Tamunier resource estimate

RNS Number : 5222L

Polymetal International PLC

05 September 2012

 



Release time	IMMEDIATE
Date	5 September 2012

Polymetal International plc

Maiden gold resource estimated at Tamunier exploration project.

Polymetal International plc (LSE: POLY) (together with its subsidiaries, including JSC "Polymetal" - "Polymetal", the "Company", or the "Group") is pleased to announce the results of its independent resource assessment for the Tamunier project.

Highlights

·     Snowden Mining Industry Consultants Inc. ("Snowden") has estimated a JORC-compliant Mineral Resource for the company's Tamunier project  of 50Mt at 1.2 g/t gold

·     Further substantial exploration potential has been identified with ongoing exploration seeking to expand and upgrade the resource estimate

·     Polymetal will consider strategic options in relation to the project, including a JV with an exploration company

"I am pleased with the results of our exploration work at Tamunier" said Vitaly Nesis, CEO of Polymetal. "The size of the deposit is quite substantial. However, the Tamunier project does not fit with our strategy of concentrating on higher-grade assets and we will, therefore, consider a sale or partnership to advance the development of the asset".

Location and history

Tamunier, together with the adjacent Vasilyevsky license (combined license area of 53 km²) is located in Sverdlovsk region of Russia, 182 km north from Voro, an operating mine owned by Polymetal, and 67 km from the closest large town of Ivdel (population 18 thousand).  Mineralization was discovered at Tamunier in the 1960s during an exploration campaign targeted at VMS base-metal mineralization. Polymetal acquired mining and exploration subsoil rights (licenses) from the state for Tamunier in 2007 for US$ 536,000 and for US$ 161,000 for Vasilyevsky in 2011.

Tamunier is located in a historical mining area with good infrastructure. The project is accessible by year-round gravel road. The nearest paved road is 5 km away, the 110-kV power line is 18 km away, and the nearest railway spur is 41 km away, all to the south.

Geology and mineralisation

The Tamunier mineralization is characterized by zones of disseminated sulfide (mostly pyrite) and containing gold. The mineralization is within an extensively altered volcanoclastic Devonian sequence intersected by several north-south traced faults.

Following geophysical and geochemical studies and the drilling of 155 prospecting holes, Polymetal drilled 129 exploration diamond holes and these are the basis of the 2012 Mineral Resource estimate. The new holes are up to 200 m depth from the surface with 100 m x 50 m and 50 m x 25 m drill patterns. This totals to 29,200 m of core drilling and 28,977 samples including 4,000 assays completed.

Structures hosting the mineralization consist of mineral bearing metasomatites that have been traced by drillholes for 3 km along strike and for 350 m to 400 m down-dip. The mineralized zone is from 300 m to 700 m thick with boundaries along strike and down-dip that have not been defined. The mineralization does not have clear geological boundaries and outlines can only be determined on the basis of sampling. 

 

Metallurgy

Polymetal Engineering has performed testwork on a suite of representative samples derived from mineralized drill cores from Tamunier, and based on the results of the testwork has  the following findings:

·     Direct cyanidation yields low recovery of 57.9% for gold using a sample grind at P80 of -0.074 mm

·     Heap leaching is not feasible

·     Most gold can be dissolved in cyanide after fine grinding to P80 at -0.028 mm suggesting the amenability of moderate ultrafine grinding (UFG) metallurgy cyanidation techniques

·     Concentration (gravity-flotation) is feasible to produce a gold-pyrite concentrate grading 16 g/t Au to 20 g/t Au at an overall recovery of 83% gold to concentrate and 5% mass yield

·     Testwork on UFG of concentrates and whole ore is ongoing

Resource estimate

The Tamunier gold and silver Mineral Resource was estimated using ordinary kriging for silver and multiple indicator kriging for gold.  The Mineral Resource was classified using the guidelines of the CIM code, are documented in a report using the NI 43-101 standards and highlighted in the table below.

Tamunier Snowden independent Resources estimate as of 27 August 2012¹

Category	Cutoff	Tonnage	Grade		Content3
	g/t Au	Mt	Au, g/t	Ag, g/t	Au, Moz	Ag, Moz
Indicated	0.4	2.76	0.92	7.72	0.08	0.68
Inferred2	0.4	87.30	0.88	1.29	2.46	3.62
Indicated	0.6	1.65	1.20	10.29	0.06	0.54
Inferred2	0.6	48.50	1.18	1.70	1.85	2.66
Indicated	0.8	1.07	1.48	13.86	0.05	0.48
Inferred2	0.8	30.13	1.48	1.93	1.43	1.87

(1)           Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. The Mineral Resources in this news release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.

(2) The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.

(3) Contained metal may differ due to rounding.

In addition to the Tamunier Mineral Resource there is significant exploration potential. The exploration target, which has been defined using the drilling information available, is between 7 Mt and 90 Mt, at a grade of between 0.5 g/t Au and 1.7 g/t Au.

The Tamunier Mineral Resource estimate was performed by Ivor Jones acting as a Competent Person (a Fellow of the Australasian Institute of Mining and Metallurgy and Chartered Professional) and Oleg Valeyev, acting as a Qualified Person (Member of the Association of Professional Geoscientists of Ontario).

Mr Ivor Jones, (BSc(Hons), MSc, FAusIMM, CP), is the Group General Manager of Geosciences with Snowden and contributed in producing the Mineral Resource estimate based upon the data and interpretations provided by Polymetal. Mr Jones has sufficient experience relevant to the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under NI43-101. Mr Jones consents to the inclusion in this report of the matters based on his information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Dr. Oleg Valeyev (B.Sc, M.Sc, Ph.D, MAPGO) is the Head Of Strategy Development Department of Polymetal Management Inc., and contributed by providing geological interpretations and the drillhole database for Mineral Resource estimation. Dr. Valeyev has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Qualified Person as defined under NI43-101. Dr. Valeyev consents to the inclusion in this report of the matters based on his information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Enquiries

Media		Investor Relations
College Hill Leonid Fink Tony Friend	[phone]	Polymetal Maxim Nazimok Evgenia Onuschenko Elena Revenko	[e-mail] [phone] (Russia) [phone] (UK)
Joint Corporate Brokers
Morgan Stanley Edward Knight Sandip Patodia	[phone]	Canaccord Genuity John Prior Roger Lambert	[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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