Press releases

Sukhoi Log Maiden Ore Reserve Estimate and Mineral Resource Update

PJSC Polyus (LSE, MOEX — PLZL) (“Polyus”, or the “Company” ) reports a maiden Ore Reserve estimate for Sukhoi Log and provides an update on the Mineral Resource estimate prepared by AMC Consultants Pty Ltd (“ AMC”) in compliance with JORC Code.

The maiden Ore Reserve estimate stands at 540 million tonnes with an average grade of 2.3 g/t Au and containing 40 million ounces of gold as at 31 May 2020. This estimate ranks Sukhoi Log as the largest gold deposit both among greenfield assets and operating gold mines. This 2020 Sukhoi Log Ore Reserve estimate is based on the 2019 Mineral Resource model as well as a number of studies and additional mine planning activities undertaken by AMC.

The estimated Mineral Resources for Sukhoi Log stand at 1,110 million tonnes, with an average grade of 1.9 g/t Au and containing 67 million ounces of gold as at 31 May 2020. Exploration and verification drilling throughout 2019 enabled an increase of the estimated Indicated Mineral Resource by 18 million ounces to 46 million ounces of gold.

Polyus continues in-fill drilling campaigns. This drilling is designed to improve the confidence of Inferred Mineral Resources and will allow the Company to better define the gold mineralisation within the future pit area, where Polyus expects to carry out mining activities during the first years of Sukhoi Log’s operations. The Company is also proceeding with further geotechnical drilling. The results of this drilling programme will be used in future studies.

Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:

We are pleased with the results yielded by our exploration programme at Sukhoi Log. The publication of the maiden Ore Reserve estimate represents a significant milestone for Polyus’ long-term development strategy, and confirms Sukhoi Log’s position as one of the world’s highest-calibre gold deposits.

The Company has achieved a solid conversion ratio from resources to reserves at a grade of 2.3 g/t, while continuing to build up its Mineral Resource base. With the addition of 40 million gold ounces, Polyus secures its top-2 position among the world’s largest gold mining companies by attributable reserves.

We continue to focus on the next stages of the project’s development. We expect to provide the next update on Sukhoi Log later in 2020, with the announcement of the Pre-Feasibility study results.

Sukhoi Log Mineral Resources1 and Ore Reserves2

Classification Tonnes (Mt) Gold Grade (g/t) Contained Gold (Moz)
Inferred Mineral Resources 441 1.5 21
Indicated Mineral Resources 668 2.1 46
Total Mineral Resources 1,110 1.9 67
Classification Tonnes (Mt) Gold Grade (g/t) Contained Gold (Moz)
Probable Ore Reserves 540 2.3 40
Proved Ore Reserves —  —  — 
Total Ore Reserves 540 2.3 40

Ore Reserve estimate

The Sukhoi Log Ore Reserve estimate as at 31 May 2020 is based on the resource model prepared by AMC. The Ore Reserve estimate was:

  • Prepared and reported under the direction of the Competent Person using accepted industry practice.
  • Classified in accordance with the JORC Code.
  • Based on the assumption for long-term gold price (US$1,350/oz), foreign exchange rates (RUB65 to US$1), cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

A preliminary economic analysis by AMC confirms that future revenues to be derived, and costs incurred to access those revenues, produce a viable project based on the assumptions used in preparing this estimate for the Sukhoi Log project.

Mineral Resources were converted to Ore Reserves recognizing the level of confidence in the Mineral Resource estimate and reflecting all modifying factors. The Sukhoi Log Indicated Mineral Resources are reported inclusive of those Mineral Resources modified to produce the 2020 Sukhoi Log Ore Reserve estimate that can be economically mined by open pit mining methods.

The Probable Ore Reserve estimate in the amount of 40 million ounces of gold is based on Mineral Resources classified as Indicated. There are no Proved Ore Reserves as there are no reported Measured Mineral Resources.

Dilution and ore loss were introduced to the mining model by regularizing the block model to a minimum selective mining unit size of 25 m long, 25 m wide and 15 m high. Diluent material was assigned the grade of the underlying resource model block. Where the diluted blocks had a grade of less than the cut-off grade of 1.0 g/t Au, the block was rejected as ore loss. Regularization resulted in a net reduction of ore tonnage of approximately 1% and the contained gold decreased by approximately 3%.

The limits for the open pit were selected through optimization using the GEOVIA Whittle implementation of the Lerchs-Grossmann algorithm. The optimization considered Indicated Mineral Resources only. Pit designs were based on the optimization shell outline that developed the largest undiscounted cash flow for the evaluation parameters to maximize the Ore Reserve estimate. Batter angles used in the designs followed the geotechnical recommendations and incorporate 7.5 m wide berms every 15 m vertically. Designs allow for access ramps, minimum mining widths, and 20 m wide geotechnical berms.

1 Mineral Resources reported as at 31 May 2020 at a cut-off grade of 0.75 g/t Au, and limited by an optimization shell using a gold price assumption of US$1,650/oz.
2 Ore Reserves reported as at 31 May 2020 at a cut-off grade of 1.0 g/t Au.

Sukhoi Log Ore Reserves as at 31 May 20203

Classification Tonnes (Mt) Gold Grade (g/t) Contained Gold (Moz)
Probable Ore Reserves 540 2.3 40
Proved Ore Reserves —  —  — 
Total Ore Reserves 540 2.3 40

Mineral Resource estimate

The Mineral Resource estimate at 31 May 2020 is based on a Mineral Resource model completed in 2019 using data from the verification drilling programme available at 12 September 2019 used in conjunction with historic drillhole data. The Mineral Resource estimate was revised at 31 May 2020 by reporting in an optimization shell using a gold price assumption of US$1,650/oz.

Gold mineralization is hosted by carbonaceous shale, phyllite and siltstone and controlled by the axis of an overturned anticline where it intersects metamorphosed carbon-bearing lithologies. The depth of oxidation is negligible.

The resource model has been developed considering mining by open pit methods with selectivity indicated by blasthole or reverse circulation drillhole sampling for grade control and mining possibly on 10 m or 15 m benches.

The drillhole data used for the May 2020 Mineral Resource estimate comprised:

  • Historic data in the validated database: 1,185 drillholes of 300,597 m total drilled length with 154,519 m assayed length of mainly 2 m samples.
  • Verification drilling: 29 drill sections comprising 634 drillholes totalling 201,216 m of drilling. Assays were available for 616 of those drillholes for 197,215 m of sampling. Verification drillholes are sampled at mainly 2 m intervals over their entire hole length.

The estimate for the main mineralized zone was constrained by hangingwall and footwall surfaces interpreted using logged quartz-pyrite characteristics. Between the hangingwall and footwall surfaces, the mineralized volume was defined using a probability method using a 0.3 g/t Au mineralization threshold. The orientation of the probability model reflected the orientation of mineralization within the stratigraphic framework. Gold grades were estimated using ordinary kriging.

The Mineral Resource estimate in the verification area, estimated using both historic and verification drillhole data and constrained by hangingwall and footwall surfaces, has been classified as Indicated Mineral Resource. Parts of the Mineral Resource estimate outside the verification area have been classified as Inferred

Mineral Resource because estimation relies on wide-spaced verification drilling and historic data.

The footwall zone in all areas has been classified as Inferred Mineral Resource as it is based only on wide-spaced verification drilling.

The May 2020 Sukhoi Log Mineral Resource has been reported at a cut-off grade of 0.75 g/t Au, and limited by an optimization shell using a gold price assumption of


The table below provides a comparison of the May 2020 Mineral Resource estimate with the 2018 estimate.

Sukhoi Log Mineral Resources as at 31 May 2020 compared with 20184

Classification Tonnes (Mt) Gold Grade (g/t) Contained Gold (Moz)
As at 31 May 2020
Inferred Mineral Resources 441 1.5 21
Indicated Mineral Resources 668 2.1 46
Total Mineral Resources 1,110 1.9 67
As at 30 October 2018
Inferred Mineral Resources 588 1.9 35
Indicated Mineral Resources 374 2.4 28
Total Mineral Resources 962 2.1 63

3 Ore Reserves at 31 May 2020 reported at 1.0 g/t Au cut-off grade
4 Limited by an optimization shell using a gold price assumption of US$1,650/oz. Mineral Resources as at 31 May 2020 reported at 0.75 g/t Au cut-off grade. Mineral Resources as at 30 October 2018 reported at 1.0 g/t Au cut-off grade.

JORC Code Table 1

The JORC Code requires reporting of assessment and reporting criteria referred to as JORC Code Table 1. JORC Code Table 1 for the May 2020 Sukhoi Log Mineral Resource and Ore Reserve estimates can be found at the Polyus website here.

Competent Persons

The Sukhoi Log May 2020 Mineral Resource and 2020 Ore Reserve estimates are reported in accordance with the standards set out in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December 2012 (the «JORC Code») and estimated by Competent Persons as defined by the JORC Code. Estimation and reporting also recognizes the importance of the Russian approval requirements and reporting regime. This is particularly relevant to the mining licence areas of the project. All the 2020 Ore Reserve is located within the approved mining licence area.

Information in this report on the Mineral Resources has been compiled by Mr Dean Carville, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of AMC Consultants Pty Ltd. Mr Carville visited Sukhoi Log in February and August 2018, and has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Carville consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Mr Mark Chesher is the Competent Person for the 2020 Ore Reserve, visited Sukhoi Log in January 2017, November 2018, and July 2019, and supervised preparation of the estimate with assistance from contributing specialists. Mr Chesher is satisfied that the work of these specialists is acceptable for the purposes of Ore Reserve estimation. Mr Chesher is a Fellow of the Australasian Institute of Mining and Metallurgy and is employed in the position of Technical Director, Russian Branch of Australian Mining Consultants Pty Ltd. He has sufficient experience relevant to the style of mineralization, type of deposit under consideration, and in open pit mining activities, to qualify as a Competent Person as defined in the JORC Code. Mr Chesher consents to the inclusion of this information in the form and context in which it appears.

In undertaking the assignments referred to in this report, AMC Consultants Pty Ltd and Australian Mining Consultants Pty Ltd acted as independent parties, have no interest in the outcome of the Sukhoi Log project and have no business relationship with Polyus or LLC SL Gold other than undertaking those individual technical consulting assignments as engaged, and being paid according to standard per diem rates with reimbursement for out-of-pocket expenses. Therefore, AMC Consultants Pty Ltd and the Competent Person believe that there is no conflict of interest in undertaking the assignments and preparing the estimates as stated in this press release.


Polyus is the world’s fourth-largest gold mining company by production volumes, with the third-largest attributable gold reserves and the lowest production costs among major global gold producers.

The company’s principal operations are located in Siberia and the Russian Far East: Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).

Investor and Media contact
Victor Drozdov, Director Communications & Investor Relations (CIR) Department
+7 (495) 641 33 77

Forward-looking statements

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.

Sukhoi Log Maiden Ore Reserve Estimate and Mineral Resource Update 244 Kb