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Tuesday 09 April, 2019

PJSC Polyus

Ore Reserves and Mineral Resources Update

RNS Number : 6125V
PJSC Polyus
09 April 2019
 

Press Release                                                                                 9 April 2019

PJSC Polyus

Ore Reserves and Mineral Resources Update

PJSC Polyus (LSE, MOEX - PLZL) ("Polyus", the "Company") announces the  results of its Ore Reserves and Mineral Resources review as at 31 December 2018 in accordance with JORC Code 2012.

Polyus' Proved and Probable (P&P) Ore Reserves are estimated at 64 million ounces of gold.

The Measured, Indicated and Inferred (MI&I) Mineral Resources stand at 192 million ounces of gold, including 63 million ounces of Indicated and Inferred Mineral Resources for Sukhoi Log.

Ore Reserves Highlights

·    Polyus' Ore Reserves are estimated at 64 million ounces of gold, down from 68 million ounces as of 31 December 2017, reflecting mining depletion during 2018.

·    Over 95% of the Company's estimated Ore Reserves of gold are located within the operating assets:

o Polyus Krasnoyarsk has the largest share of the Company's Ore Reserves, with 26 million ounces at Olimpiada and 9.1 million ounces at Blagodatnoye.

o Natalka has estimated Ore Reserves of 15 million ounces.

o Ore Reserves at Verninskoye and Kuranakh were recorded at 4.8 million ounces and 4.3 million ounces, respectively.

·    Average grade of Polyus' Ore Reserves stands at 1.7 g/t. This estimate is inclusive of 5.1 million ounces of gold in low-grade stockpiles at an average grade of 1.0 g/t and 0.8 million ounces of gold at Alluvials at an average grade of 0.4 g/t.

·    Approximately 912 million tonnes of ore, containing 58 million ounces of gold out of 64 million ounces of total Ore Reserves, are expected to be mined by conventional open pit truck-and-shovel or underground mining methods at a grade of 2.0 g/t (adjusted for low-grade stockpiles and the Alluvial operations).

Mineral Resources Highlights

The Company's Mineral Resource are estimated at 192 million ounces of gold, compared to 190 million ounces as of 31 December 2017, which reflects depletion at all operating mines and update of the Mineral Resources estimate for Sukhoi Log.

·    Approximately 60% of the Company's Mineral Resources are attributable to operational mines:

o Olimpiada's Mineral Resources are estimated at 41 million ounces.

o Natalka Mineral Resources amount to 33 million ounces.

o Blagodatnoye's Mineral Resources stand at 18 million ounces.

o Verninskoye and Kuranakh's Mineral Resources include estimates of 12 million ounces and 8.7 million ounces, respectively.

·    AMC updated the Sukhoi Log Mineral Resources estimate during 2018 in accordance with JORC Code 2012. According to AMC, Mineral Resources at Sukhoi Log are estimated at 962 million tonnes, with an average grade of 2.1 g/t gold and containing 63 million ounces of gold as at 30 October 2018. The estimate is a nine per cent increase compared to the previous estimate of 58 million ounces of gold as at 31 January 2017. AMC also upgraded 28 million ounces of Inferred Mineral Resources to Indicated Mineral Resource.

Exploration Highlights

·    Polyus has initiated a comprehensive drilling programme across the asset portfolio.

·    The Company expects this programme to last until the end of 2019 and result in additions to Ore Reserve estimates, which will most importantly include a Maiden estimate of P&P Ore Reserves for Sukhoi Log.

·    At Sukhoi Log, the Company continues in-fill, deep levels, flanks and other drilling. Polyus plans to drill a total of 197,000 meters, including the approximately 155,000 meters drilled since October 2017 to date.

·    The Company anticipates to provide the next annual update on Ore Reserves and Mineral Resources in the first half of 2020.

Mineral Resource and Ore Reserve estimates

The Mineral Resource and Ore Reserve estimates are summarized in the Tables below. The effective date for the estimates is 31 December 2018. There is no material change to the estimates since the original statement on 5 June 2017, apart from mining depletion and update to Sukhoi Log Mineral Resource estimate. As a result, there is no requirement to update the JORC Code Checklist of Assessment Criteria (Table 1) summaries[i].

 

 

Polyus Ore Reserve estimates as at 31 December 2018[ii]

Deposit[iii]

Proved

Probable

Total

Tonnes
(Mt)

Gold
(g/t)

Gold
(
moz)

Tonnes
(Mt)

Gold
(g/t)

Gold
(
moz))

Tonnes
(Mt)

Gold
(g/t)

Gold
(
moz)

Mines in Operation

Olimpiada

11.4

2.82

1.0

269

2.88

24.9

281

2.88

26.0

Blagodatnoye

56

0.87

1.6

152

1.55

7.5

208

1.36

9.1

Titimukhta

5.3

1.57

0.3

6.3

3.13

0.6

12

2.42

0.9

Verninskoye

12

1.30

0.5

79

1.70

4.3

91

1.65

4.8

Alluvials[iv]

0

0.00

0.0

71

0.35

0.8

71

0.35

0.8

Kuranakh

0

0.00

0.0

136

0.97

4.3

136

0.97

4.3

Natalka

140

1.55

7.0

146

1.80

8.4

287

1.67

15.4

Development and Exploration Projects

Chertovo Koryto (ChK)

0

0.00

0.0

62

1.53

3.1

62

1.53

3.1

Total[v]

225

1.43

10.3

922

1.82

54.0

1,147

1.75

64.4

                     

 

Comparison of Polyus Ore Reserve estimates as at 31 December 2018 and as at 31 December 2017

Depositiii

2017

Proved & Probable Ore Reserves

2018

Proved & Probable Ore Reserves

Tonnes

(Mt)

Grade

(g/t)

Gold

(moz)

Tonnes

(Mt)

Grade

(g/t)

Gold

(moz)

Mines in Operation

Olimpiada

295

2.94

27.8

281

2.88

26.0

Blagodatnoye

216

1.38

9.6

208

1.36

9.1

Titimukhta

12

2.43

0.9

12

2.42

0.9

Verninskoye

94

1.68

5.1

91

1.65

4.8

Alluvials

87

0.35

1.0

71

0.35

0.8

Kuranakh

141

0.98

4.4

136

0.97

4.3

Natalka

293

1.67

15.7

287

1.67

15.4

Development and Exploration Projects

Chertovo Koryto (ChK)

62

1.53

3.1

62

1.53

3.1

Totalv

1,199

1.75

67.6

1,147

1.75

64.4

 

 

 

 

Polyus Mineral Resource estimates as at 31 December 2018

Depositiii

Measured

Indicated

Inferred

Total

Tonnes
(Mt)

Grade
(g/t)

Gold
(moz)

Tonnes
(Mt)

Grade
(g/t)

Gold
(moz)

Tonnes
(Mt)

Grade
(g/t)

Gold
(moz)

Tonnes
(Mt)

Grade
(g/t)

Gold
(moz)

Mines in Operation

Olimpiada

11.4

2.82

1.0

302

2.97

28.8

126

2.87

11.6

440

2.93

41.5

Blagodatnoye

56

0.87

1.6

280

1.49

13.4

69

1.32

2.9

405

1.38

17.9

Titimukhta

5.3

1.56

0.3

6.1

3.31

0.6

0.3

1.36

0.0

12

2.46

0.9

Verninskoye

12

1.30

0.5

206

1.57

10.3

14

1.99

0.9

231

1.58

11.7

Alluvials

0

0.00

0.0

208

0.19

1.3

34

0.40

0.4

242

0.22

1.7

Kuranakh

0.0

0.00

0.0

149

1.08

5.2

94

1.19

3.6

242

1.12

8.7

Natalka

144

1.70

7.9

260

1.85

15.5

148

2.09

9.9

552

1.87

33.2

Development and Exploration Projects

Sukhoi Log[vi]

0

0.00

0.0

374

2.35

28.3

588

1.85

35.0

962

2.10

63.3

Panimba

5.0

2.30

0.4

11

2.32

0.8

24

1.80

1.4

40

2.01

2.6

Poputninskoye

0

0.00

0.0

37

3.23

3.9

4.4

2.90

0.4

42

3.20

4.3

Zmeinoye

0

0.00

0.0

0.9

4.98

0.1

2.0

4.48

0.3

2.9

4.64

0.4

Chertovo Koryto (ChK)

0

0.00

0.0

67

1.52

3.3

7.8

1.31

0.3

75

1.50

3.6

Bamskoye

0

0.00

0.0

15

1.83

0.9

5.1

1.58

0.3

20

1.77

1.1

Medvezhy

0

0.00

0.0

0

0.00

0.0

6.5

1.85

0.4

6.5

1.85

0.4

Totalv

234

1.54

11.6

1,916

1.83

112.5

1,122

1.87

67.5

3,272

1.82

191.5

 

Comparison of Polyus Mineral Resources estimates as at 31 December 2018 and as at 31 December 2017

Depositiii

2017
MI&I Mineral Resources

2018
MI&I Mineral Resources

Tonnes

Grade

Gold

Tonnes

Grade

Gold

(Mt)

(g/t)

(moz)

(Mt)

(g/t)

(moz)

Mines in Operation

Olimpiada

454

2.97

43.5

440

2.93

41.5

Blagodatnoye

413

1.43

18.6

405

1.38

17.9

Titimukhta

12

2.40

0.9

12

2.46

0.9

Verninskoye

234

1.56

12.0

231

1.58

11.7

Alluvials

258

0.23

1.9

242

0.22

1.7

Kuranakh

250

1.12

9.0

242

1.12

8.7

Natalka

558

1.87

33.6

552

1.87

33.2

Development and Exploration Projects

Sukhoi Log

887

2.03

58.0

962

2.10

63.3

Panimba

40

2.00

2.6

40

2.01

2.6

Poputninskoye

42

3.20

4.3

42

3.20

4.3

Zmeinoye

2.9

4.64

0.4

2.9

4.64

0.4

Chertovo Koryto (ChK)

75

1.50

3.6

75

1.50

3.6

Bamskoye

20

1.77

1.1

20

1.77

1.1

Medvezhy

6

1.85

0.4

6.5

1.85

0.4

Totalv

3,252

1.82

189.9

3,272

1.82

191.5

 

 

 

Competent persons

The Ore Reserve and Mineral Resource estimates are classified and reported according to the JORC Code reporting requirements. All material assumptions and technical parameters underpinning the estimates in the announcement have been reported previously, have not materially changed, and continue to apply.

The Competent Persons responsible for each estimate of Ore Reserves and Mineral Resources are:

·    Mr Mark Chesher, AMC Principal Mining Engineer (Olimpiada open pit, Verninskoye, Chertovo Koryto, Kuranakh, Blagodatnoye, and Natalka Ore Reserve estimates).

·    Mr Mikhail Satarov, Polyus Director of Department of Reserves and Operational Exploration (Titimukhta and Alluvials Ore Reserve estimates, Titimukhta, Alluvials, Panimba and Zmeinoye Mineral Resource estimates. and all stockpile estimates).

·    Mr Peter Cunningham, AMC Principal Mining Engineer (Olimpiada Underground Ore Reserve estimate).

·    Mr Ingvar Kirchner, AMC, Principal Resource Geologist (Kuranakh, Poputninskoye, Chertovo Koryto, and Medvezhy Mineral Resource estimates).

·    Mr Dean Carville, AMC, Principal Resource Geologist (Sukhoi Log, Olimpiada, Verninskoye, Bamskoye Mineral Resource estimates).

·    Mr Alex Virisheff, AMC, Principal Resource Geologist (Blagodatnoye Mineral Resource estimate).

·    Mr Mohan Srivastava, Micromine Consulting Services, Principal Consultant (Natalka Mineral Resource estimate).

All Competent Persons are Members of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, or approved Recognized Professional Organisations, and have sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Persons as defined in the JORC Code.

In reporting the Mineral Resources and Ore Reserves referred to in this public release, AMC and Micromine acted as independent parties, have no interest in the outcomes of Polyus projects, and have no business relationship with Polyus 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, Micromine and the Competent Persons believe that there is no conflict of interest in undertaking the assignments which are the subject of the statements.

Polyus

The Polyus group is the largest gold producer in Russia and one of the top 10 gold miners globally with the lowest cost position. Based on its 2018 Ore Reserves, the Polyus group ranks third by attributable gold reserves among the world's largest gold mining companies.

The Polyus group's principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Sakha Republic (Yakutia).

 

 

Enquiries

Investor contact

Victor Drozdov, Director Investor Relations

+7 (495) 641 33 77

[email protected]

Media contact

Victoria Vasilyeva, Director Public Relations

+7 (495) 641 33 77

[email protected]

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.

 

[i] Summaries reported on 24 January 2019 for Sukhoi Log and 5 June 2017 for all other deposits can be viewed at:

http://www.polyus.com/en/media/press-releases/sukhoi-log-mineral-resources-update/

http://www.polyus.com/en/media/press-releases/ore-reserves-and-mineral-resources-update/

[ii] Using a gold price assumption of US$1,250/oz

[iii] The estimates for all deposits are presented on a 100% Polyus ownership basis

[iv] For the Alluvials, cubic metres (m3) have been converted to tonnages using the general bulk density factor of 1.85 t/m3 strictly for the purpose of the summary accumulations. Gold grades have been adjusted from g/m3 to g/t accordingly. Contained gold estimates are not affected.

[v] Any minor discrepancies for sums in the table are related to rounding

[vi] Source: Sukhoi Log Mineral Resources Update, PJSC Polyus, 24 January 2019

 


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