Polymetal Grows Mineral Resources By 29% In 2016 As Grade Rises 11%

Polymetal on track for full year as gold sales grow

LONDON (Alliance News) – Polymetal International PLC on Tuesday said the volume and grade of its mineral resources both grew over the course of 2016 following a step-up in exploration work, but it said the volume and grade of its ore reserves both declined over the year.

The precious metals producer in Russia, Kazakhstan and Armenia said ore reserves at the start of 2017 stood at 19.8 million ounces of gold equivalent, falling 5% from one year earlier. The grade of the reserves fell by 8% to 3.8 grammes of gold equivalent per tonne of ore.

Polymetal said the drop in volume was mainly due to mining depletion and a downgrade at the Varvara mine, partially offset by reserve additions from the new acquisition at Komar, Dolinnoye and an upgrade at Svetloye. The grade decline was due to new, lower-grade additions from Komar.

Mineral resources at the start of 2017 stood at 16.5 million ounces, up 29% from one year earlier, driven by the acquisitions of Kapan and Komar, as well as the initial mineral resources estimates at Levoberezhny and Lichkvaz. The overall grade was up 11% to 4.2 grammes per tonne, mainly caused by Kapan.

Combined, mineral resources and ore reserves rose 5% overall to 36.4 million ounces.

Exploration drilling volumes increased by 40% year-on-year to 324 kilometres, as Polymetal expanded its scope of exploration to include newly acquired assets and joint ventures. Nine new licenses were obtained over the course of 2016, bringing the total number to 86, of which 47 currently involve active exploration activities.

“In the course of 2016 we significantly strengthened the resource base of our operating mines and successfully advanced our long-term growth strategy,” said Vitaly Nesis, chief executive of Polymetal. “In 2017, we plan to focus on converting resource additions into reserves growth. The key elements of this plan involve initial reserve estimates at Nezhda and Kapan as well as material resource-to-reserve conversion at Kapan, Lichkvaz, Omolon and Komar.”

By Joshua Warner