OJSC Polymetal, a wholly owned subsidiary of Polymetal International plc entered into a binding memorandum of understanding with Vitalex Investments Ltd and Arrowline Investments Ltd to acquire a 100% interest in ZAO Maminskaya Gornorudnaya Kompania (MGK), which holds an exploration and mining license for the Maminskoye gold mining field valid until 2023, Polymetal International plc informed.
The agreed enterprise value of MGK is $95.5 million. Completion of the transaction is conditional on prior approval by the Federal Antimonopoly Service of the Russian Federation, completion by MGK of the acquisition of the site, and necessary MGK lenders' consents.
Maminskoye is located in the Sverdlovsk region of Russia, approximately 70 km from the regional capital Yekaterinburg and 30 km from the city of Kamensk-Uralsk (population 130,000). Polymetal's Voro operating mine is approximately 450 km to the north. The license area is 17.8 sq km. Gold was first discovered in the area in 1933, but no systematic exploration took place until 1986. Between 1999 and 2012, 447 diamond drill holes covering a total length of 46 km were made on the property.
The probable ore reserves at Maminskoye have been estimated by Snowden in accordance with JORC guidelines at 12.2 Mt of ore at 1.9 g/t gold.
Polymetal believes that heap leaching is the preferable option to treat mineralized material at Maminskoye, as it is expected to be significantly less capital intensive and likely to result in lower unit operating costs. Lower costs, in turn, may permit expansion of both resources and reserves. Extensive test work is ongoing to determine the optimum parameters (crushing size and stacking height) for heap leaching at the property. Scoping study-level estimates indicate the potential for a 2-3 Mtpa operation yielding 80-120 Koz of gold per year.
"Maminskoye is the type of project Polymetal is keen on – capital-light, low-risk, and with significant optionality," Vitaly Nesis, CEO of Polymetal, was quoted as saying in the company's statement. "The current size of the resource base is not very large, but we are optimistic about its exploration potential and satisfied with the first addition to Polymetal's portfolio of third generation assets."
Polymetal (tax number: 7805104870) is a Russian gold and silver mining company with active enterprises and development projects in Russia and Kazakhstan.
According to the information and retrieval system DataCapital, net loss (RAS) of OJSC Polymetal for H1 2012was RUB 1.211 billion against a profit of RUB 1.711 billion for the same period in 2011. Loss before tax amounted to RUB 1.509 billion against a profit of RUB 2.145 billion.
Net profit (IFRS) of Polymetal International for 2011 rose by 21% to $290 million from $239 million in 2010. Revenue increased by 43.3% to $1.326 billion from $925 million, EBITDA by 47% to $624 million.