Gold projects like Sukhoi Log take 7-10 years to launch in Russia - resource agency chief
MOSCOW. Feb 10 (Interfax) - Gold fields like Sukhoi Log, one of the world's biggest, take seven-to-10 years to put on stream in Russia, Yevgeny Kiselyov, head of the Russian Federal Subsurface Resources Agency (Rosnedra), told reporters.
A joint venture between No. 1 Russian gold miner PJSC Polyus and the state Rostec corporation won an auction for the rights to Sukhoi Log, which is in Russia's Irkutsk region, on January 27.
"The timeframe depends on the exploration plan. Exploration has to be rounded off there, among other things. An appraisal was completed without taking reserves into account, without additional volumes of work, and they are necessary. I've told my colleagues that the technological characteristics of the field, the hydro-geological characteristics require further study to determine when the field can go commercially on stream. Fields like this usually take seven-to-10 years," Kiselyov said.
Kiselyov has said in the past that follow-up exploration alone would take three-to-five years, although the license holder would be entitled to move the schedule back if difficulties are encountered.
Polyus estimates that follow-up exploration and the feasibility study for Sukhoi Log might take three or four years. The deposit's reserves to Russian classification are currently estimated at 62.8 million ounces of gold or 930.3 million tonnes of ore graded at 2.1 g/t for gold.
Capex might run to 90 billion-100 billion rubles and production to 80-90 tonnes of gold and to 20-25 tonnes of silver per year, the Natural Resources Ministry has said.
More than 80% of Sukhoi Log's gold can be mined by the low-cost open-cast method. The open-pit operation might last 33 years, with remaining resources mined year-on-year the underground method over a period of 20 years.
Polyus has said it sees "multiple synergies" with its established operating assets - the Irkutsk region is core to the company's operations and Sukhoi Log is located just 20 km away from the Verninskoye deposit. Polyus also has extensive alluvial operations via Lenzoloto in the region and has completed building the Peleduy-Mamakan grid, key component of the power infrastructure supporting the group's operations in the Irkutsk region, in 2015. The Sukhoi Log and Verninskoye ores have similar mineral and chemical composition, the Company will evaluate the applicability of the processing solutions implemented at Verninskoye to the Sukhoi Log deposit.