Polymetal International Plc struck a deal to up its stake in the Prognoz silver property in Russia to 50% from 5% by issuing US$72 million worth of shares to Polar Acquisition Ltd.
Polar will also receive a net smelter return royalty of between 2% and 4%, dependent on the applicable statutory mineral extraction tax rate at the time when the mine starts commercial production, Polymetal said Feb. 19.
The company intends to conduct 46 kilometers of diamond drilling and metallurgical testing in 2018 and expects an updated JORC-compliant resource estimate in the fourth quarter.
A prefeasibility study and a reserve estimate are expected in the fourth quarter of 2019, with a feasibility study and reserve update scheduled for the fourth quarter of 2020.
An investment decision is scheduled for the first half of 2021, with full production expected to be achieved in 2024.
The deal with Polar is expected to close in the first quarter of 2018.
The remaining 50% stake in Prognoz is owned by a Russian private equity group Garden Ring Capital.