Polymetal ups estimates at Albazino site

City A.M. Reporter
RUSSIAN precious metals miner Polymetal said it would decide next year whether to double production capacity at its Albazino gold project in Russia’s far east after doubling its estimate of mineral resources there.

“Exploration results at Albazino highlight the tremendous potential of this asset and pave the way for the expansion decision to be taken in the second half of 2013,” Vitaly Nesis, Polymetal chief executive, said in a statement yesterday.

The company, controlled by Russian businessmen Alexander Nesis and Alexander Mamut along with Czech private equity investor PPF, is considering increasing its capacity to 3m tonnes of ore per year, company spokesman Andrey Abashin said, adding that its capital expenditure had not yet been determined.

Polymetal has already invested $270m (£168m) in the project and would need another about $150m to double the concentrator capacity, analyst Sergey Donskoy at Societe Generale said, citing previous management comments.

The company has increased its estimate of mineral resources at Albazino to 5.7m ounces of gold in five ore zones and expects to determine a development plan after completing a study in the second quarter.

Including Albazino, Polymetal has increased its total resources estimate by 30 per cent to 18m ounces of gold equivalent since the start of the year.

Shares closed down 1p or 0.09 per cent at 1,061p.