Polymetal International plc (POLY)
Polymetal International plc
Feasibility Study results and construction approval for POX-2
The Board of Polymetal International plc approved the POX-2 project on the basis of the recently completed Feasibility Study (FS) and authorised the immediate start of construction.
"POX-2 leverages our core technical capabilities and creates substantial value. It also fully de-risks our business model by eliminating dependence on concentrate off-take markets", said Vitaly Nesis, Group CEO of Polymetal. "Emerging trends in the global gold mining industry make POX-2 a crucial element of the Company's long-term strategy".
PROJECT DEVELOPMENT TIMELINE
Polymetal envisages the following conceptual development timeline for the POX-2 Project:
The POX-2 site is immediately adjacent to the current Amursk POX facility within the city of Amursk and will share some of the external infrastructure (gas main, access road, water main) with the existing POX facility. Additional electricity supply will be provided via a new dedicated power line from the regional 110Kw grid.
The project will include a new hydrometallurgical area (POX proper), CIL and intensive cyanidation areas, an oxygen plant, an upgrade to the existing dry tailings facility, reverse osmosis water treatment facility, and several smaller infrastructural facilities (warehouses, maintenance areas, etc.).
POX-2 is designed for processing double refractory concentrates, which contain micron gold particles encapsulated in sulfides (pyrites and arsenic pyrites) together with high concentrations of organic carbon. High carbon content drives high sorption activity (preg-robbing) and dictates the use of high-temperature (240˚С) pressure oxidation compared with medium-temperature (200˚С) oxidation utilized at the existing Amursk POX facility.
Pressure oxidation (POX) was selected as the most feasible processing technology for double refractory ores. It is able to achieve gold recoveries of 96% by utilizing high temperatures, elevated pressure and oxygen to recover encapsulated gold, while conventional cyanidation methods would result in sub-optimal recovery rates of 20-40%. Completed metallurgical tests on Kyzyl and Mayskoye high-carbon concentrates confirm the recovery rate of 96%.
The total design capacity of the POX-2 plant will be 250-300 Kt of concentrate per annum. The design of the new POX facility enables the Company to process feed with different properties without impacting any of the design parameters.
Total capital costs for the construction of the POX-2 project in 2019-2023 are estimated at US$ 431 million, and will be funded out of Company's operating cash flows.
In 2017-2018, Polymetal spent approximately US$ 26 million on POX-2, of which US$ 12 million was for engineering activities and feasibility study and US$ 14 million dedicated to pre-manufacturing engineering with equipment suppliers.
The FS incorporates several important design features that will minimise its environmental impact and mitigate related risks:
The Project will boost social investments as Polymetal plans to invest approximately US$ 6 million into more than 10 long-term projects most important to city residents, as well as our employees and their families. This will include the renovation and upgrade of educational, medical and sports facilities, as well as the enhancement of the Amursk city look and attractiveness. Polymetal also plans to build new apartment buildings that will house 100 families.
POX-2 will create more than 400 permanent jobs and generate approximately US$ 20 million per year in taxes for all levels of government.
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED
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