Acquisition of North Kaluga deposit

RNS Number : 5057R

Polymetal International PLC

12 September 2014

 



Release time	IMMEDIATE
Date	12 September 2014

Polymetal International plc

Acquisition of North Kaluga deposit

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") announces the acquisition of 100% ownership in the North Kaluga property following the restructuring of the Ural-Polymetal JV.

Under the terms of the restructuring agreement, the Ural-Polymetal JV^[1] was dissolved and the asset and liabilities of the JV were distributed amongst the joint venture partners. Polymetal received a 100% interest in the North Kaluga property and assumed US$20 million of debt. The other assets and liabilities of the JV were transferred to the other joint venture partners. Polymetal owned 49.99% of the Ural-Polymetal JV prior to the transaction and the asset had nil carrying value in the Group's financial statements due to write-off in 2013 following the commodities price decline.

 "We continue to invest in assets that can provide high-grade life-of-mine extensions to our operating mines" - said Vitaly Nesis, CEO of Polymetal.

ASSET DESCRIPTION

North Kaluga is located in the Sverdlovsk region of Russia, approximately 150 km from the Voro mine and 3 km from the federal highway.

The deposit was discovered in the 1950's, with exploration drilling undertaken by the JV partners from 2011 onwards. A total of 43 holes were drilled (2,435 m), indicating that the ore bodies have sharply defined boundaries and are on average 6-12m wide.

Polymetal Engineering performed a JORC-compliant ore reserve estimate for the North Kaluga open pit. The results of the reserve estimate are summarised in the table below.

North Kaluga Ore Reserves estimate, as at July 1, 2014^[2]

Ore Reserves 1,2,3

Tonnage

Grade

Content

Au

Ag

Cu

Zn

S

Au Eqv

Au

Ag

Cu

Zn

S

Au Eqv

Kt

g/t

g/t

%

%

%

g/t

Koz

Koz

Kt

Kt

Kt

Koz

Probable

320

6.7

101

5.8

5.6

27.4

17.1

70

1,056

18.9

18.1

89.1

179

¹ Ore reserves are in accordance with the JORC Code (2012). Discrepancies in calculations are due to rounding.

² COG Au Eqv = 4.9 g/t.

³ Ore reserves were estimated at the prices Au=1,300 $/oz, Ag=20 $/oz, Cu=7,000 $/oz, Zn=1,700 $/oz. Gold equivalent data is based on conversion ratios of metals into gold equivalent: Ag = 90.6, Cu = 0.7 (%/gr.), Zn = 7.8 (%/gr.)

Polymetal will continue exploration drilling at the property in 2014 and 2015. A detailed development plan is anticipated to be developed by early 2016, following consideration of the various mining and processing options.

Enquiries

Media		Investor Relations
Instinctif Partners Leonid Fink Tony Friend	[phone]	Polymetal Maxim Nazimok Evgenia Onuschenko	[e-mail] [phone] (Russia) [phone] (UK)
Joint Corporate Brokers
Morgan Stanley Bill Hutchings Sam McLennan	[phone]	RBC Europe Limited Stephen Foss Jonny Hardy	[phone]

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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[1]Ural-Polymetal was established in November 2010 (for more information please refer to the press release published on 2 November 2010).

[2]Ore Reserve estimate was prepared by employees of JSC Polymetal Management Company and CJSC Polymetal Engineering, subsidiaries of the Company, led by Mr. Valery Tsyplakov, who assumes overall responsibility for the Ore Reserves Report. Mr. Tsyplakov is the employed full-time as the Managing Director of CJSC Polymetal Engineering and has more than 13 years' experience in gold, silver and polymetallic mining. He is a Member of the Institute of Materials, Minerals & Mining (MIMMM), London, and a Competent Person under the JORC Code.

Listed below are other Competent Persons employed by the Company that are responsible for relevant research on which the Ore Reserves estimate is based:

·        Geology and Mineral Resources - Roman Govorukha, Head of Geologic Modelling and Monitoring, MIMMM, with 13 years' relevant experience;

·        Mining and Ore Reserves - Igor  Epshteyn, Head of Mining Process Department, FIMMM, with 32 years' relevant experience;

·        Concentration and Metals - Igor Agapov, Deputy Director of Science and Technology, MIMMM, with 16 years' relevant experience;

·        Environmental Issues - Tatiana Kuleshova, Director for Ecology, MIMMM, with 22 years' relevant experience.

All above mentioned Competent Persons have sufficient experience that is relevant to the style of mineralisation and types of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code).

All Competent Persons have given their consent to the inclusion in the report of the matters based on his (or her) information in the form and context in which it appears.

 

END

 

 

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