Polyus Gold estimates Nezhdaninskoye capex at $580 mln, launch in 2016
MOSCOW. Oct 5 (Interfax) - Polyus Gold estimates capex in the Nezhdaninskoye gold project in Yakutia will total $580 million and that a recovery plant will be commissioned in 2016.
The plant will use the BIOX leaching method to process 1 million tonnes of rebellious ores per year, James Nieuwenhuys, chief operating officer, said during the Minex 2011 forum in Moscow.
Initial gold recovery is estimated at 200,000 oz per year.
Polyus Gold also intends by 2016 to commission a plant to process 1 million tonnes of ore and recover 100,000 oz gold at the greenfield Bamskoye site in the Amur region at a capital cost of $232 million.
A heap leaching facility should go into service at Poputinskoye and Panimba in the Krasnoyarsk territory in 2016-2017 to process oxidized ore and recover 40,000 oz gold annually. Polyus Gold will also look into the possibilities for leaching the field's sulfide ores, and if tests are positive a plant for 2.5 million tonnes ore could be commissioned in 2018, producing 220,000oz in 2019. Estimated capex is $462 million.
Polyus Gold intends in 2011-2012 to test a leaching pad at its Chertovo Koryto field in the Irkutsk region, a pilot plant might recover 6 tonnes of gold from 700,000 tonnes of ore per year, while a feasibility study for a 2.5 million tpa plant costing an estimated $426 million should be performed in 2013.
Polyus Gold in July 2011 unveiled an updated development strategy to 2020 that said targeted investment in expansion at $8.7 billion in 2011-2020, including $4.7 billion by 2015. Polyus Gold would boost output at its Russian fields 170% to 115 tonnes pr year by 2016, ranking it among the world's top five gold producers. Starting from 2016, launch of new projects at the Bamskoye, Nezhdaninskoye, Poputninskoye/Panimba and Chyortovo Koryto deposits would increase annual gold production by 20 tonnes.
By 2014, mining and processing capacity at the Blagodatnoye field will increase to 8 million tonnes of ore, with $164 million capex and a further $82 million invested in mining equipment. Investment in the Kuranakh deposit will be $207 million, plus $96 million for equipment in 2012-2015. Polyus Gold may by the end of this year decide to expand the Verninskoye recovery plant at a cost of $271 million.
Polyus Gold should be producing 137 tonnes of gold by 2020 i the recovery plant at the Natalka field hits capacity of 40 tonnes per year by then. Polyus Gold has so far decided to build the first stage of a plant at Natalka to produce 500,000 oz or 15 tonnes per year at a cost of $1.2 billion.
The company aims to be producing 43.6 million tonnes (1.4 million oz) in Russia this year - as much as it produced in 2010 when it included the assets of Kazakhstan's KazakhGold in its totals and when it was ranked the world's tenth biggest gold producer.
Polyus Gold's Nieuwenhuys said the company would be prepared to look at major new projects after 2016.
"We're too busy right now," he said, when asked whether the company was interested in the giant Sukhoi Log field in the Irkutsk region. "We don't have the capacity right now," he said.
Regarding the merger that Polyus Gold has announced with a view to ranking among the world's top three gold miners, Nieuwenhuys said the company would do all it could to raise its appeal for such a transaction, focusing on its growth strategy and on obtaining a premium listing for Polyus Gold International in London.
The company was renamed Polyus Gold International following the reverse takeover (RTO) on July 26, 2011, in which KazakhGold acquired 89.14% of Polyus Gold and was renamed Polyus Gold International.
Nieuwenhuys said the Kazakh assets were attractive enough for Polyus Gold to continue to develop in the event the sale of those assets to their former owners falls through and the Asaubayev family's AltynGroup is unable to buy them. The assets would need several hundred million dollars of investment, though. Other companies are prepared to work in a joint venture to develop the projects, he said.
Polyus Gold might develop the assets on its own, form a joint venture or sell the assets if the deal with the Asaubayevs does not come off, he said.
Polyus Gold International in September extended the deadline for the sale of its operating subsidiaries to AltynGroup Kazakhstan until October 12, 2011.
Polyus intends to sell KazakhGold's production assets to their former owners, the Assaubayev family, for $509 million in two stages by the end of 2012. In the first phase, AltynGroup was supposed to buy out controlling stakes of 51% in Kazakhaltyn (Kazakhstan), Romaltyn Mining and Romaltyn Exploration (Romania) and Norox Mining Company (Kyrgyzstan), as well as 34% of Kyrgyzstan's Talas Gold Mining (equivalent to 51% of KazakhGold's stake in the company) for $260 million.
The future buyer provided the seller with a letter of credit in the spring for $100 million which, if the Assaubayev family pulls out of the deal, must be converted into KazakhGold/Polyus Int shares at a price markedly higher than their market price.