On June 25, Polymetal commissioned a mining and processing plant at the Kyzyl deposit in Kazakhstan. It was launched ahead of schedule and with less capital expenditure. In January, the company announced that the GOK will be launched in July 2018. Now Polymetal expects that the total capital costs of the project will be approximately $ 325 million, which is 3% less than expected.
Polymetal is the second largest gold mining company in Russia, in the first quarter of 2018 it produced 214,000 ounces of gold and 6 million ounces of silver. The reserves of the Kyzyl deposit are estimated at 7.3 million ounces, the metal content in the ore is 7.7 g / t.
In an interview with Vedomosti in October 2017, Polymetal CEO Vitaly Nesis estimated the capex for the $ 400 million project. He stressed that Kyzyl is developing successfully, which is due to the simplicity of the project from the engineering point of view and the developed infrastructure in the region.
At a design capacity of 150,000 tons of gold concentrate per month, the factory will be released in three months. Until the end of the year Polymetal plans to produce 80,000 ounces of gold on Kyzyl, and by 2019 to increase production to 280,000 ounces. And if market conditions remain favorable - the average aggregate cash costs will not exceed $ 500-550 per ounce, then production can be increased to 330,000 ounces.
At the same time, the project will almost immediately generate revenue for the company. "We expect that starting from the fourth quarter of 2018, Kyzyl will begin to bring us significant cash flow and net income," Nesis said in the company's message.
"It's rare when a company launches a large project ahead of schedule. But Kyzyl for Polymetal is very successful: the gold content in the ore is high, "says Maxim Khudalov, an analyst with ACRA. At the Kyzyl deposit, mined ore is mined, but Polymetal is focused on working with them, the expert points out.