Nesis, Group CEO of Polymetal. "This year we are going to
significantly advance our greenfield exploration with the aim of extending resource
base at a relatively low finding cost".
2020 HIGLIGHTS
• In 2020, Group Ore Reserves increased by 10% year-on-year to 27.9 Moz 1 1 of
gold equivalent (GE) driven by initial Ore Reserve estimates at East Bakyrchik
(Kyzyl), Prognoz, and Pesherny (Voro hub). This has more than compensated for
depletion and ownership dilution at Veduga. GE Ore Reserves per share grew by
the same 10%.
• Share of Ore Reserves for open-pit mining stood at 53%, up by 2 percentage
points (p.p.) year-on-year, while share of refractory reserves amounted to 72%,
declining by 2 p.p. Both of these developments are attributable to Prognoz
reserve initial estimate.
• Share of silver in Ore Reserves increased by 5 p.p. to 11% also on the back of
the significant contribution from Prognoz.
• Mineral Resources (additional to Ore Reserves) declined by 14% year-on-year to
21.8 Moz of GE primarily due to resource-to-reserve conversion. This conversion
was partially offset by new Mineral Resource estimates at Albazino (Talgiy) and
Veduga. Mineral Resources inclusive of Ore Reserves were essentially stable at
49.7 Moz of GE.
• The average grade in Ore Reserves was marginally up year-on-year and stood at
3.8 g/t of GE. Average GE grade in additional Mineral Resources was down 10%
year-on-year. Polymetal GE grades continue to be one of the highest within the
sector globally.
• Polymetal maintained conservative price assumptions for both Ore Reserve and
Mineral Resource estimates at US$ 1,200/oz for gold and US$ 15/oz for silver.
Short-term price assumptions used for tactical mine planning and sequencing are
US$ 1,500/oz and US$ 20/oz respectively.
Ore Reserves and Mineral Resources summary (1), (2)
1 January 2021 1 January 2020 Change, %
Ore Reserves (Proved + Probable), gold 27.9 25.2 +10%
equivalent Moz
Gold, Moz 24.9 23.7 +5%
Silver, Moz 246.3 116.0 +112%
Average reserve grade, g/t 3.8 3.7 +0%
Ore Reserves per share, GE oz/per share 0.059 0.054 +10%
Mineral Resources (Measured + Indicated + 21.8 25.4 -14%
Inferred), gold equivalent Moz
Gold, Moz 19.5 20.3 -4%
Silver, Moz 191.9 337.7 -43%
Average resources grade, g/t 4.7 5.2 -10%
1. Ore Reserves and Mineral Resources from continuing operations. Lichkvaz, Oroch,
Sopka Kvartsevaya, Dalneye and Irbychan mines were classified as discontinued
operations as at 01.01.2020 and are not included in this estimate. Base metal
are not included in the 2021 GE calculation, while they were included in
calculation of the 2020 GE.
2. Mineral Resources are additional to Ore Reserves. Mineral Resources of platinum
group metals and rare earth metals are given separately and are not included in
the calculation of the gold equivalent. Discrepancies in calculations are due
to rounding
2021 OUTLOOK
In 2021, Polymetal will continue to invest in both near-mine and greenfield
exploration projects in order to increase Ore Reserves.
The key objectives are:
• Complete an updated Ore Reserve estimate at Veduga.
• Prepare an initial Ore Reserve estimate at Talgiy (Albazino hub) and Elevator
(Varvara hub)
• Complete an initial Ore Reserve estimate at Tomtor REM project.
• Significantly step-up activity levels in greenfield exploration including
commencing of drilling campaigns at several JVs with juniors.
Ore Reserves and Mineral Resources structure by metal as at 1 January 2021
Ore Reserves Mineral Resources
Gold 89% 89%
Silver 11% 11%
Total 100% 100%
Ore Reserves reconciliation, GE Moz (1)
Ore
Ore Change in Initial Reserves, Ore
Reserves, Depletion Revaluation ownership Ore including Exclusion Reserves,
01.01.2020 (2) Reserve base of base 01.01.2021
estimate metals, metals
01.01.2021 from GE
25.2 -1.9 +0.6 -0.6 +4.8 28.2 -0.4 27.9
1. Any discrepancies in calculations are due to rounding.
2. Sale of a stake in Veduga and North Kaluga.
Ore Reserves and Mineral Resources as at 1 January 2021 (1)
Tonnage Grade Content
Mt GE, g/t GE, Moz
Ore Reserves
Proved 68.6 2.4 5.4
Probable 162.4 4.3 22.5
Proved + Probable 231.0 3.8 27.9
Mineral Resources
Measured 14.8 4.0 1.9
Indicated 47.7 3.9 6.0
Measured + Indicated 62.5 3.9 7.9
Inferred 82.9 5.2 13.9
Measured + Indicated + Inferred 145.4 4.7 21.8
1. Mineral Resources and Ore Reserves in accordance with the JORC Code (2012).
Mineral Resources are additional to Ore Reserves. Detailed tables for Mineral
Resources and Ore Reserves with a breakdown by deposits and metals are given
below. PGM and Rare earth metals Mineral Resources are presented separately and
are not included in the calculation of the gold equivalent. Any discrepancies
in calculations are due to rounding.
Exploration areas and volumes (mine site exploration excluded) (1), (2)
Drilling, km
2020 2019
Brownfield
Kyzyl 2.4 5.3
Albazino hub 51.7 13.2
Omolon hub 8.0 11.8
Varvara hub 13.7 45.3
Dukat hub 3.3 0.6
Svetloye 3.6 2.8
Voro hub 12.6 22.3
Subtotal 95.2 102.4
Greenfield
Yakutia 12.7 43.1
Nezhda 4.9 1.8
Prognoz 7.8 41.4
Kutyn 25.5 16.1
Veduga 27.0 19.2
Urals 5.1 3.9
Viksha 22.2 11.9
Other 0.7 1.9
Subtotal 93.3 96.1
Total 188.5 198.5
1. Any discrepancies in calculations are due to rounding.
2. Excluding exploration at JVs.
EXPLORATION RESULTS
As of 31.12.2020, the company owned 123 licenses for prospecting, exploration and
mining of gold, silver, PGMs and base metals. 34 of these licenses were obtained in
2020 while 12 licenses have been relinquished. During the reporting year,
geological activities were carried out at 70 projects at 68 licensed properties. In
total, 189 km of drilling was completed.
Kyzyl
• In 2020, an initial Ore Reserve estimate for East Bakyrchik (Kyzyl) was
completed amounting to 2.2 Moz of gold with an average grade of 3.7 g/t. The
total Kyzyl Ore Reserves increased to 10.1 Moz with an average grade of 5.4
g/t. The Ore Reserve estimate for East Bakyrchik incorporates data from the
29.9 km drilling campaign (168 drill holes) conducted in 2015-2020. Additional
Kyzyl Mineral Resources amounted to 1.7 Moz of gold for underground mining with
an average grade of 3.8 g/t.
• Also, in 2020, Polymetal continued exploration drilling at East Bakyrchik in
order to confirm the possibility an extension of the open pit and an increase
in resources. 10 drill holes totaling 2.4 km were completed resulting in better
definition of the ore bodies' outlines and the boundaries of mineralisation.
• In 2021, further exploration at Eastern Bakyrchik sites is planned to convert
open-pit Mineral Resources into the Indicated category. Additionally, Polymetal
is planning exploration drilling to prospect the eastern flank of the Kyzyl
shear zone including the Sarbas and Karmen deposits. Also, deeper levels of the
ore body 1 will be traced to increase Inferred resources.
Albazino hub
• In 2020, exploration activities included exploration drilling (9.3 km) along
the flanks and delineation of the ore body at the Anfisa open pit.
• Exploration was carried out at the Talgiy section of the Urkachik area (92,000
m3 of trenches, 42.4 km of drilling). In the central zone of the main ore body,
detailed exploration activities were conducted to complete Russian statutory
resource estimate (GKZ). Exploration activities have been further continued on
the flanks in order to delineate and trace ore bodies down dip. According to
the initial estimate, Mineral Resources amounted to 0.5 Moz of gold with an
average grade of 4.4 g/t.
• In 2021, the Company plans to prepare the GKZ reserve estimate at Talgiy, as
well as to continue exploration drilling aiming to delineate ore bodies,
upgrade Mineral Resource categories and convert them into Ore Reserves.
• In 2020, 25.5 km of exploration drilling and 24,400 m3 of trenches were
completed at Kutyn. Most of the exploration work was focused on Mineral
Resources of heap leachable ore on the flanks of the ore zones and the upgrade
of Mineral Resource categories. Besides, exploration drilling was carried out
to assess the quality and availability of the primary ore. As a result, the
Company identified intercepts which could be developed via underground mining.
• In 2021, the Company will continue to delineate heap leachable ore bodies at
Kutyn and conduct additional exploration on the flanks of the explored ore
zones to verify new promising areas. Detailed drilling will be carried out at
the main ore zones to convert Mineral Resources into Ore Reserves.
Omolon hub
• At Burgali, 4.5 km of exploration drilling was completed along the explored ore
bodies of the northern zone. This resulted in a 36% increase of Ore Reserves
compared to the 01.01.2020 estimate to 121 Koz of GE, while additional Mineral
Resources amounted to 96 Koz. The increase at Burgali partially compensated for
the reserve decrease at other deposits of the Omolon hub.
• In 2021, aside from completion of the ore bodies delineation at the northern
zones of Burgali, exploration drilling is planned at the southern and central
zones aiming to increase the deposit's resources.
Varvara hub
• In 2020, at Elevator, 8.1 km of drilling was completed (44 drill holes). The
goal was to explore the primary gold ore for open-pit mining. The preliminary
internal estimate confirmed a potential increase of Mineral Resources at the
deposit.
• In 2021, the Company will carry out detailed exploration at the deposit in
order to upgrade Mineral Resource categories and to convert them into Ore
Reserves.
Dukat hub
• During the reporting year, exploration activities were focused at the
Doroninskaya area (a new license in 2020). Evaluation drilling of 2.9 km was
completed.
• In 2020, the Company conducted airborne geophysical survey with a new MMT
method (Mobile Magneto Tellurics). The covered area totaled 1,300 km2. As a
result, 10 anomalous zones were identified. In 2021, Polymetal will start
exploration drilling at these areas.
Svetloye hub
• In 2020, exploration activities were conducted on the flanks of the ore zones
using surface trenching. A number of ore intercepts at new and explored ore
bodies were identified at the Emmy, Lyudmila and Tamara deposits, which will be
further studied in 2021 with the aim to increase mineral resources.
• Exploration results and open pit boundaries extension offset depletion and
resulted in an increase in Ore Reserves to 499 Koz of GE.
Voro hub
• At Voro, exploration was focused mostly on the western section of the oxidized
ores. 1.7 km of drilling was completed. In 2021, the Company is planning to
continue exploring nearby promising areas.
• Drilling was carried out at the Salda property with the aim of tracing the
identified mineralisation along strike and dip. In total, 3.9 km was drilled
(48 drill holes). Testing of run-of-mine samples demonstrated that the ore is
suitable for processing at the Voro plant. In 2021, the Company plans to
continue exploration at the property and its flanks.
Nezhda
• In 2020, exploration activities were carried out on the southern and eastern
flanks aimed at extending Nezhda's mineral resources. 4.9 km of drilling and
123 km of trenches were completed. The drilling campaign allowed to define ore
zones with potential for increase in mineral resources as well as confirmed
further exploration potential of previously underexplored ore zones.
• In 2021, Polymetal is planning to continue exploration activities on the flanks
of the deposit to identify new mineralised zones and update the mineralisation
model of the known ore bodies, as well as to verify the newly revealed
geochemical anomalies.
Prognoz
• In 2020, 7.6 km of infill drilling was completed at the Glavnaya and Boloto ore
zones, which resulted in significant upgrade of resources categories and
allowed to prepare them for mining.
• According to the initial estimate prepared in 2020, Ore Reserves amounted to
142 Moz of silver, with an average grade of 560 g/t. Additional Mineral
Resources totalled 100 Moz of silver with an average grade of 552 g/t.
• In 2021, Polymetal will continue infill drilling at the Glavnaya zone in order
to prepare it for operation as well as exploration drilling at the promising
geophysical anomalies.
Veduga
• In 2020, exploration drilling at the deeper levels of the Ore body 1 was
performed to assess its resource potential as well as at the Strelka section in
order to trace ore bodies along strike and dip. 27 km of drilling was
completed. The updated additional Mineral Resource estimate for Veduga
increased sevenfold compared to last year and totalled 1 Moz of gold (based on
Polymetal's share in the project of 59.4%). Additionally, Polymetal started to
build an exploration decline in order to conduct the detailed exploration of
the Ore body 1 to a horizon of -100 m and to prepare it for mining.
• In 2021, Polymetal will continue evaluating deeper levels of the Ore body 1 and
delineate ore bodies at the Strelka zone. The Company is planning to complete
development of the exploration decline to a horizon of +200 m and build an
exploration drift at this level. The updated Ore Reserve estimate is planned to
be completed by the year end. Licensing and exploration activities at the new
promising areas are also expected.
PGMs
• In 2020, 14.3 km of exploration drilling was completed on the flanks of the
Kenti and Shargi ore zones at the Viksha PGM deposit aiming to upgrade Mineral
Resource categories. As a result, the share of 3E Measured and Indicated
Mineral Resources increased from 65% to 90%, while the total volume of Mineral
Resources decreased by 11% to 5.4 Moz year-on-year.
• In 2021, the Company plans to complete a Feasibility Study and GKZ reserve
estimate at Viksha.
JUNIOR JOINT VENTURES
Taimyr JV
• The Taimyr JV is a joint venture between Polymetal and an independent junior
exploration company, where Polymetal owns 70% with a call-option to acquire the
remaining 30% stake following the completion of an initial JORC-compliant
Mineral Resource estimate. The JV is aimed at discovering a
copper-molybdenum-gold mineralisation in the Taymyr Peninsula, Krasnoyarsk
region, Russia.
• In 2020, the JV delivered all necessary materials and equipment to Саре
Chelyuskin and assembled a field camp. The planned exploration activities for
the year were completed. As a result, the company compiled data on the
geochemical and metasomatic zonation accompanying the prospected intrusions,
and new points of Cu, Au, Mo mineralisation were identified. The geochemical
sampling results suggest the presence of several types of ore mineralisation
within the prospected areas, including gold and copper-molybdenum-porphyry with
gold.
• In 2021, the company plans to continue exploration of the revealed anomalies of
Cu, Mo, Au, and at new promising areas.
Matenvunay (Chukotka), JV with MEN
• JV with MEN (Mineral Exploration Network (Finland) Ltd), an experienced
UK-based junior explorer with a strong track record of prospecting in Finland
and Spain, is aimed at discovering a near-surface gold mineralisation in the
Chaunsk region of Chukotka, Russia. Polymetal owns 25% in the entity with an
option to increase its stake to 80% by contributing RUB 60 million (US$ 0.8
million) upon completion of the first-year field programme. Polymetal also
retains a 5-year option to increase its interest to 100% subject to positive
exploration results.
• In 2020, based on exploration activity, eight mineralised zones (with a length
from 650 to 1 240 m and with an assumed thickness of about 150 m) were
identified within three exploration areas.
• In 2021, drilling and trenching will be continued to intercept and study ore
bodies within the identified mineralisation zones.
Southern Urals project, JV with Rosgeo
• The joint venture with Rosgeo, the largest Russian geological exploration
holding, is focused on exploration at the Novopetrovskaya property in the south
of the Republic of Bashkortostan to discover a pyritic copper-zinc
mineralisation. Polymetal holds 75% in the JV and a 7-year option to acquire
the remaining 25% interest following the Russian statutory reserve estimate
(GKZ).
• Rosgeo carried out exploration work on the Novopetrovskaya area in 2014-2017;
as a result, intercepts of copper-zinc pyrite ores were received, indicating
the potential discovery of significant deposits with high copper and zinc
content. The mineralisation is expected to be located at a depth of 400-500 m
suitable for underground mining.
• In 2020, the JV carried out permitting and exploration planning activities. In
2021, the company plans to complete 31 km of exploration drilling.
Please find the full PDF version of the announcement at the link at the bottom of
the page.
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
Monakhov +44 20 7887 1475 (UK)
Leonid Fink +44 20 3727
1000 Timofey
Viktor Pomichal Kulakov
+7 812 334 3666 (Russia)
Kirill
Kuznetsov
Joint Corporate Brokers
Morgan Stanley & Co. +44 20 7425
International plc 8000
Andrew Foster
Richard Brown RBC Europe
Limited
+44 20 7653 4000
Marcus Jackson
Jamil Miah
Panmure Gordon
Daniel Norman +44 20 7886
2500
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.
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3 1 ) GE as at 01 January 2021 includes gold and silver only here and further in
the report unless otherwise stated. Base metals are excluded due to their
immateriality.
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Attachment
File: 4 Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1
January 2021
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ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
Sequence No.: 94473
EQS News ID: 1171793
End of Announcement EQS News Service
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