Polymetal International has acquired the Komarovskoye gold field from Kazzinc in Kazakhstan, the company said in a press release on April 4.
“Polymetal International plc is pleased to announce that it has entered into a binding agreement with Kazzinc LTD, a subsidiary of Glencore plc, for the acquisition of Orion Minerals LLP, the holding company for the Komarovskoye Gold Deposit in the Republic of Kazakhstan,” the company said. Komarovskoye is located in the northern Kostanay Region and covers an area of 104 square km.
The acquisition of Komarovskoye is in line with Polymetal’s processing hub strategy and provides a high grade, open-pittable and easily accessible ore feed for its processing facilities at the nearby Varvara (also known as Varvarinskoye) gold and copper mine. Polymetal will mine and deliver by rail and process at Varvara up to 1mn tonnes of ore annually, with the potential to increase Varvara’s annual production by approximately 70,000 ounces of gold at lower cash costs. Komarovskoye ore will partially replace the lower-grade own feed at the leach circuit and will significantly extend its life of mine.
The rationale behind the sale of the mine by Glencore is most likely Kazakh legislation that in 2011 granted the National Bank a priority right to buy all locally produced gold. Kazakhstan increased its gold holdings by 16% to 7.13mn ounces in 2015, according to the IMF. As of January 2016, Kazakhstan has been increasing gold reserves for 39 months amid instability on the global financial markets.
The initial investment is expected to be less than $5mn as the mine fleet will be mostly transferred from Varavara and complemented by contractors. Ore processing at the Varvara plant is expected to start within three months after transaction completes, the press release says. “Komarovskoye has long been in our sights as a natural close fit for our Varvara hub. We are very excited about the transaction which is expected to strengthen production profile, lower costs, and provide substantial incremental cash flows at Varvara in the near term” the press release quotes Vitaly Nesis, Group CEO of Polymetal, as saying.
As of 31 December 2015, the mine’s resources were estimated at 28mn tonnes at 1.5g/t gold containing approximately 1.4mn ounces. Resources are estimated only to the depth of 280m, while mineralisation is traced to the depth of 450m. The asset comprises an active open pit mine and a heap leach facility with an annual capacity of 500,000 tonnes with grid power available on site.
Mining at the property commenced in 2006 and has been focused on the oxide mineralisation, which now is largely depleted. Over 200,000 ounces of gold was produced so far. Mining of primary ore and its sale to Varvara commenced in 2010. A total of over 1mn tonnes at an average grade of 2.5 g/t have been processed at Varvara in 2010-2013, with average recovery of 88%, the press release said.
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