19 Sep 2016 07:00
Release time |
IMMEDIATE |
Date | 19 September 2016 |
Polymetal International plc
Licence renewal and mineral resource estimate for the Viksha project
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce the maiden Mineral Resource estimate audited by AMC Consultants Pty Ltd ("AMC Consultants") for the 100%-owned Viksha project.
HIGHLIGHTS
· The Viksha is a palladium, platinum, gold and copper deposit located in the Republic of Karelia, part of the Russian Federation, which is approximately 90 km north of the regional capital Petrozavodsk (population 300,000) and approximately 450 km from St. Petersburg. The infrastructure in the area is well developed with easy access to grid power, paved roads, and railway. Polymetal's 100%-owned subsidiary holds a 20-year mining licence for a project area of 47 km2.
· Polymetal acquired the property when it had a prospecting licence in 2012. A total of 166 diamond drill holes totalling 22,145 meters, were completed between 2012 and 2014. Application for a mining licence was filed in Q3 2015 and granted on July 18, 2016.
· The Mineral Resources estimate was independently audited by AMC Consultants in accordance with the JORC Code (2012) and comprises 213 Mt of Indicated and Inferred Resources averaging 0.98 g/t of combined precious metals and 0.1% of copper. Total content of precious metals is estimated at 6.6 Moz making Viksha one of the largest open-pittable PGM resources in the world. Resources have been constrained by generating a series of optimum pit shells. The pit depths vary from 240 m to 305 m below surface.
· Polymetal intends to complete a feasibility study ("FS") for an Ore Reserve estimate for Viksha by Q3 2019. Provided the development decision based on the FS is positive, the asset could enter production in 2022.
"Viksha successfully delivered our maiden PGM resource", said Vitaly Nesis, Group CEO of Polymetal. "I believe that the project's size, combined with the absence of significant technical challenges, makes it a unique investment opportunity within the global PGM space".
MINERAL RESOURCE STATEMENT
The Mineral Resource statement for Viksha has been audited and reported by AMC Consultants - an independent consultant - in accordance with the JORC Code (2012) as presented below.
Viksha project open-pittable Mineral Resources as of 1 March 2015
Tonnes | Grade | Content | ||||||||
Mt | Pd, g/t | Pt, g/t | Au, g/t | Cu, % | Pd, Moz | Pt, Moz | Au, Moz | Cu, Kt | ||
Viksha | Indicated | 27 | 0.6 | 0.2 | 0.1 | 0.1 | 0.5 | 0.1 | 0.1 | 29.6 |
Inferred | 52 | 0.6 | 0.2 | 0.1 | 0.09 | 1.0 | 0.3 | 0.2 | 49.5 | |
Kenti | Inferred | 98 | 0.6 | 0.2 | 0.1 | 0.11 | 1.9 | 0.6 | 0.4 | 109.6 |
Shargi | Inferred | 36 | 0.6 | 0.2 | 0.1 | 0.08 | 0.7 | 0.2 | 0.1 | 31.7 |
Total | Indicated+Inferred | 213 | 0.6 | 0.2 | 0.1 | 0.10 | 4.2 | 1.4 | 0.9 | 220.6 |
Notes:
1) A cut-off grade of 0.5 g/t palladium equivalent has been applied. The palladium equivalence formula is based on assumed metal prices and overall recoveries. The PdEq formula is: PdEq = Pd(g/t) + Pt(g/t) * 1.57 + Au(g/t) * 1.61 + Cu(%) * 2.33. The conversion factor shown in the formula for each metal represents the conversion from each metal to palladium on a recovered value basis. The assumed prices in the equivalence equation are 750 US$/oz Pd, 1,180 US$/oz Pt, 1,200 US$/oz Au, and 5,700 US$/t Cu. The assumed flotation recoveries used in the PdEq formula are 76.4% Pd, 71.5% Pt, 74.5% Au, and 78.3% Cu. The assumed refinery payables are: 90% Pd, 90% Pt, 94% Au, and 100% Cu
2) Due to the effects of rounding the sum of individual values will not necessarily equal the total
GEOLOGY
The property lies near the centre of the southern Karelian Craton which is situated within the Archaean granite-greenstone terrain, adjacent to the lower Proterozoic Onega trough.
The ore-bearing gabbro associated with the Koikar sill and host-rock dolerites uniformly occur among the terrigene-carbonate formations. The rock sequence has been incorporated in the synclinal fold. The syncline has an asymmetric structure with gently sloping north-west (15-25°) limb and subvertical south-east limb. The syncline extends for 6.5 km north-south and 1.5 km east-west.
The Viksha deposit comprises three adjacent areas within the north-west limb of the syncline structure: Viksha proper, Kenti, and Shargi. All of them contain platinum, palladium, gold ("Platinum group metals" or "PGM") and copper mineralisation within the Koikar sill gabbro-dolerites. The outcrop of reef-type mineralisation has been traced for over 20 km.
Viksha mineralisation is localized within the stratified sill rocks at the boundary between the lower gabbro and the upper dolerite zones. The sill has a maximum thickness of approximately 235 m. The underlying dolomite sediments are 40-50 m thick. Mineralised zones are clearly stratified with gold and copper predominance in the upper part, and palladium in the lower part of the mineralisation. The platinum-palladium-gold-enriched layer lies approximately 45 m above the sediments. The reef thickness is 5-11m.
MINERALOGY
Mineralisation at the Viksha project is associated with titanium-magnetite, chalcopyrite, and bornite. The most abundant species are Pt arsenide and Pd tellurides. The PGM grain size is 5-9 μm; most PGM are locked or exposed/attached to Cu sulphides, Fe oxides/spinel/ilmenite, and silicate minerals. In contrast, the gold minerals, consisting dominantly of gold-bearing silver and electrum are coarser-grained.
INVESTMENT THESIS
Polymetal believes that the newly established mineral resource of more than 6 Moz of precious metals offers a good probability that a standalone mining operation is both feasible technically and financially viable. Importantly, the geological and metallurgical conditions are favorable:
· The near-surface "reef" shaped mineralisation with contiguous ore bodies of considerable width is amenable to low-cost mechanised bulk open-pit mining. The shallow dip of mineralised zones enables selection of the acceptably low stripping ratios.
· The deposit is located in a well-developed region with excellent infrastructure and plentiful qualified workforce. The property has no population and is covered by forest with no agricultural activity.
· Favourable mineralogy (without nickel) enables conventional flotation process producing bulk copper-PGM sulfide concentrate that can be processed through either PGM refineries or copper smelters with PGM circuit.
COMPETENT Persons
The AMC Consultants review was completed by Mr Ivor Jones - Associate Consultant.
The information in this release that relates to the Mineral Resources is based on, and fairly represents, information, which has been compiled by Mr Ivor Jones who is a Fellow and Chartered Professional (Geology) of the Australasian Institute of Mining and Metallurgy. Mr Jones has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as a Competent Person, as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Jones is a full time employee of Denny Jones Pty Ltd contracted as an associate of AMC Consultants Pty Ltd and has consented to the inclusion of the matters in this report based on his information in the form and context in which it appears.
Enquiries
| Media | Investor Relations | ||
FTI Consulting Leonid Fink Jenny Payne | +44 20 3727 1000 | Polymetal Maxim Nazimok Evgenia Onuschenko Maryana Nesis | ir@polymetalinternational.com
+7 812 313 5964 (Russia) +44 20 7016 9503 (UK) |
| Joint Corporate Brokers | |||
Morgan Stanley Sam McLennan Richard Brown | +44 20 7425 8000 | RBC Europe Limited Tristan Lovegrove Marcus Jackson
| +44 20 7653 4000 |
FORWARD-LOOKING STATEMENTS
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED.