Polyus Gold signs cooperation agreement with China Gold
MOSCOW. May 8 (Interfax) - Russia's Polyus Gold has signed a cooperation agreement with China National Gold Group Corporation.
The head of the companies, Pavel Grachev and Song Xin, signed the agreement during Chinese President Xi Jinping's visit to Moscow.
The parties will cooperate in numerous areas, including the procurement of equipment and consumables; engineering, design and construction; and the development of new projects in the gold mining industry, Polyus Gold said in a press release.
Reports have said Polyus Gold, Russia's biggest gold producer, was thinking of bringing Chinese investors into its projects, notably the Natalka project.
"The agreement covers several projects, which we have been discussing for the last two years. The biggest and probably the most advanced of them is the joint development of the Natalka field. We are also discussing China National Gold's participation as an EPC contractor for a new ore processing complex at Blagodatnoye, and much, much more. We're looking at sales of gravitation concentrate, and at supplies of Chinese equipment and inputs for our fields in the far East," Polyus Gold's Grachev told the Rossiya 24 TV channel.
The details about the terms for the Chinese investors to join the Natalka project are still being discussed. The Chinese investment would be proportionate to their stake in a potential joint venture.
The Natalka field, which is in the Magadan region, could go on stream early 2017.
Polyus plans to launch a heap-leaching facility for stockpiled lean ore, an area where the Chinese company has experience, at the Blagodatnoye field.
China National Gold is China's only state-owned gold miner. It heads the China Gold Association (CGA) and is China's only company on the World Gold Council. China Gold includes seven main divisions: Zhongjin Gold, China Gold International, Zhongjin Jewelry, Zhongjin Construction, Zhongjin Resources, Zhongjin Irradiation and Zhongjin Trade.
Polyus Gold mines hard rock and alluvial deposits in the Krasnoyarsk territory, the Irkutsk, Magadan and Amur regions and in Yakutia. The company increased gold production by 3% to 1.696 million ounces in 2014.
Polyus Gold's largest shareholders are the Suleyman Kerimov Foundation with 40.22%, and companies controlled by Gavriil Yushvayev (19.28%) and Oleg Mkrtchyan (18.5%); the free float is 22%.