SUKHOI LOG UPDATE AND PRE-FEASIBILITY STUDY RESULTS
NOVEMBER 2020
ASSET OVERVIEW
BY JORC
RESERVES
- 1globally
JORC P&P
RESERVES
40moz at 2.3g/t
JORC
RESOURCES
67moz at 1.9g/t
6 km
SUKHOI LOG | Verninskoye |
Kropotkin |
145 km
Alluvials
Bodaybo
Taksimo
Irkutsk region
CLOSE PROXIMITY TO OTHER POLYUS ASSETS СREATES OPPORTUNITIES FOR:
Potential economies | Utilisation of existing |
of scale | infrastructure |
2
SUKHOI LOG CONSOLIDATION
2016-2017 | 2017-2020 | 2020 |
PAYMENT
AMOUNT
cash
equity ($ equivalent)
In 2016, Polyus and "Rostec Business Development" ("RT") established SL Gold in order to participate in the Sukhoi Log auction process.
In January 2017, SL Gold submitted the highest bid during the auction in a total amount of ca. $153 mln
In February 2017, SL Gold
was granted a development license.
$ 153 mln
Polyus entered into a number of cash and equity option agreements with RT to consolidate 100% in SL Gold
Polyus acquired a 13.2% stake
for ca. $76.4 mln under cash option agreements and a 13.8% stake for ca. $80.3 mln, which were paid in Polyus' shares.
$ 76.4 mln $ 80.3 mln
In September 2020, Polyus exercised its right to accelerate the buy-out of RT participation interest in SL Gold, converting outstanding equity options into cash obligations
$ 128.2 mln
$ 438MLN
total amount paid
for the Sukhoi Log license
OWNERSHIP
STRUCTURE
Polyus
Rostec
Business Development
49% | 51% | 22% | 78% | ||||||
100%
3
DRILLING CAMPAIGN
OUTCOMES
1
DATASET FOR R&R ESTIMATES
DRILLING DATASET / ESTIMATE BASE
2017 | 2017-2018 | 2018-2019 | 2020 | ||||||||||||||||
HISTORIC DRILLING | POLYUS VERIFICATION | POLYUS EXPLORATION | TOTAL | ||||||||||||||||
DRILING PROGRAM | DRILING PROGRAM | ||||||||||||||||||
DRILLING | 324 km | DRILLING | 46 km | DRILLING | 158 km | DRILLING | 528 km | ||||||||||||
1,185drillholes | 111 drillholes | 523 drillholes | 1,819drillholes | ||||||||||||||||
DRILLHOLES MAP
Historic drillholes
Verification and exploration drilling
Open pit shell
5
MI&I RESOURCES AND P&P RESERVES ESTIMATES
MI&I RESOURCES
2017 | 2020 | ||||||||||||
TONNES | GRADE | GOLD | TONNES | GRADE | GOLD | ||||||||
887mt | 2.03g/t | 58moz | 1,110mt | 1.9g/t | 67 moz | ||||||||
Indicated | 668 mt | 2.1 g/t | 46 moz | ||||||||||
Inferred | 441 mt | 1.5 g/t | 21 moz | ||||||||||
P&P RESERVES | 100% Inferred | 69% Indicated | 31% Inferred | ||||||||||
2017 | 2020 | ||||||||||||
TONNES | GRADE | GOLD | |||||||||||
No data | 540mt | 2.3g/t | 40moz | ||||||||||
100% Probable |
The 2020 Ore Reserve Estimate is the maiden reserve estimate for Sukhoi Log
• probable ore reserves reported
The estimate is
- based on Mineral Resources update as at 31 May 2020
- supported by studies completed by AMC and Wood as part of the PFS
6
VERIFICATION AND EXPLORATION
RESOURCE CATEGORY UPGRADE
2017 | 2020 |
NN
Inferred
Inferred | Indicated |
pit shell
N N
Inferred | Indicated |
Inferred
Verification and exploration drilling produced more comprehensive data on the structure and distribution of the gold in the ore body
A higher density of drillholes and modern analytical techniques applied to a combination of the verification and exploration results and historical data made it possible to determine indicated resources, and, upon demonstration of their economic viability, probable reserves
7
VERIFICATION AND EXPLORATION
ORE BODY REVIEW
2017 | 2020 | |
N | N |
The North-Western part of the ore body was not included into the ultimate pit due to increased depth and lower grades
vs historic data
2017 model pit 2020 model pit
N N
The depth of the central part of the ore body
extended by 100 m
in a North-Easterly direction
2017 Resource pit shell
2020 Resource pit shell
8
GEOTECHNICAL & HYDROGEOLOGICAL DRILLING & SURVEYS
IN DECEMBER 2019, THE COMPANY COMPLETED 18.3 KM DRILLING
FOR THE ENGINEERING AND GEOLOGICAL SURVEYS
GEOTECHNICAL DRILLING
The geotechnical drilling and survey were conducted to establish inputs for the design of the open pit structures
HYDROGEOLOGICAL DRILLING
The hydrogeological drilling and survey describe groundwater behaviour, inflow-rates and inform the design of mine dewatering operations
TOTALTOTAL
10.9 KM | 7.4 KM |
including | including |
5.4 km in 2019 | 2.8 km in 2019 |
2018 drillholes | 2018 drillholes | ||||||
2019 drillholes | 2019 drillholes | ||||||
BOTH STUDIES ARE EXPECTED TO BE FINALIZED BY THE END OF 2020,
AND WILL BE UTILIZED AT THE FEASIBILITY STUDY STAGE
9
DRILLING - NEXT STEPS: 2020 PROGRAMME
IN 2020, DRILLING HAS BEEN CONTINUED WITH FURTHER IN-FILL DRILLING
AND DEEP LEVEL AND FLANK EXPLORATION
IN-FILL DRILLING | DEEP-LEVEL DRILLING AND FLANK EXPLORATION | ||||||
35 KM | DRILLING PATTERN 50х50 M | 25 KM | DRILLING PATTERN 400х200 M | ||||
In 3Q'20, Polyus completed its in-fill drilling programme for 2020 with 35,200 meters drilled, compared to the 30,000 meters initially planned.
The drilling works were focused on the future pit area, where Polyus expects to carry out mining activities during the first years of Sukhoi Log's operations.
This will allow the Company to better define the gold mineralisation within this area and enable more accurate planning and sequencing of the mining works
Polyus also performs additional deep-level drilling aimed at estimating resources below the +290 horizon as it has become evident that the ore body extends below the current limits of the exploration drilling
+1,170 mrl | Cross-cut view |
The license for flank exploration was acquired in 2018. Flank exploration focused on the Northern and Eastern parts of the ore body will confirm the dimensional limits of the ore body and explore potential satellite ore formations
Adjacent license border line
Initial license border line
in-fill drillholes
Verification and exploration drilling limit +290 mrl
[-35 mrl]
new, deep-level drillholes | flank exploration drillholes | |
GEOTECHNICAL DRILLING
The Company decided to roll out an additional 3 km geotechnical drilling programme aimed at assessment | |
3 KM | |
of the future pit wall stability. The results of this programme will be used for the Feasibility Study | |
10
PRE-FEASIBILITY
STUDY HIGHLIGHTS
2
PRE-FEASIBILITY- SITE LAYOUT
A conceptual site layout was developed for the PFS and will be developed further at the later stages of the project's feasibility assessment
NORTH WASTE DUMP
CRUSHING BUILDING
MAINTENANCE BUILDING
DRY TAILINGS STORAGE
OPEN PIT
TAILINGS STORAGE FACILITY
SOUTH WASTE DUMP
PROCESS PLANT
TRUCK SHOP
PERMANENT CAMP
12
OPEN PIT OVERVIEW
The PFS determined the key features of the main pit to enable high volume mining:
Dimensions of 3.5 km along strike and 1.8 km across strike
Overall pit slope angles of 23° in the footwall and from 41° to 47° in the hanging wall
15 m high benches1
Continuous dual-lane access
The PFS design assumes that the mining of the main open pit will be performed
in a series of 5 nested stages, sharing a common footwall
1 - Preblast bench height
2 - Average for the first 10 years of operation 3 - As per JORC report
KEY MINING METRICS
168 mtpa | 33.2 mtpa | 3.252 t:t | 2.33 g/t | up to 2.4 g/t | ||||
MATERIAL | PLANT | STRIP RATIO | AVERAGE GRADE | PLANT FEED | ||||
MINING RATE, | FEED RATE | (WASTE-TO-ORE) | IN MINED ORE | GRADE FOR THE | ||||
RUN RATE | FIRST 10 YEARS |
ULTIMATE MAIN OPEN PIT | OPEN PIT | |||
DIMENSIONS | STAGES | |||
Zapadnoye | Stage 1 | |||
Stage 2 | ||||
Main Pit | Stage 3 | |||
Stage 4 | ||||
Common | Stage 5 | |||
Footwall | ||||
Ramp | ||||
13
MINING EQUIPMENT
100 TONNES (50 M3) NOMINAL PAYLOAD SHOVELS | 300T TRUCK |
Highly cost-efficient | Utilized at peer gold assets |
and reliable for 15 m benches | (Penasquito, Cortez, Blackwater) |
Available from all major suppliers | Highly | Supplied by Hitachi, CAT, | Widely used globally, mainly on copper |
(P&H (Komatsu), WK and CAT) | cost-efficient | Liebherr, Komatsu, Belaz | or copper-molybdenum mines |
460
rope shovels | haul trucks |
2
hydraulic excavators
The PFS assumes that the characteristics of Sukhoi Log ore distribution favors selection of higher bench height (15m) and larger mining unit 25 m x 25 m x 15 m
Lower unit mining cost and schedule benefits currently outweigh | The decision on specific shovel | The final decision on mining |
the impacts of higher dilution and ore loss for the large equipment, | and truck models | equipment sizing will be made |
compared to using smaller equipment and lower bench heights | is driven by the bench height | at the Feasibility Study stage |
14
MINING EQUIPMENT COMPARISON
The mining fleet assumed in the Sukhoi Log PFS is expected to be one of the largest in terms of capacity globally.
This reflects a combination of high bench height and high overall mining rate (168 mtpa)
SHOVELS
Bench Height, m
15 | 15 | 12 | 12 | 15 | 15 | 15 | 12 | 15 | Shovel's average | |||||
10 | 10 | 10 | 10 | capacity, m3 | ||||||||||
6 | 10 | |||||||||||||
68 | ||||||||||||||
50 | 49 | 45 | 45 | 43 | 39 | |||||||||
36 | ||||||||||||||
35 | 34 | 33 | ||||||||||||
22 | 21 | 15 | 14 | |||||||||||
METATES | SUKHOI | PENASQUITO | BLACK- | PARACATU | NEW | CORTEZ | LIVENGOOD | OLIMPIADA | DETOUR | VELADERO | LAGUNAS | ROUND | TARKWA | LOS FILOS |
LOG | WATER | PROSPE- | LAKE | NORTE | MOUNTAIN | |||||||||
RITY | ||||||||||||||
TRUCKS |
15 | 15 | 15 | 15 | 15 | 15 | Bench Height, m | ||||||||
12 | 12 | 12 | Trucks' average | |||||||||||
10 | 10 | 10 | 10 | 10 | ||||||||||
load capacity, t |
331 | 327 | 6 | ||||||||||||
300 | 300 | |||||||||||||
290 | 290 | 268 | ||||||||||||
222 | 220 | 218 | 213 | 181 | ||||||||||
166 | 156 | |||||||||||||
130 | ||||||||||||||
CORTEZ | METATES | DETOUR | SUKHOI | LIVENGOOD | BLACK- | PENASQUITO | NEW | OLIMPIADA | VELADERO | ROUND | LAGUNAS | PARACATU | TARKWA | LOS FILOS |
LAKE | LOG | WATER | PROSPE- | MOUNTAIN | NORTE | |||||||||
RITY | 15 | |||||||||||||
PROCESSING FLOWSHEET DESIGN
CONVENTIONAL GRAVITY - FLOTATION SCHEME
BALL MILL
FLOTATION PEBBLECRUSHER (SABC)
SAG MILL | GRAVITY | FLASHFLOTATION |
CYANIDATION
CARBON-IN-LEACH |
33.2MT
average annual throughput capacity
92%
average recovery rate
2.3G/T
average grade in ore processed (P&P reserves)
ELECTROWINNING
SMELTING |
2.3MOZ
average annual gold production,
LOM JORC
16
PROCESS PLANT DESIGN
3D PROCESS PLANT MODEL
ORE PREPARATION | COARSE ORE STOCKPILE | PROCESS PLANT | ||
GRINDING | FLOTATION | CYCLONING & GRAVITY SEPARATION | ||
FLOTATION TAILINGS THICKENING | DESORPTION / RECOVERY | DESORPTION / RECOVERY | ||
17
COMMINUTION SCHEME
NOMINAL | ||
THROUGHPUT | ||
33.2 mtpa | ||
PRIMARY CRUSHING
The PFS assumed the application of gyratory crushing based on the potential size of operations, ore hardness and the availability of commercial equipment
A gyratory crusher is in operation at Natalka
GYRATORY CRUSHER
QUANTITY
x2
SECONDARY CRUSHING
A conventional Semi-Autogenious Ball Pebble-Crusher scheme was selected for the PFS based on the hardness of the ore and the availability and relative affordability of energy supply
BALL MILL
QUANTITY DIMENTIONS
x2 7.6× 11.9 m
SAG MILL
QUANTITY DIMENSIONS
x1 12.2 × 8.6 m
18
MILLING RATE BENCHMARKING
The configuration and size of the mills for secondary crushing (2 x 40ft SAG and 4 x 25ft Ball mills) proposed
in the PFS are conventional - all major manufacturers supply large SAG mills up to 40ft
This size of processing and milling equipment is common for copper and porphyry (gold-copper) mills.
THROUGHPUT CAPACITY (MTPA)
Primary commodity: | Gold | Copper | Porphyry | |||||||
SAG mill | ||||||||||
(ft*quantity) | 40X2 | |||||||||
40x3 | 40x2 | 40x1 | 40x1 | 40x2 | 40x1 | |||||
34x3 | 36x2 | 36x2 | ||||||||
Ball mill | ||||||||||
(ft*quantity) | 28x2 | 28x2 | 28x1 | |||||||
26x4 | 25X4 | 26x2 | 26x2 | |||||||
24x4 | 24x2 | |||||||||
22x2 | ||||||||||
85 | ||||||||||
55 | ||||||||||
42 | 40 | |||||||||
36 | ||||||||||
33 | ||||||||||
30 | ||||||||||
25 | ||||||||||
20 | 20 | |||||||||
COBRE | SENTINEL | TOROMOCHO | FRIEDA | KING-KING | SUKHOI | TUJUN | NORTH- | CONSTANCIA | CADIA | |
PANAMA | RIVER | LOG | BUKIT | PARKES | ||||||
19 |
GOLD EXTRACTION
SUKHOI LOG FLOWSHEET INCLUDES BEST-IN-CLASS TECHNOLOGIES FOR PROCESSING THIS TYPE OF ORE
GRAVITY AND FLASH FLOTATION
GRAVITY | FLASH FLOTATION |
CONCENTRATORS | FLASH FLOTATION UNITS |
x24 | x8 |
FLOTATION AND CIL
FLOTATION | CARBON-IN-LEACH |
FLOTATION MACHINES | CIL TANKS |
x10 of 630 m3 | x8 of 2,000 m3 |
x5 of 100 m3 |
Significant, but not excessive presence of gravity-recoverable gold
Conventional gravity-flotation scheme was selected for Sukhoi Log to maximize gravity gold recovery
- Combination of gravity and flash flotation results in lower losses at further processing stages
- At Blagodatnoye, Olimpiada and Natalka this combination demonstrates high efficiency
TECHNOLOGY ALREADY USED AT
Olimpiada
Blagodatnoye Natalka
Verninskoye Kuranakh
8 flash flotation units installed
in 2017-2020 across the Company
Key benefits of flash-flotation technology
- Minimized overgrinding
- Improved recovery
A significant portion of gold associated with pyrite
- For higher gold recovery flotation circuit added
Large-volume flotation machines of 630 m3 ensure power efficiency
Polyus has high level of expertise in flotation of this type of ore, as it is similar to ore at Verninskoye
CIL with feed regrind and gravity pre- treatment included to improve efficiency
• Preg-robbing effect on recovery curtailed
A significant amount of organic carbon contained in ore
- Special reagent scheme selected to decrease effect of organic carbon at CIL stage keeping high recovery rate
CN dual stage detox introduced for complete decomposition of all cyanogen compounds
20
RECOVERY ESTIMATE BASED ON TESTWORK PROGRAMME
The samples for testwork originated from contiguous drill core samples to specifically cover as much of the entire ore body as possible and include the expected range of grades the processing plant would see, with a focus on better coverage of the high grades.
From October 2018 to November 2019, a total of 64 mapping samples were tested in the SGS lab.
TESTS RESULTS:
2.05 g/t
Average grade in ore
92%
Recovery rate for the PFS (with 80% confidence)
RECOVERY (AFTER DERATING),
%
100 | Average grade | |
2.05 g/t | ||
95
Recovery rate 92%
90
85
80
75
AVERAGE GRADE IN ORE, G/T
70
0.0 | 1.0 | 2.0 | 3.0 | 4.0 | 5.0 | 6.0 |
21
SUKHOI LOG VS. CURRENTLY OPERATING POLYUS MINES
THE SCALE OF OPERATIONS AT SUKHOI LOG IS COMPARABLE
WITH CURRENTLY OPERATING POLYUS MINES
TOTAL ROCK MOVED,
mln m3
The amount of total rock moved at Krasnoyarsk business unit (KBU) in 2019 exceeds the average material mining rate at Sukhoi Log by 23%
THROUGHPUT CAPACITY,
mtpa
Designed throughput capacity at Sukhoi Log is 45% higher than ore processed at KBU in 2019.
After commissioning of Mill #5 at Blagodatnoye (6-8 mtpa, currently at FS stage), Sukhoi Log throughput capacity will be ca. 10% higher than at KBU
AVERAGE ANNUAL PRODUCTION,
moz
SUKHOI LOG | 60 | 33.2 | 2.3 | |
KRASNOYARSK | 74 | 22.9 | 1.8 | ||
BUSINESS UNIT1 | |||||
OLIMPIADA1 | 50 | 13.9 | 1.4 | ||
BLAGODATNOYE1 | 24 | 9.0 | 0.4 | ||
NATALKA1 | 27 | 11.2 | 0.4 | ||
1 - Company's data for FY 2019 | 22 |
SUKHOI LOG VS OTHER GREENFIELDS1…
SUKHOI LOG IS THE LARGEST GREENFIELD | …WITH STRONG PRODUCTION PROFILE, LONG LIFE | |
ASSET IN TERMS OF GOLD RESERVES… | OF MINE AND ONE OF THE HIGHEST GRADES GLOBALLY | |
P&P | AVERAGE LOM ANNUAL | LOM | GRADE IN P&P | ||||||||||||||||||||
RESERVES | PRODUCTION | RESERVES | |||||||||||||||||||||
Moz | Moz | Years2 | G/Tonne | ||||||||||||||||||||
10 | 7 | 2.33 16 | |||||||||||||||||||||
ROSIA | COTE | SUKHOI LOG | SUKHOI LOG | 2.3 | |||||||||||||||||||
11 | MONTANA | 34 | KSM | 1.3 | 26 | KSM | 2.1 | ||||||||||||||||
NEW | DONLIN | ||||||||||||||||||||||
PROSPERITY | 40 | DONLIN | 0.8 | 28 | DONLIN | 1.5 | |||||||||||||||||
9 | 18 | NORTE ABIERTO | 0.6 | 60 | NORTE ABIERTO | 1.0 | |||||||||||||||||
SUKHOI LOG | METATES | 20 | |||||||||||||||||||||
LIVENGOOD | METATES | 0.6 | METATES | 0.9 | |||||||||||||||||||
13 | 39 | WAFI-GOLPU | 0.5 | 20 | WAFI-GOLPU | 0.7 | |||||||||||||||||
41 | |||||||||||||||||||||||
WAFI- | KSM | NEW PROSPERITY | 0.4 | NEW PROSPERITY | 0.6 | ||||||||||||||||||
GOLPU | 20 | ||||||||||||||||||||||
23 | ROSIA MONTANA | 0.4 | ROSIA MONTANA | 0.6 | |||||||||||||||||||
41 | |||||||||||||||||||||||
NORTE | LIVENGOOD | 0.3 | LIVENGOOD | 0.5 | |||||||||||||||||||
ABIERTO | |||||||||||||||||||||||
COTE | 0.2 | 47 | COTE | 0.4 | |||||||||||||||||||
Source: SNL, companies' data | ||
1 | - Selection includes the largest assets by P&P gold reserves with gold as a primary commodity and with announced annual gold production capacity of at least 200 koz gold as per SNL | |
2 | - Except for Sukhoi Log, LoM (Life of Mine) is calculated as reported gold reserves divided by announced LoM annual gold production. As for Sukhoi Log, LoM is based on reported gold reserves divided by reported average grade and production throughput | |
3 | - Calculated based on JORC Reserves, LoM (see note 2) and recovery | |
23 | ||
SUKHOI LOG VS CURRENTLY OPERATING GOLD MINES1
SUKHOI LOG'S RESERVE BASE IS ONE OF THE LARGEST AMONG BOTH UNDERGROUND AND OPEN PIT OPERATIONS
SUKHOI LOG POSSESSES LEADING ANNUAL PRODUCTION CAPACITY ALONG WITH HIGH GRADE IN RESERVES
P&P
RESERVES
Moz
23 | ||
LIHIR | ||
40 | 20 | |
SUKHOI | ||
CADIA | ||
LOG | ||
EAST | 24 | |
OLIMPIADA | ||
48 | 10 | |
NEVADA | AHAFO | |
OPERATIONS3 |
15
12 | DETOUR | |
10 | BODDINGTON | LAKE |
15 | ||
PUEBLO | ||
VIEHO | NATALKA | |
AVERAGE LOM ANNUAL
PRODUCTIONLOM
Moz | Years2 | |||||||||
3.0 | 16 | |||||||||
NEVADA OPERATIONS3 | ||||||||||
SUKHOI LOG | 2.3 | 16 | ||||||||
OLIMPIADA | 1.4 | 17 | ||||||||
PUEBLO VIEJO | 1.0 | 10 | ||||||||
LIHIR | 0.9 | 25 | ||||||||
CADIA EAST | 0.9 | 22 | ||||||||
BODDINGTON | 0.7 | 17 | ||||||||
AHAFO | 0.6 | 15 | ||||||||
DETOUR LAKE | 0.6 | 25 | ||||||||
NATALKA | 0.4 | 36 | ||||||||
GRADE IN P&P
RESERVES
G/Tonne
OLIMPIADA2.8
PUEBLO VIEJO | 2.5 |
SUKHOI LOG | 2.3 |
LIHIR | 2.3 |
AHAFO1.9
NATALKA1.7
NEVADA OPERATIONS3 | 1.5 |
DETOUR LAKE | 1.0 |
BODDINGTON 0.7
CADIA EAST 0.2
Source: SNL, companies' data | ||
1 | - Selection includes the largest operating assets with gold as a primary commodity, with reported annual gold production of at least 250 koz gold in FY2019 and LoM more than 5 years. Excl. Muruntau due to the absence of reliable data. | |
2 | - Except for Sukhoi Log, LoM (Life of Mine) is calculated as reported gold reserves divided by FY2019 gold production. As for Sukhoi Log, LoM is based on reported gold reserves divided by reported average grade and production throughput | |
3 | - Nevada operations comprise 8 mines along with their associated infrastructure and processing facilities. | |
24 | ||
ECONOMIC
PARAMETERS
3
KEY PROJECT ECONOMIC METRICS
BASED ON PRE-FEASIBILITY STUDY1
PRELIMINARY GOLD PRODUCTION PROFILE
Grade in ore processed, g/t
2.4 | 2.4 | 2.4 | 2.4 | 2.4 | 2.4 | 2.4 | 2.3 | 2.3 | 2.3 g/t |
1.8 | 2.2 | ||||||||
Average | |||||||||
first 10y |
MINING RATE | AVG. WASTE- | BASE THROUGH- | ||
(AT PEAK) | TO-ORE RATIO | PUT CAPACITY | ||
168 mtpa | 3.252 t/t | 33.2 mtpa |
Production, | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 | ||||
2.2 | 2.2 | 2.2 | |||||||||
moz | |||||||||||
0.8 |
2.3 moz
RESERVES | AVG. ANNUAL | |
(P&P) | PRODUCTION | |
40 moz at 2.3 g/t | ~2.33 moz |
Y0 | Y1 | Y2 | Y3 | Y4 | Y5 | Y6 | Y7 | Y8 | Y9 | Y10 | KEY | |||||||
MACROECONOMIC | ||||||||||||||||||
TCC STRUCTURE | ASSUMPTIONS | |||||||||||||||||
390 | $/OZ | MINING COST | PROCESSING COST | GOLD PRICE | ||||||||||||||
59% | 22% | 18% | 1% | $1.6/t | $13.5/t | $ 1,200/oz | ||||||||||||
PROCESSING | MINING | MINERAL | OTHER | PROJECT INITIAL | ||||||||||||||
EXTRACTION | ||||||||||||||||||
TAX | CONSTRUCTION CAPEX | FX | ||||||||||||||||
$ 3.3 bln | 60 rub/usd |
1 | - Subject to optional review and detalisation at further project stages (Feasibility, Engineering, etc.) | |
2 | - Average for the first 10 years of operation | |
3 | - As per JORC reserve estimate | |
26 | ||
CAPITAL COSTS BREAKDOWN
The Estimated Initial Construction | CAPEX is estimated with Pre-Feasibility Study Class | |
CAPEX is in the range of $3.3 bln | 4 estimate with the level of accuracy +/-20% | |
Capital costs are in real USD terms, as of the end of 2019
PROJECT INITIAL CONSTRUCTION CAPEX
CAPEX COMPONENTS,
$ bln
CONTINGENCY
0.4
of ca. 15% to cover unforeseeable items within the scope of the estimate
INDIRECT COSTS | $3.3bln | DIRECT COSTS | |
0.5 | 2.4 | ||
facilities, materials, | The costs of all equipment | ||
services, equipmentand activities | and materials, together | ||
required to support the project | with construction and | ||
during the engineering, | installation costs for all | ||
procurement, construction and | permanent facilities | ||
preoperational testing phases |
0.2 |
0.4 |
0.6
1.2 |
TAILINGS
INFRASTRUCTURE
MINING
PROCESS FACILITIES
27
CAPEX: ESTIMATE EVOLUTION
FROM SCOPING STUDY TO PRE-FEASIBILITY
+ $ 1.0bln
MINING | CAPACITY | FLOWSHEET | TAILINGS | INFLATION | |
& INFRASTRUCTURE | $ 0.2 bln | $ 3.3 bln | |||
$ 0.2 bln | |||||
$ 0.2 bln | $ 0.1 bln | ||||
Inflation from 2017 | |||||
$ 0.3 bln | Increased mining | to 2020 | |||
Flowsheet modification: | |||||
and processing capacity | |||||
$ 2.3 bln | |||||
Throughput capacity | • Addition of flash | driving increased | |||
increase from 30 | flotation cells | infrastructure | |||
Higher mining equipment | to 33.2 mtpa | • Modified equipment | requirements | ||
CAPEX due to a comprehen- | characteristics based on | Item-by-item estimation | |||
sive update of the mining | |||||
testwork to date | |||||
of the required on-site | |||||
plan with a focus on optimis- | |||||
infrastructure | |||||
ing mining and stripping | |||||
volumes to ensure a smooth | |||||
ramp-up and optimal grades | |||||
in processing | |||||
Pre-production volumes | |||||
increased from 134 | |||||
to 180 MT | |||||
Run-rate achieved in Year 2, | |||||
as opposed to Year 4 | |||||
in Scoping Study |
Initial Construction CAPEX Estimate based on Pre-Feasibility Study increased to $3.3 bln, or +$1.0 bln compared to Scoping Study Estimate
SCOPING STUDY | PRE-REASIBILITY STUDY |
INITIAL CONSTRUCTION | INITIAL CONSTRUCTION |
CAPEX | CAPEX |
28
SUKHOI LOG СAPEX INTENSITY1
based on Pre-Feasibility estimate of capital expenditures, Sukhoi Log ranks favourably in CAPEX intensity and life of mine compared to other greenfield projects
TERMS OF LIFE OF MINE,
YEARS
Bubble size represents LoM avg. Au only production
60KSM
NEW | |||||||||||||||||||||||||||||||||||
PROSPERITY | |||||||||||||||||||||||||||||||||||
40 | FRIEDA | CASINO | |||||||||||||||||||||||||||||||||
RIVER | |||||||||||||||||||||||||||||||||||
DONLIN | NORTE | ||||||||||||||||||||||||||||||||||
ABIERTO | |||||||||||||||||||||||||||||||||||
JOSEMARIA | |||||||||||||||||||||||||||||||||||
NUEVAUNION | COTE | MT TODD | NAMDINI | ||||||||||||||||||||||||||||||||
KINGKING | HARDROCK | ||||||||||||||||||||||||||||||||||
ROSIA | |||||||||||||||||||||||||||||||||||
20 | |||||||||||||||||||||||||||||||||||
MONTANA | VOLTA GRANDE | ||||||||||||||||||||||||||||||||||
COURAGEOUS BACK | LOMA | ||||||||||||||||||||||||||||||||||
SUKHOI LOG | HORNE 5 | ||||||||||||||||||||||||||||||||||
LIVENGOOD | LAKE | RIVER | EVANDER | LARGA BURITICA | |||||||||||||||||||||||||||||||
PAUL | MASSAWA | ||||||||||||||||||||||||||||||||||
JEANETTE | SALARES | ||||||||||||||||||||||||||||||||||
BLACKWATER | NORTE | MAOLING | ISNARD | MAGINO | BOMBORE | PASSENDRO | |||||||||||||||||||||||||||||
CAPEX INTENSITY, $/OZ ANNUAL OUTPUT | |||||||||||||||||||||||||||||||||||
0 | 5 | 10 | 15 | 20 | 25 | 30 | 35 |
Source: SNL, companies' data
1 - Selection includes projects with announced production capacity of at least 200 koz of gold as per SNL
29
PFS ESTIMATES VS. SCOPING STUDY
SCOPING STUDYPFS
THROUGHPUT CAPACITY | 30.0MTPA | 33.2MTPA |
RECOVERY | 88-90% | 92% |
TCC | $ 420-470/OZ | $ 390/OZ |
INITIAL CONSTRUCTION CAPEX | $ | 2.3BLN | $ 3.3BLN |
AVERAGE ANNUAL GOLD | 1.6MOZ | 2.3 MOZ |
1 | ||
PRODUCTION, LOM | ||
1 - As per JORC reserve estimate
30
INFRASTRUCTURE
DEVELOPMENT
4
OFF-SITE INFRASTRUCTURE OVERVIEW
POWER GRID
Existing electricity facilities
(~3 MW) enable Polyus to launch the construction at Sukhoi Log
To cover operational power needs (~229 MW) Polyus has already signed an agreement with Federal Grid Company (FGC) for technological connection of Sukhoi Log
to the existing power grid
To secure sufficient power supply, FGC will construct ~1,000 km
of 500kv grids from Ust-Ilimskaya HPP to Taksimo and upgrade substations
A gas-powered station may potentially be constructed in the area close to Sukhoi Log as part of development of Russian Railways network, which may further improve the reliability of the Sukhoi Log power supply
AIRPORT TRANSPORT
Polyus owns a 61% stake in a local airport, Bodaybo, ~145 km south-west of Sukhoi Log. However, the airport infrastruc- ture, including runway, is state-owned, due to legal limitations
Polyus is preparing a PFS on airport infrastructure improvement and a reconstruction of the runway, which is expected to be completed in 2020-2021
The upgrade will streamline access to Sukhoi Log for employees and time-critical cargoes
The national project "Comprehen- sive plan for the modernization and expansion of core infrastruc- ture" provides direct state funding for the upgrade of state-owned airport facilities in the amount of 4.35 billion rubles in 2022-2024
Irkutsk region
Chertovo
Koryto
SUKHOI LOG
Verninskoye
Kropotkin
145 km
Alluvials
Bodaybo | Novaya Chara |
Taksimo
Polyus has completed the assessment of logistic requirements and expects to conduct surveying of bridge and road infrastructure required for construction and operation of Sukhoi Log as part of the Feasibility Study. This will help to better evaluate options of their upgrading
At the same time, Polyus is discussing with state and local authorities options for financing this infrastructure
Additionally, Polyus has launched an engineering study for storage expansion at Taksimo (to be completed in mid-2021), and also an engineering study of a local railway station expansion to be presented at the Russian Railways' Investment Committee expected in 2021
32
SUKHOI LOG POWER SUPPLY CHAIN
POWER SUPPLY INFRASTRUCTURE REQUIREMENTS
SUKHOI LOG | |||
Peleduy | |||
Vitim | Verninskoye | ||
GENERATION | NPS-9 | Kropotkin | |
NPS-7 | |||
SCOPE | |||
Ust-Ilimskaya Hydro Power Plant | Ust-Ilimskaya | ||
CURRENT STATUS | Hydro Power Plant | ||
Mamakan | |||
Constructed | Ust-Kut | ||
Novaya Chara | |||
Severobaykalsk | Taksimo | ||
LOCAL GRID
AND CONNECTION
TO LONG-DISTANCE GRID
SCOPE
Vitim Substation and 5km of gridline from the substation to Sukhoi Log
FINANCING
LONG-DISTANCE GRID
SCOPE
Construction of ~1,000 km
of 500kv grids from Ust-Ilimskaya HPP to Taksimo and upgrade
of substations by FGC
FINANCING
Federal Grid Company (FGC)
CURRENT STATUS
FGC and Polyus signed binding "technological connection agreement"
The contractor for the engineering design is being selected, design to be completed by 2021 YE
Polyus
CURRENT STATUS
Sep 2020
Engineering contractor selected
Mid 2021
Engineering design is expected
2022-2023
Construction
33
UPDATE PROJECT TIMELINE
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
ENGINEERING | |||||||||||||||||
Initiation | |||||||||||||||||
Scoping study | |||||||||||||||||
Pre-feasibility | |||||||||||||||||
Feasibility study | Final investment decision | ||||||||||||||||
Investment decision | |||||||||||||||||
Project Design Documentation | |||||||||||||||||
Regulatory procedures, GGE | |||||||||||||||||
Plant construction permit | |||||||||||||||||
Detailed Design | |||||||||||||||||
PROCUREMENT
Mining equipment for start of pre-production
Tenders and Contract Awards, Fabrication, Delivery to Site and Assembly
Process plant equipment
Tenders and Contract Awards, Fabrication, Delivery to Site
CONSTRUCTION & PRE-PRODUCTION
Open Pit
Pre-production Mining
Process Plant and Infrastructure | Plant building construction, equipment installation |
Tailings Storage Facility
COMMISSIONING
First gold poured
34
NEXT STEPS
FEASIBILITY & COMPLEX | PILOT | |
ENGINEERING STUDIES, ESIA | TESTING | |
PILOT PLANT 3D DESIGN
With the PFS being completed, Polyus is instantly moving to the Feasibility Study stage to proceed with more accurate technical and financial analysis of the selected development option for Sukhoi Log
The results of the FS will serve as the basis for the final investment decision on the project
Polyus is also currently carrying out an Environmental and Social Impact Assessment (ESIA) to evaluate the likely impacts prior to decision-making
Polyus has already started complex engineering studies, which outcomes will be incorporated in ESIA and FS
Polyus has fully replicated the flowsheet developed in the PFS at its R&D center in Krasnoyarsk and is currently pilot testing the processing technology on ore samples from Sukhoi Log (2 ore samples of 5t each)
Pilot tests are aimed at:
- Specifying the operational parameters for gravity separation and flotation circuits
- Optimizing design parameters
- Generating various products for vendor testing and
- Continuous testing of the CIL circuit
The pilot tests are expected to last till December 2020, the results are expected in 2021
THICKENING
AND FILTRATION
SCREENINGFLOTATION
1ST STAGE OF GRINDING
FLASH FLOTATION
REGRINDING
GRAVITY
2ND STAGE OF GRINDING
GRAVITY TAILS
THICKENING
35
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Disclaimer
OAO Polyus published this content on 10 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 11:28:04 UTC