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Alliance News

Polymetal International Swaps Copper-Gold Mines In Logistical Move

Mon, 16th Apr 2018 10:18

LONDON (Alliance News) - Polymetal International PLC said Monday it has agreed to exchange its copper-gold mine in Russia for a majority stake in a mine in Kazakhstan in a deal with Russian Copper Co that will improve logistics for its processing plant.

Polymetal will hand RCC its 100% stake in Vostochny Basis LLC which holds the license to the 1.8 square kilometre copper-gold Tarutin deposit in Russia. In return, Polymetal will receive an 85% stake in LLP Tarutinskoye which holds the license for the 66.4 square kilometre East Tarutin copper-gold deposit in Kazakhstan.

The acquired East Tarutin reserve is estimated to have 6.4 million tonnes of ore at 1.06% copper copper and 0.07 grams of gold per tonne. This is equivalent to 68,000 tonnes of copper and 354,000 ounces of gold.

Polymetal expects to resume exploration at East Tarutin with a new reserve estimate in the first half of 2020.

The Tarutin reserve being swapped out was estimated to be 4.6 million tonnes of ore at 1.39% copper copper and 0.09 grams of gold per tonne. This is equivalent to 63,700 tonnes of copper and 333,000 ounces of gold.

East Tarutin is located on the same side of the Russia-Kazakhstan border as Polymetal's Varvara processing plant in Kazakhstan.

As a consequence, ore haulage distance will be reduced from 150 kilometres to 110 kilometres and no longer involve a border crossing.

"East Tarutin represents a much better fit for Polymetal in terms of logistics and potential size of reserve," Polymetal Chief Executive Officer Vitaly Nesis said. "This asset swap simplifies operational management of the Varvara hub and avoids the complications of cross-border ore shipment while preserving significant exploration optionality."

The transaction does not involve any other payments or deferred consideration as it is simple an asset swap, the company emphasised. The deal is expected to close in the second quarter of 2018.

Shares in Polymetal were 4.3% lower at 646.65 pence on Monday.

By Ahren Lester;

Copyright 2018 Alliance News Limited. All Rights Reserved.

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