SE-listed Polymetal International has acquired the remaining 20% stake in Saum Mining Company, which is the licence holder for the Saum polymetallic deposit, in Russia.
The deposit has a resource of 435 000 oz of gold equivalent at 9.7 g/t gold.
Polymetal group CEO Vitaly Nesis explained in a statement on Friday that the Saum deposit fitted perfectly into its vision of extending the mine life of its Voro mine through nearby exploration targets, with the potential addition of a flotation circuit to the existing processing plant.
“High grades and good infrastructure will enable low capital intensity, low costs and a quick route to free cash flow, which further strengthens the rationale for a flotation project at Voro,” he elaborated.
Following a successful exploration drilling campaign at Saum during 2017 and 2018, Polymetal decided to consolidate its ownership in the deposit.
The total consideration for the remaining 20% stake was $7-million, which was paid by issuing about 834 000 new ordinary shares of the company, which represents 0.18% of Polymetal’s share capital.
The Saum licence covers a 34.2 km2 area in Russia’s Sverdlovsk region in the Ural Mountains, which is about 240 km from the Voro processing plant.
Nesis explained that mineralisation at Saum belonged to the classical volcanogenic massive sulphide ore type. Thick near-surface tabular ore bodies ensure feasibility of openpit mining at a relatively low stripping ratio. Production mineralisation remains open down-plunge along the strike.
Saum’s oxide ore is free-milling and will be processed through the existing carbon-in-leach plant at Voro.
Polymetal planned to prepare an initial reserve estimate in the first quarter of 2019, with oxide ore mining activities at Saum expected to start in the second half of 2020