TIDMPOLY
RNS Number : 5833U
Polymetal International PLC
19 January 2017
Release time IMMEDIATE
Date 19 January 2017
Polymetal International plc
Polymetal acquires interest in Prognoz silver property
Polymetal International plc (LSE, MOEX: POLY; ADR: AUCOY)
(together with its subsidiaries - "Polymetal", the "Company", or
the "Group") is pleased to announce that it has entered into an
agreement with Polar Silver Resources Ltd ("Polar"), under which
Polymetal will participate in the development of the Prognoz silver
deposit in Yakutia, Russia ("Prognoz"). The arrangement will allow
Polymetal to acquire up to 50% indirect interest in Prognoz.
HIGHLIGHTS
-- Prognoz is the largest undeveloped primary silver deposit in
Russia, with JORC-compliant Indicated and Inferred Resources
(estimated by Micon in 2009) of 292 Moz at 586 g/t silver. LLC
Prognoz Silver is the Russian legal entity that holds the mining
and exploration licence for the deposit which covers an area of 56
km2.
-- Under the agreement, Polymetal will acquire a 5% indirect
interest in Prognoz for US$3 million in cash through the purchase
of 10% of Polar's share capital. Polar currently indirectly holds a
50% interest in Prognoz, with the remaining 50% owned by a group of
private investors.
-- Polymetal will have an obligation to undertake 25 km of
diamond drilling, and complete a technical study resulting in an
externally audited JORC-compliant reserves estimate for the
property before 31 March 2019. Total capital expenditures required
to perform the drilling and complete the technical study are
expected at US$ 10 million per annum during FY 2017-2019.
-- Upon completion of the technical study and the reserve
estimate, but no later than on 31 March 2020, Polymetal will have
an option to increase its effective share in Prognoz to 50%. The
consideration for the remaining 45% stake will be determined at the
time of the option exercise. It will depend, among other things, on
spot silver prices and the size of estimated reserves.
-- Should Polymetal decide not to exercise the option, the
agreement will terminate with no further amounts to be paid or
received by the parties.
STRATEGIC RATIONALE
The Prognoz transaction fits well with Polymetal's stated
strategy:
-- Very large high-grade resource with excellent exploration upside;
-- Potential for relatively low-capital and fast development
approach based on open-pit mining and conventional processing;
-- Flexible transaction structure preserving strategic
optionality and deferring any capital allocation decision until the
key geological risk is significantly reduced.
"The transaction structure gives us an inexpensive opportunity
to de-risk the asset before considering a sizeable investment
decision. Prognoz is unique in terms of size and grade. It may, in
time, succeed Dukat as one of the largest primary silver deposits
in the world", said Vitaly Nesis, Group CEO of Polymetal.
LOCATION
The Prognoz licence is located in the Verkhoyansk municipal
district in the Republic of Sakha (Yakutia), part of the Russian
Far East. The property is located 444 km north of the regional
center, Yakutsk (population of approximately 300,000), and
approximately 220 km southwest of the municipal center, Batagai
(population of approximately 3,700). The site is remote with
seasonal access from Batagai by winter road. There is no
infrastructure at or near the property.
GEOLOGY
The licence area is located within the Verkhoyansk mobile belt
of northeastern Yakutia. Silver-lead-zinc mineralization,
represented by quartz-carbonate-sulphide veins, is located in a
sequence of sedimentary rocks composed of Triassic sandstones and
siltstones. Nine mineralised zones are defined, with zones Glavnaya
and Boloto being the largest (strike length of up to 2 km) and
explored in more detail. Average vein thickness is 3 m.
Historical exploration
Prognoz was discovered in 1973. Further prospecting and
evaluation activities were undertaken between 1987 and 1998 with 89
drill holes totaling 17,806 m completed at the property. Between
2006 and 2008, an intensive in-fill drilling program aimed at the
expansion of resources was completed with 873 drill holes totaling
78,925 m. Since 2009, the asset was on care and maintenance. A
JORC-compliant resource estimate for the deposit was prepared by
Micon in 2009. Resources were estimated up to the depth of 400
metres. As part of the resource estimate, pilot plant testwork was
performed, demonstrating robust silver recovery levels into both
gravity and flotation concentrates.
Prognoz Mineral Resources estimate in accordance with the JORC
Code (2012) as at 30 May 2009
Tonnes Ag Grade Ag Content
--------------------
(Mt) (g/t) (Moz)
-------------------- ------- --------- ---------------
Indicated 5.86 773 146
Inferred 9.64 473 147
Indicated+Inferred 15.5 586 292
Notes: Silver cut-off grade of 100 g/t
In addition to the resource estimate, Micon performed an
evaluation of the conceptual mineral potential for 18 of the other
known mineralised zones which were not included in the resource
estimate. The additional mineral potential is estimated between 7.9
- 18.1 Mt of ore at 469 g/t silver for 119 - 273 Moz of silver
contained.
Enquiries
Media Investor Relations
---------------- ----------------- ----------------------------------------------------
FTI Consulting +44 20 3727 1000 Polymetal ir@polymetalinternational.com
Leonid Fink Maxim Nazimok
Jenny Payne Evgenia Onuschenko +7 812 313 5964 (Russia)
Maryana Nesis +44 20 7016 9503 (UK)
---------------- ----------------- -------------------- ------------------------------
Joint Corporate Brokers
----------------------------------- ----------------------------------------------------
Morgan Stanley RBC Europe Limited
Sam McLennan Tristan Lovegrove
Richard Brown +44 20 7425 8000 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQLIFERLSIALID
(END) Dow Jones Newswires
January 19, 2017 02:00 ET (07:00 GMT)
Polymetal (LSE:POLY)
Historical Stock Chart
From Apr 2024 to May 2024
Polymetal (LSE:POLY)
Historical Stock Chart
From May 2023 to May 2024