Offering US$9.25 million in cash, Russian gold-silver producer Polymetal (MICEX-L) has trumped an earlier offer by MacRitchie Metals for a 100% stake in the Svetloye gold project owned by Vancouverbased junior Fortress Minerals (FST-v).
Fortress accepts the superior bid and will pay MacRitchie a break fee of US$250,000.
The Svetloye deposit, in Russia’s Far East, has an inferred resource of 20.1 million tonnes grading 2.21 grams gold per tonne for contained gold of 1.43 million oz.
The remote project, in an area of little or no infrastructure, is about 750 km southwest of Magadan, 220 km southwest of Okhotsk, and roughly 80 km from the Pacific Ocean.
Okhotsk is the access port used by Polymetal’s existing Khakanja gold-silver mine. Currently, supplies and personnel are transported to Svetloye by regular commercial aircraft from Khabarovsk to Okhotsk (about 1,300 km), then to the site either by helicopter or winter road, depending on the time of year.
One option Polymetal is considering is to truck ore from Svetloye to Khakanja for processing. Polymetal’s strategy is to create centralized processing facilities for the treatment of material from different sources.
“Svetloye represents a unique opportunity to broaden our late-stage exploration effort in the region and potentially add several years of mine life for Khakanja,” Vitaly Nesis, Polymetal’s CEO, stated in a press release.
The sale is still subject to approval by Polymetal’s board of directors. If the deal goes ahead, the transaction is expected to close before the end of August.
With Svetloye comes an 84.6-sq.- km exploration and mining licence, valid until Dec. 31, 2030.
Previous owner Freeport-Mc-MoRan Copper & Gold (FCX-N) explored Svetloye during the 2003 and 2004 field seasons. During that time it identified a large zone of epithermal gold mineralization. With 28 drill holes (3,687 metres) and roughly 550 metres of surface trenching, Freeport discovered seven targets within the licence area: Elena, Larissa, Tamara, Tamara North, Gorki, Ludmilla and Amy.
Polymetal owns gold and silver mines in three regions of Russia: the Magadan region, where it operates the Dukat and Lunnoye silver mines (and the Lunnoye satellite of Arylakh), the Khabarovsk Territory, where it operates the Khakanja mine (together with its satellite Yurievskoye) and the Sverdlovsk region, where it operates the Voro gold mine.
Polymetal also operates the Varvarinskoye gold-copper deposit in Kazakhstan.
Last year, Polymetal’s gold production grew by 9%, to 311,000 oz. gold, and its silver production expanded by 1% to 17.3 million oz.
This year, the company hopes to produce 350,000 oz. to 370,000 oz. gold and 19 million oz. to 20 million oz. silver. (These numbers do not include any production from the Varvarinskoye mine in Kazakhstan.)
By 2012, Polymetal aims to more than double gold production to 630,000 oz. gold and its silver production by 50%, to 25.6 million oz.
At presstime, Fortress Minerals was trading at 12.5¢ a share. The company has a 52-week trading range of 11¢-51¢.
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