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Russia's Polyus to launch Natalka gold mine by 2013

29.01.2008

Polyus Gold (PLZL.MM: Quote, Profile, Research, Stock Buzz) (PLZLq.L: Quote, Profile, Research, Stock Buzz) plans to launch what will be Russia's largest gold mine, the $2.5 billion Natalka project, in 2012 or 2013, the company's chief executive said in a statement on Tuesday.

Polyus, which mines nearly a quarter of Russia's gold, expects the Natalka mine in the country's remote northeast to produce over 1.3 million ounces a year of the precious metal -- more than the company's entire forecast production for 2007. Polyus's board, led by billionaire chairman Mikhail Prokhorov, has approved $31.3 million in capital expenditure at Natalka in 2008. It will spend $14 million installing a pilot plant in May and $8.7 million completing a feasibility study.

"We expect our enquiry for state financing of infrastructure development in the area of Natalka will soon be considered by the State Investment Fund," Chief Executive Yevgeny Ivanov said.

Natalka, in Magadan region, is the world's third-largest gold deposit, with reserves of 40.8 million ounces at an average grade of 1.13 grams per tonne to internationally recognised Joint Ore Reserves Committee (JORC) standards.

Polyus, the world's fourth-largest gold company by reserves, plans to more than triple gold output to 3.9 million ounces by 2015. It has forecast 2007 output to be close to the 1.2 million ounces mined in 2006.

The company said it would launch another project, Verninskoye in the Siberian region of Irkutsk, in 2010.

Gold production would amount to 154,000 ounces in 2010 and rise to 206,000 ounces in 2011, Polyus said in the statement.

Investment in the project over the period 2005-2011 would be $208 million, excluding exploration expenses, the cost of the licence and value-added tax, the company said.

Polyus is majority owned by Prokhorov and former business partner Vladimir Potanin, who are engaged in a protracted split of their various shared assets in mining, media and banking.

The company owns what is currently Russia's biggest gold mine, Olimpiada, and is developing several other projects across Siberia and the Russian Far East.


Source: Reuters

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