Polymetal optimistic about newly-acquired gold mine in Russia

Precious metals giant Polymetal said on Wednesday that it got its hands on the Maminskoye gold deposit in the Sverdlovks region of Russia which it hopes will have 'substantial exploration upside'.

Under the deal first announced earlier this year, Polymetal has bought 100% of company ZAO Maminskaya Gornorudnaya Kompania, which holds the deposit and mining licence, for a cash consideration of $3.9m and shares in Polymetal worth $73.4m.

Speaking in February, Polymetal's Chief Executive Officer Vitaly Nesis said: "Maminskoye is the type of project Polymetal is keen on - capital-light, low-risk, and with significant optionality.

"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 said it believes that Maminskoye has sizeable mineral endowment at decent grades and with substantial exploration upside. The miner said the deposit is in a favourable location with excellent infrastructure in a familiar region, 450km away from its own Voro operating mine.

The deposit is estimated to hold 12.2m tonnes of ore at 1.9 grammes per tonne of gold, representing 0.7m ounces of contained gold.

"Scoping study-level estimates indicate the potential for a 2-3m tonnes-per-annum operation yielding 80-120 thousand ounces of gold per year."