Polymetal International plc

Polymetal acquires controlling interest in Saum property

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce that it has acquired an 80% stake in Saum Mining Company LLC, a licence holder for the Saum polymetallic deposit ("Saum").

Polymetal has issued 1,120,690 new Company shares ("Consideration shares"), representing 0.26% of Polymetal's total increased share capital in connection with the acquisition of an 80% stake in Saum from an unconnected Russian seller. The total transaction value is approximately US$10.7 million.

Consideration shares are expected to be admitted to trading on the London Stock Exchange on 6 December 2016. Following admission, the total issued share capital of the Company will comprise 428,262,338 ordinary shares of no par value, each carrying one vote.

Location

The Saum licence covers an area of 34.2 km² in Russia's Sverdlovsk region in the Ural mountains. Saum is located 60 km from the town of Ivdel (population of approximately 16,000) and approximately 240 km from Polymetal's Voro processing plant. The closest paved road is 33 km away, the closest unpaved road is 15 km away, and the distance to the closest operational railway spur and power grid is approximately 45 km.

Historical exploration

Saum was discovered in 1971. Throughout the 1970s, 35 drill holes with a total length of 4,264 m were completed at the property. Exploration resumed in 2013 with a total diamond drilling volume of 2,228 m (28 drill holes). Metallurgical testwork and limited geotechnical analysis have also been undertaken. 

Saum Mineral Resources estimate, in accordance with the JORC Code (2012) as at 20 January 2016

Note: Metal prices used for the estimate: Au = US$ 1,200/oz, Ag = US$ 17.0/oz, Cu = US$ 4,500/t. GE means gold equivalent.

Saum is a volcanogenic massive sulfide polymetallic deposit. All identified ore bodies are confined to the package of sandstones and tuffs. Average ore body width is 30 meters with predominantly shallow dip. Resources were estimated up to the depth of 100 metres. The main minerals are gold-bearing pyrite, chalcopyrite and sphalerite. Oxidation is developed to the depths of 10 to 40 m. Mineralisation is open at depth and along strike in the western direction.

The deposit is suitable for open-pit mining. Oxidised ore is amenable to conventional cyanidation with recoveries in excess of 90% and represent potential source of feed for the existing CIP processing plant at Voro. Primary ore can be processed by conventional flotation followed by cyanide leaching of flotation tails with recoveries for all metals in the 80-90% range.

Polymetal is planning to prepare an Ore Reserves estimate in Q4 2017. Further drilling is planned on the property in 2017 and 2018.

"Saum furthers our strategy of accumulating resources for the potential upgrade of the Voro plant with a flotation circuit. High grade, shallow depth, and good infrastructure will enable capital-light and low-cost production from the deposit in the medium-term", said Vitaly Nesis, Group CEO of Polymetal.

Enquiries

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