Shares in Polymetal International PLC (LON:POLY) ticked up in early trading Monday after it said it was targeting production in 2021 at its Nezhda gold project in Siberia following the completion of a feasibility study.
The FTSE 250 mining firm said the project had a mineral resource (including ore reserves) of 12.4mln ounces (Moz) of gold equivalent (GE) with an average GE grade of 4.5 grams per tonne (g/t), an increase of 1.6Moz compared to the previous estimate.
The estimate of proved and probable ore reserves also increased by 2.4Moz of GE to 38mln tonnes at an average grade of 3.5g/t GE for 4.4Moz of GE contained.
Open-pit reserves, which comprised 70% of total reserves, increased 55% to 3.1Moz.
Polymetal said the feasibility study had estimated 25 years of production from 2021 to 2045, with the life of mine plan including 19 years of conventional open-pit mining from 2019 to 2037, and 17 years of production from underground ore from 2029 to 2045.
Total cash costs (TCC) for the open pit were estimated in the range of US$620-670 per oz of GE and all-in sustaining cash costs (AISC) in the range of US$700-750 per oz of GE.
Life of mine TCC was expected in the range of US$700-750 per oz of GE, with AISC in the range of US$800-850 per oz of GE.
The company said the first production at Nezhda was planned for the fourth quarter of 2021, with a full ramp-up by the second quarter of 2022. Approval by the Russian regulator was expected in December.
Vitaly Nesis, chief executive of Polymetal, said Nezhda was “a long-life, high-grade asset with robust economics", adding that the project was “capital light” and would contribute to dividends in 2022.
Shares were up 0.9% at 718.4p.