Dukat Hub

Quick facts

Location: Northeast of Magadan, Russia
Mining: mostly underground
Processing: 1500 Ktpa concentrator and 300 Ktpa Merrill Crowe plant
Production FY2012: 36.2 Koz of gold and 19.2 Moz of silver
Ore reserves (JORC): 5.1 Moz gold eq. (at an average grade 8.3 g/t)
Mineral resources (JORC)^*: 2.3 Moz gold eq. (at an average grade 7.3 g/t)
Production start date: 2000
Life of mine: 2023
Adj EBITDA FY2012: 378 US$m
Capex FY2012: 49 US$m
TCC FY2012: 12.1 US$/oz silver

Overview

The Dukat hub, situated in the Magadan Region in the Russian Far East, is one of Polymetal’s original assets. It is the third largest silver deposit in the world, the largest primary silver operation in Russia and our flagship operation.
The Dukat hub was created in 2008 by merging the Dukat and Lunnoye operating units located in geographic proximity to each other and sharing many support and auxiliary services. The hub consists of the Omsukchan concentrator which process ore from the Dukat and Goltsovoye mines, and the Lunnoye processing plant which processes ores from the Lunnoye and Arylakh mines, as well as concentrate from the Omsukchan facility. The Dukat hub also includes the Nachalny-2 where mining commenced in 1Q 2012.
Polymetal is also carrying out few near-mine exploration projects with the aim of expanding the hub’s reserve base.
The hub feeding sources:

Operating mines

• Dukat open pit (2002-2012) and underground gold and silver mine (2011-2021)
• Lunnoye underground gold and silver mine (2000-2023)
• Arylakh open pit gold and silver mine (2007-2013)
• Goltsovoye underground silver mine (since 2011)
• Nachalny-2 open pit silver mine (2012-2013)

Development projects

• Lynnoye (zone7) silver mine
• Arylakh underground gold and silver mine (2013-2016)

Near mine exploration projects

• Perevalny
• Krasin
• Dukat ore zone

Location

The Dukat hub is located in the Magadan region in the Russian Far East. Magadan has an international airport with regular direct flights from Moscow, St. Petersburg and Khabarovsk.

Omsukchan (population of approximately 4,500 people), the location of the Dukat hub’s management and the concentrator facility, is approximately 566 km north-east of the city of Magadan and is connected to Magadan by an unpaved road.

All operating units are located in close proximity to the Omsukchan: Dukat mine (38 km), Goltsovoye mine (80 km), Lunnoye operating unit (172 km) and are accessible by all year-round roads.

Fuel, consumables and spares are delivered to the all-season port of Magadan by regular freight carriers from the Russian ports of Vanino and Nakhodka. As there is no railway system in the region and road transport would be less reliable and more expensive, the principal access to Magadan is by sea. Climatic conditions are severe, with long cold winters and short, occasionally hot, summers. The surrounding area is very sparsely populated and mostly covered with tundra forest.