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Quick facts

Location Northeast of Magadan, Russian Far East
Mining Open pit with underground potential
Processing 850 Ktpa CIP/Merrill Crowe
1000 Ktpa Heap leach
Ore reserves* 1.5 Moz GE, 4.8 g/t average grade
Mineral resources* 0.5 Moz GE, 8.5 g/t average grade
Production start date 2010
Life of mine 2020

1H 2014 Results

Production 1H 2014 56.9 Gold (Koz), 1.4 Silver ( Moz)
Adj EBITDA 1H 2014 US$ 56 m
Capex 1H 2014 US$ 5 m
TCC 1H 2014 US$ 622/oz (GE)

Overview

Omolon hub is a relatively new part of the Company’s operations created in 2009 and now including 4 operating open pit mines and a few development projects with high-grade open-pittable reserves and significant long-term potential. The deposits are located around the Kubaka CIP plant in the northeast of the Magadan region, which has a processing capacity of 850 Ktpa and full remote infrastructure.

Significant acquisitions and exploration activity in the area allowed Polymetal to consolidate neighbouring licensed areas and unique transport infrastructure, achieving synergies at the Kubaka plant with a significant production volume (up to 220 koz of gold eq.) at low capital costs. It also allowed the Company to convert the Kubaka plant into a regional processing facility, thus creating the Omolon Hub with multiple feeding sources and a substantial processing flexibility.

The Group is carrying out 5 near-mine exploration projects within a 707 km2 exploration area, with the aim of expanding the reserve base of the hub.

The Hub feeding sources:

Operating mines

  • Birkachan open-pit gold mine (followed by underground mining until 2020)
  • Sopka Kvartsevaya open-pit gold and silver mine (since 2010)
  • Tsokol open-pit gold mine (since 2012) followed by underground mining (2016-2019)
  • Dalneye open-pit gold and silver mine (since 2013)

Development projects

  • Oroch gold and silver mine

Near mine exploration projects

  • Pyatinakh
  • Adygaya
  • Burgaly
  • Prognozny
  • Nevenrekan

Location

All parts of the Omolon hub are located in remote unpopulated areas mostly covered with taiga forest with only seasonal access available. Land transportation between various parts of the Omolon hub is possible only in the winter months.

The Kubaka site is accessed by a 362 km winter road from Omsukchan or by 270 km winter road from the port of Evensk located on the sea of Okhotsk. In summer months access is only by light aircraft or helicopter. Fuel, consumables and spares are delivered to Kubaka and Birkachan from January to April.

Sopka Kvartsevaya, located approximately 120 km north-west of Evensk, is connected to Kubaka via a 180 km winter road. Fuel, consumables and spares are delivered to Sopka mostly through the port of Evensk (120 km north-west), which is located on the Sea of Okhotsk, during the summer from June to October.

The Birkachan site is located approximately 34 km from the Kubaka plant to which it is connected by an unpaved all year-round road built by Polymetal in 2010 to 2011.

Due to the remote location electricity is generated on-site by diesel-powered generators

* GE = gold equivalent. Ore Reserves and Mineral Resources are in accordance with the JORC Code (2012). Mineral resources are calculated in addition to ore reserves

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