Polymetal sells Russian asset

Mining giant Polymetal International has sold its Veduga gold deposit in the Krasnoyarsk region of Russia for twenty million dollars.

The deal with Canadian firm Polygon Gold also sees Polymetal receive 750 shares in the former, taking its stake in the company to 81.8%.

"We believe this transaction allows Polymetal, through its more than 80% stake in Polygon, to benefit from the development of this high-quality asset while preserving management's focus on the company's existing project pipeline," said Polymetal Chief Executive Vitaly Nesis.

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Polygon will operate as a standalone company with independent management, the firm said.

Polymetal plans to provide certain technical and regulatory assistance to the company on an ongoing basis and added that in time it might dilute its equity stake in Polygon if external equity financing is raised.

Veduga has estimated reserves of 1.05 Moz of gold contained in 5.9 Mt at 5.5 g/t and M&I resources (inclusive of reserves) of 2.04 Moz of gold contained in 11.8 Mt at 5.4 g/t.

The asset was part of the joint venture between AngloGold Ashanti and Polymetal from 2007 to 2012.