Polymetal buys remaining 20% in Saum polymetallic field for $7 mln
MOSCOW. Sept 28 (Interfax) - Polymetal has acquired the remaining 20% stake in Saum Mining Company LLC, the license holder for the Saum polymetallic deposit, bringing Polymetal's stake in the property to 100%.
The deal is worth $7 million paid with Polymetal shares. The number of issued shares was determined by dividing $7 million by $8.39, the spot price of ordinary shares of the company on the London Stock Exchange as at market close on September 25, 2018. The seller received 0.18% of Polymetal shares.
The new shares will be admitted to trading on the London Stock Exchange on October 1. Following admission, the total issued share capital will total 453,425,681 shares.
"Our strategy at the Voro field is increasingly focused on extending the life of mine through nearby exploration targets, with the potential addition of a flotation circuit to the existing processing plant. Saum fits this vision perfectly. High grades and good infrastructure will enable low capital intensity, low costs, and a quick route to free cash flow, which further strengthens the rationale for a flotation project at Voro", Vitaly Nesis, Polymetal CEO said.
The field resources have been estimated at 1.39 million tonnes of ore with an average grade of 9.7 grams/tonnes, meaning 435,000 ounces of gold equivalent.
Polymetal is planning to prepare an initial reserve estimate in Q1 2019. Oxide ore mining activities are expected to start in H2 2020.
The Saum field is suitable for open-pit mining. The oxide ore can be refined using standard cyanidation with extraction of over 90% and is potential feedstock for the existing CIP plant at Voro. Saum's oxide is amenable to conventional flotation followed by cyanide leaching with extraction of 80%-90% for all metals.
According to the SPARK-Interfax system, the 20% stake in Saum Mining Company had been held by Vladislav Rekhin, the beneficiary of a number of assets in the Far East including Okhotsk Commerical Port LLC.