Polymetal Announces Birkachan and Oroch Resource Estimates
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Saint-Petersburg, Russia, February 20, 2009 - JSC "Polymetal" (LSE, MICEX, RTS: PMTL) ("Polymetal" or the "Company") is pleased to announce the first resource estimate for Birkachan and Oroch properties reported in accordance with the terms and definitions given in "The 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") as published by the Joint Ore Reserves Committee ("JORC") of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia." The Mineral Resource statements presented herein have been prepared by the Company and audited by SRK Consulting (UK) Limited ("SRK"). Birkachan and Oroch are located in the Magadan region in the Far East of Russia approximately 42 kilometers and 130 kilometers by road from Kubaka mine and mill complex respectively and were part of the Kubaka package acquired from Kinross Gold Corporation ("Kinross") in 2008. Kinross is entitled to a variable royalty capped at 2% on all gold production from the properties. Gold mineralization at Birkachan was first discovered in 1986. Birkachan represents a typical epithermal subsurface deposit and is similar to Kubaka in its stratigraphy, mainly consisting of rhyolites and rhyodacites. Birkachan is primarily a low temperature and low sulfidation (neutral) geothermal system. In 2004-2005 Kinross mined a trial pit at Birkachan extracting 471 Kt of high-grade ore at an average grade of 6.7 g/t of gold. This ore was processed at the Kubaka mill with gold recovery averaging 96-98%. Kinross also mined and stockpiled approximately 1Mt of low-grade ore grading 1.9 g/t of gold. These stockpiles (excluded from the following Mineral Resource statement) will be partially used in the summer of 2009 for the large-scale bulk testing of dump leaching at Birkachan. Upon assuming ownership of Birkachan in January, 2008 Polymetal completed 45 diamond drill holes totaling 11,440 meters. The results of this drilling campaign, together with confirmed historic data have been used to prepare the following Mineral Resource statement for Birkachan:
|
Birkachan(1),(2) |
Tonnes (Mt) |
Au grade (g/t) |
Au Metal (Koz) |
Ag grade (g/t) |
Ag Metal (Koz) |
|
Indicated |
|||||
|
-o/p |
15.01 |
1.9 |
926 |
10.1 |
4,873 |
|
-u/g |
0.54 |
7.3 |
126 |
31.8 |
549 |
|
|
15.54 |
2.1 |
1,052 |
10.9 |
5,422 |
|
Inferred |
|||||
|
-o/p |
0.75 |
3.5 |
84 |
15.7 |
379 |
|
-u/g |
1.21 |
6.2 |
242 |
21.2 |
828 |
|
|
1.97 |
5.2 |
327 |
19.1 |
1,206 |
|
Mineral Resources |
|||||
|
-o/p |
15.76 |
2.0 |
1,010 |
10.4 |
5,252 |
|
-u/g |
1.75 |
6.5 |
368 |
24.5 |
1,377 |
|
Total |
17.51 |
2.4 |
1,378 |
11.8 |
6,629 |
|
(1)Mineral Resources are quoted at an appropriate in-situ economic cut-off grades which satisfy the requirement of 'potentially economically mineable' for open-pit and underground mining separately. Furthermore, the commodity prices incorporated into the cut-off grade calculations are US$900/oz for gold and US$13.00/oz for silver. Open-pittable Mineral Resources are derived from application of appropriate cut-offs within optimized shells derived using a gold price of US$900/oz and US$13.00/oz. (2)The in-situ cut off grades for reporting of the Mineral Resources are 0.8g/t Au for open-pittable Mineral Resources and 3.5g/t Au for underground Mineral Resources. |
|||||
This resource estimate supports Polymetal's development plan for Birkachan which is currently the subject of a Feasibility Study, developed to bankable standards and planned for completion during Q4 2009. The scope of the Feasibility Study assumes the development of an open-pit mining operation where Run-of-mine ore is split into two processing streams with high-grade material trucked to and processed at Kubaka mill while low-grade material will be dump leached on the mine site.
Mineralization at Birkachan remains open in one direction along strike and further 3,000 m of diamond drilling and 2,000 of RC drilling are planned at the property in 2009. Polymetal is hopeful of further additions to the resource base at the deposit thus allowing increasing the scale of the potential dump leach operation.
Oroch ore occurrence was discovered in 1979 and in 1980-2005 30,863 meters of drilling was completed on the deposit. Oroch represents an epithermal type of gold-silver formations of Okhotsk-Chukotsk volcanic belt. Ore bodies are mainly composed of quartz and carbonate (up to 90-95%), with lesser amount of hydro-mica and adularia. Spots of native silver are also present. Gold to silver ratio varies from 1:5 to 1:230 but averages 1:45 in zones containing potential economic mineralization. Ore minerals distribution is uneven, nested, ingrained.
The results of the resource estimate prepared by the Company and reported in accordance with the JORC Code are summarized in the following table:
|
Oroch(1),(2) |
Tonnes (Mt) |
Au grade (g/t) |
Au Metal (Koz) |
Ag grade (g/t) |
Ag Metal (Koz) |
|
Indicated |
|
|
|
|
|
|
-o/p |
1.37 |
3.3 |
143 |
143 |
6,284 |
|
|
1.37 |
3.3 |
143 |
143 |
6,284 |
|
Inferred |
|||||
|
-o/p |
0.56 |
3.3 |
59 |
225 |
4,056 |
|
|
0.56 |
3.3 |
59 |
225 |
4,056 |
|
Mineral Resources |
|||||
|
-o/p |
1.93 |
3.3 |
201 |
167 |
10,341 |
|
Total |
1.93 |
3.3 |
201 |
167 |
10,341 |
|
(1)Mineral Resources are quoted at an appropriate in-situ economic cut-off grades which satisfy the requirement of 'potentially economically mineable' for open-pit and underground mining separately. Furthermore, the commodity prices incorporated into the cut-off grade calculations are US$900/oz for gold and US$13.00/oz for silver. Open-pittable Mineral Resources are derived from application of appropriate cut-offs within optimized shells derived using a gold price of US$900/oz and US$13.00/oz. (2)The in-situ cut off grades for reporting of the Mineral Resources are 0.8g/t Au for open-pittable Mineral Resources and 3.9g/t Au for underground Mineral Resources. The gold equivalent factor for silver is 0.010568. |
|||||
Further exploration potential at Oroch remains substantial with several known ore zones which have so far not been explored in detail. 12,600 meters of diamond drilling and 8,000 meters of RC drilling are planned at the property in 2009. The grade at Oroch is sufficiently high to justify transportation to Kubaka mill for joint processing with high-grade Birkachan ore. Potential for dump leaching of low-grade ore on site will also be investigated. The results of further technical studies for Oroch are expected to be completed by Q3 2010.
"Adding almost 1.6Moz of gold resource at Birkachan and Oroch demonstrates huge potential of the assets we bought through Kubaka acquisition," said Vitaly Nesis, CEO of Polymetal. "We are confident that, given existing processing capacity and available infrastructure, production from Birkachan will start in 2010, further enhancing Polymetal's strong growth profile."
Polymetal will continue to provide regular updates on both projects' progress.
Pavel Danilin
VP, Corporate Finance and Investor Relations
Tel. +7-812-334-3666
E-mail: danilin@polymetal.ru
Website: www.polymetal.ru
***
This release includes statements that are, or may be deemed to be, "forward-looking statements". 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. Many factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. These forward-looking statements speak only as at the date of this release. 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.