Polyus Gold could invest $357 mln-$403 in Natalkinskoye field in 2011, Verninskoye field to receive $160 mln
MOSCOW. March 4 (Interfax) - OJSC Polyus Gold could put $357 million-$403 million in the development of the Natalkinskoye gold ore field in the Magadan Region if the second stage of the field's development is approved this year, the company said in its materials.
According to the company's materials, $17 million was invested in prep operations at the Natalkinskoye field in 2010. Total investment for the field since 2003 has come to $274 million. The company intends to invest around 31 billion rubles in 2011-2013 in the construction of the field's second section. Production is expected to start up at the end of 2013 with average annual output at 500,000 ounces (15.6 tonnes) of gold from the processing of 10 million tonnes of ore with gold content at 1.96 grams per tonne (2.1 grams per tonne in 2014-2021) at a cost of $600 per ounce. If the field's second and third sections are given the green light, production at the field will increase to 50 tonnes of gold a year after 2020.
Polyus Gold will invest $160 million in the Verninskoye field in the Irkutsk Region in 2011 compared to $32 million during the previous year. The project's launch is slated for the fourth quarter of 2011. The first section will have 183,000 ounces (5.7 tonnes) of production a year from 2.2 million tonnes of ore.
The company earlier said that it intends to earmark up to$ 800 million in capex, which is more than double the figure for 2010 (around $362 million).
According to the company's materials, production costs for gold in 2010 could have increased by 40% owning to technical difficulties in processing sulphide ore at the Olympiad field and the start-up operations at Blagodatninsky GOK during the year. Polyus Gold's total expenditures in 2009 came to $391 per ounce, a figure that increased to $515 per ounce for the first half of 2010.
According to the management's preliminary estimates, cash funds, their equivalent and short-term investment came to $482 million as of December 31, 2010 (compared to $486 million a year previous).