PJSC Polyus (MOEX — PLZL) («Polyus», the «Company»), the largest gold producer in Russia, provides the following update on the Company’s Vostochny pit, situated within the Olimpiada mine, which had the production temporarily suspended following an incident on the 23 May 2016 when, as a result of rock slide, a pit wall failure occurred, causing a landslide of up to 70,000 cubic meters of rock.
Once all recovery procedures were completed, the Company embarked on a series of tests in order to ascertain the cause of the incident. These tests confirmed that the rock deformation was isolated to the location of the landslide and that there was no further displacement. The landslide occurred as a result of the effects of a drastic seasonal thermal differential on the structural rocks of different composition, density and hardness in the deformation area at a specific junction.
On 1 June 2016, ore mining was resumed at lower levels of the pit and since then, over 700,000 tonnes of ore have been mined. Meanwhile, the Company continues monitoring rock and highwall slope conditions.
To fully restore the transport infrastructure of the pit, Polyus will cutback the affected area of the pit wall. This involves extracting approximately 2 million cubic meters of rock mass. It is anticipated that active excavations will take 2 months to complete and will commence immediately after the necessary regulatory permits are obtained.
In the meantime, the localized cutback of the highwall is effectively an integral part of the Vostochny pit expansion project and therefore will not require any additional increase to the total volume of stripping works within the pit.
Decreased ore mining rate during the recovery work will be offset by the processing of stockpiled ore. Furthermore, in order to increase the gold grade in the ore fed to the mills at the Krasnoyarsk Business Unit (KBU), Polyus intends to undertake a number of steps, in particular re-commissioning the mothballed Zapadny pit within the Olimpiada mine and using additional amounts of accumulated refractory carbonaceous ore via an improved flow sheet. In parallel, the Company will expedite the Blagodatnoye Mill expansion.
These initiatives coupled with the KBU’s solid production results for the first 5 months of 2016 relative to the business plan should enable the KBU to meet its annual production target.
Polyus (www.polyus.com) is the largest gold producer in Russia and one of the top 10 gold miners globally by ounces produced. The Company also holds the fourth largest mineral resources base in the world.
Polyus group’s principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Sakha Republic (Yakutia).
In 2015, the Company confirmed its status of one of the lowest-cost gold producers globally.
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Forward looking statement
This announcement may contain «forward-looking statements» concerning Polyus and/or Polyus group. Generally, the words «will», «may», «should», «could», «would», «can», «continue», «opportunity», «believes», «expects», «intends», «anticipates», «estimates» or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.