Polymetal is pleased to announce the acquisition of 100% of the shares of Resource Albazino, from Far East Resources Company
Resource Albazino holds a license for the Albazino gold deposit in Russia«s Khabarovsk Territory.
According to the acquisition agreement, Polymetal purchased 100% of Resource Albazino«s shares, exploration, technological and feasibility study documentation from Far East Resources Company for $US 7 mln. The deal was approved by an extraordinary general meeting (EGM) of Far East Resources Company.
The Albazino deposit is located in the Polina Osipenko municipal district of the Khabarovsk Territory 150 km. to the west of the Nikolaevsk-on-Amur sea port. The size of the licensed area is 82km.2 The license for geological survey and mining operations at the deposit, which was originally granted to Resource Albazino, is valid till January 1st, 2015.
The deposit was discovered in 1989. According to preliminary exploration work conducted by specialists from Far North Resource Company (from 1998-2002), the deposit has two prospective zones with gold mineralization - Anfisinskaya and Olginskaya. These ore zones were considered commercial based on their reserves and ore quality.
Anfisinskaya«s total reserves[1] approved by the State Territory Reserve Commission were 925 th. tons of ore and 9,175 kg. (295 th. oz.) of gold with an average head grade of 9.9 g./t.
The total State approved reserves1 for the Olginskaya were 522 th. tons of ore and 3,603 kg. (116 th. oz.) of gold with an average head grade of 6.2 g./t.
As of now, Polymetal considers the deposit to have not been well studied and sees the possibility of increasing the deposit«s size through exploration works. The Company plans to start up active exploration this year and intends to increase Albazino«s reserves in the short-term to 1 mln. oz. (30 tons) of gold. Polymetal is also looking to approve ore reserves and mineral resources according to the JORC Code in the next six months.
In 2006, Polymetal Engineering, a Polymetal subsidiary, will conduct technological research of Albazino«s ore to determine the optimal processing technology.
The Albazino deposit is considered to be a potentially promising independent green-field project. Polymetal plans to develop the mine using the fly-in-fly-out system due to the deposit«s remote location (the navigation period is 5 months).
Polymeta«s Board of Directors will discuss Albazino«s project development at its October, 2006 meeting.
Commenting on today«s announcement, Vitaly Nesis, Polymetal CEO, said: «The announced acquisition is one more important step toward realizing our strategic priorities - creating second-generation assets. We believe that the development of the Albazino project in the nearest future will help us strengthen the Company«s market position and increase its capitalization».
[1] C1+C2 category according to the Russian classification of reserves and resources and the licensing agreement dated April 20th, 2004
source: Investor Relations Department