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Polymetal greenlights Nezhda gold project construction after positive study

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Polymetal greenlights Nezhda gold project construction after positive study

Polymetal International PLC approved starting construction at the Nezhda gold project in Russia after a feasibility study outlined a net present value, discounted at 10%, of US$302 million and an internal rate of return of 29%.

The study, based on a conventional 1.8 million-tonne-per-annum concentrator, envisages open pit mining volumes of 2.2 mtpa over 19 years from 2019 to 2037 followed by 17 years of underground mining from 2029 to 2045. Project construction is expected to last until 2021.

Incorporated in the study was total proved and probable ore reserve of 38.0 million tonnes grading 3.4 g/t gold and 15 g/t of silver for 4.2 million ounces of contained gold and 18.6 Moz of silver. Total measured and indicated resources at Nezhda amount to 3.0 Mt grading 3.7 g/t gold for 400,000 ounces of contained gold.

Total CapEx is set at US$234 million, with initial CapEx pegged at US$204 million, and will be funded with free cash flow.

In the open pit mining stage, all-in sustaining costs are expected at between US$700/oz and US$750/oz of gold equivalent, with all-in sustaining costs estimated between US$800/oz to US$850/oz of gold equivalent over the mine's entire life.

The Russian gold miner expects to secure final approval from the federal anti-monopoly service in the current quarter, with mining activities to begin upon securing the agency's approval. Mine construction will begin in the first quarter of 2019, and commissioning and first production will occur by the fourth quarter of 2021. Full ramp-up is expected by the second quarter of 2022.