PJSC Polyus (LSE, MOEX: PLZL) ("Polyus", or the "Company") announces that the Company acquires 100% stake in the Chulbatkan gold deposit ("Chulbatkan") from the Highland Gold Mining group of companies ("Highland Gold"). Consideration for the transaction is US$140 million payable upon closing of the deal, subject to further certain post-completion adjustments.
Chulbatkan is a high-grade greenfield project located in the Khabarovsk region of the Russian Far East. Conducted engineering studies envisage the operation as an open pit mine with heap leach processing.
Based on the latest Canadian Institute of Mining, Metallurgy and Petrolium ("CIM") estimates, Chulbatkan’s Probable Gold Reserves stand at 56,497 thousand tonnes containing 2,964 thousand ounces of gold at an ore grade of 1.6 g/t.
The results of the Pre-Feasibility Study ("PFS") on Chulbatkan were announced in November 2021 by one of the previous owners. According to the PFS, the project is expected to produce approximately two million ounces of gold at an average all-in sustaining cost of $580 per ounce during a seven-year mine life.
Polyus’ technical team will thoroughly review the key outcomes of previous studies on the project and will proceed with the development of the Feasibility Study.
Alexey Vostokov, Chief Executive Officer of PJSC Polyus, commented:
"Chulbatkan fits Polyus’ portfolio of assets, leveraging our deep experience in managing bulk open-pit assets. The project is also planned as a heap leach operation, a technology which Polyus successfully deployed at Kuranakh in 2017. We will now focus on an integration of Chulbatkan into our project pipeline, and believe that the project will contribute to our long-term growth strategy".
Vladislav Sviblov, Chief Executive Officer of Highland Gold Ltd, commented:
"We see a significant potential synergetic effect between the operating mine Kupol and our own Kekura asset. We are focused on direct production synergy maximisation in order to extend the Kupol mill operational lifetime.
Chulbatkan is a promising project, which though demands substantial resources for its implementation. I sincerely believe that Polyus, the largest gold producing company in Russia and an efficient open-pit operator, will be able to deliver on it".
Polyus is the world’s fourth-largest gold mining company by production volumes and the largest gold miner in terms of attributable gold ore reserves. The Company has the lowest production costs among major global gold producers. Its principal operations are located in Siberia and the Russian Far East: Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).
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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.