Polyus thinking of using GV Gold's existing recovery plants for Sukhoi Log project - paper

MOSCOW. March 23 (Interfax) - Polyus is interested in acquiring GV Gold's Golets Vysochaishy asset in the Irkutsk region's Bodaibo district, the Kommersant newspaper said, citing its own sources.

The asset consists of three gold recovery plants, an assay laboratory, an open pit mine and gold placer mine and a mining village. The plants have throughout capacity of 5 million tonnes of ore per year and produced 87.1 koz of gold in 2021.

Kommersant said Polyus was interested in the asset due to its proximity to its flagship Sukhoi Log gold deposit in the Bodaibo district. The GV Gold plants could potentially process some of Sukhoi Log's ore. Polyus had at one stage thought about using existing facilities, including the neighboring Golets Vysochaishy, although in the baseline scenario it planned to process ore from Sukhoi Log at specially built facilities.

The pre-feasibility study for Sukhoi Log calls for producing 2.3 moz of gold from 33.2 million tonnes of ore per year.

Polyus has postponed the completion of a bankable feasibility study due to the geopolitical situation. Viktor Drozdov, a member of the board of directors, said at an investor event in mid-March that the feasibility study was now expected in the second half of 2023, and various options for implementing the project, including speeding it up, were being considered.

Buying buildings and equipment might be a more effective solution than building a plant from scratch, said Boris Sinitsyn of Renaissance Capital, who also drew attention to the differing scales of the Sukhoi Log and GV Gold plants. "So it might be split into stages: commissioning less capacity, but sooner, and ramping up to 30 million [tonnes] later," he said. In any case, there is a theoretical opportunity for Polyus to reduce risks and capex and to speed the project up, but the nature of the Sukhoi Log ores will probably require that the recovery plants be re-equipped, he said.