14 Feb 2011 14:03
For immediate releaseMoscow, 14 February, 2011
Polyus Gold increases P&P reserves of Verninskoye deposit
OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia's leading gold producer, today announces the completion of the reserves audit at Verninskoye deposit, which led to the increase of the deposit's total proved and probable (P&P) reserves to 5.8 million ounces of gold. The reserves audit was conducted by MICON International Ltd.
According to the report proved and probable reserves of the deposit increased to 65.4 million tonnes of ore, or 5.755 million ounces (179.0 tonnes) of the metal at an average grade of 2.7 g/t. This is almost a 3.5 times increase from 1.657 million ounces audited in 2006 (at an average grade of 3.0 g/t). The reserves calculation was based on 0.75 g/t cut-off grade and $1000/oz gold price.
Measured and indicated resources amounted to 75.0 million tonnes of ore, or 6.634 million ounces (206.4 tonnes) of the metal at 2.8 g/t. This is an increase of almost 3 times from 2.248 million ounces audited in 2006. Inferred resources amounted to 52.1 million tonnes of ore, or 2.95 million ounces of gold at 1.8 g/t.
Verninskoye deposit was first discovered in 1974. In 2005 OJSC Polyus Gold acquired CJSC Pervenets - the license holder for the deposit. In 2005-2008 Polyus conducted an additional exploration at Verninskoye. Following this successful exploration programme Polyus recently listed JORC P&P reserves of Verninskoye in the amount of 5.8 million ounces. In addition in 2005-2009 Polyus explored flanges and deep horizons of the deposit. In the end of 2010 Polyus prepared a revaluation of the reserves and submitted it to GKZ (State Expertise Committee).
Verninskoe deposit is located in the Bodaibo district of the Irkutsk region, 20 km from Zapadnoye deposit and 140 km from Bodaibo. Verninskoye deposit is located at the western end of the Sukhoy Log belt, the largest undeveloped gold deposit in Russia.
In 2010 Polyus completed construction of the main building of the plant at Verninskoye; concrete mixer and crushing unit have been installed. Power and heat generating objects have been constructed and heat is provided to the main building, where the construction team is now able to continue assembly of the equipment. Construction of key camp facilities has been also completed in 2010. Construction of an oil products storage and tailing facilities continues. Construction of the plant is progressing on schedule, commissioning of the plant is expected in the end of 2011.
The substantial increase of JORC P&P reserves may result in construction of the second stage of the plant implying gradual enhancement of gold output, which will provide economic benefits for the project taking into account the existing power supply, construction and other infrastructural facilities of the company in the region.
Commenting on the event General Director of OJSC Polyus Gold Mikhail Prokhorov said "A revision of JORC reserves was a result of successful exploration program and allows increasing mineral reserves base of Verninskoye mine. The full-fledged hard rock mining business unit with such solid reserves will undoubtedly favor the development of gold mining industry in prospective Bodaibo district of the Irkutsk region of Russia".
Polyus Gold is the largest gold producer in Russia. Headquartered in Moscow, Polyus Gold's operating mines and development/exploration projects are located in five major gold mining regions of Russia - Krasnoyarsk, Irkutsk, Magadan, Amur regions and the Republic of Sakha (Yakutia). The company produced 1.4 m oz of gold in 2010.
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For investors:
Alexey V. Chernushkin, Director, capital markets and IR
Evguenia V.Buydina, IR manager
+7(495) 641-3377
+7(495) 785-4031
ir@polyusgold.com
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pr@polyusgold.com