Polyus to spend $600m expanding Blagodatnoye

Bruno Venditti | December 23, 2020 | 4:24 pm News Europe Gold 
Blagodatnoye mine in Siberia (Image: Polyus)

Polyus will spend $600 million on the construction of a new gold processing plant and upgrade of its Blagodatnoye mine in Siberia, the company’s second largest mine.

After the construction of Mill 5, which will start next year, the company will develop its giant Sukhoi Log deposit.

“The main part of the investment programme at Blagodatnoye does not coincide with the peak of investment in the Sukhoi Log development,” Mikhail Stiskin, Polyus’ chief financial officer, told Reuters. Sukhoi Log investment will peak after 2023.

Polyus plans to produce 2.8 million troy ounces of gold in 2020 and sees capital expenditure of between $700 million and $750 million this year.

The new Mill 5 will produce 390,000 ounces of gold a year after its launch in 2025. The grade in ore processed at Mill 5 is expected to average 1.4 gram per tonne for the life of mine. During the first five years of operations, the estimated recovery rate at Mill 5 is 87.9%. TCC is estimated to average $320 per ounce.

The CFO told Reuters that the company currently has a large gold resource portfolio, but it could consider buying gold exploration licenses over the longer term.

Polyus announced in October that its giant Sukhoi Log gold deposit in Siberia was the world’s biggest by reserves both among greenfield assets and operating mines.

The deposit, said the company, holds 40 million ounces of proven gold reserves as measured by international JORC standards. This means Sukhoi Log (which translates to “dry gully” in English) contains a fifth of Russia’s entire gold reserves.

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