Sustained greenfield and brownfield exploration programmes are key to our long-term growth, alongside the cost-effective drive to increase our resource base through the development of next-generation assets.
To optimise our portfolio of exploration projects, we focus on areas adjacent to our processing or potential hubs (brownfield), and on assets with the potential to become sizeable, standalone operations (greenfield). The advancement of all exploration projects is subject to rigorous review through pre-determined project stages, which are linked to our estimate of the resource potential and its economic prospects.
Key 2020 achievements
In 2020, Polymetal succeeded in extending life-of-mine at producing assets and continued to invest in the next generation of assets. Exploration activities were carried out at 68 licensed properties. 34 new licences were obtained for geological studies, exploration and production of gold, silver, platinum group metals (PGMs) and copper. In total, 189 km of drilling was completed. The total capital expenditure on exploration was $35 million; this is 24% lower than in 2019 because of the completion of major drilling campaigns at Yolochka (Omolon) and Perevalnoye (Dukat), as well as lower drilling volumes at Prognoz where exploration has also largely been completed.
- As a result of our exploration efforts, substantial reserve and resource estimates were completed during the year, including:
- An initial JORC-compliant ore reserve estimate for East Bakyrchik (Zone 2 of Kyzyl) extending the life-of-mine at Kyzyl to 30 years. The ore reserves estimate comprises 18.8 Mt of ore at an average grade of 3.7 g/t and containing 2.2 Moz of gold, some 80% of which is underground. Total ore reserves at Kyzyl now stand at 58.3 Mt of ore with an average grade of 5.4 g/t, containing 10.1 Moz of gold. This represents a 19% increase compared with the estimate at the end of 2019.
- A twofold increase in ore reserves to 0.8 Moz of gold at the Kutyn gold project, in accordance with the JORC Code. The updated JORC-compliant open-pit ore reserves estimate comprises 8.4 Mt of ore with an average grade of 3.0 g/t, containing 812 Koz of gold. This represents a 110% increase in gold contained in comparison with the previous reserve estimate prepared in 2015. Mineral resources at Kutyn (additional to ore reserves) amount to 6.6 Mt of ore for open-pit and underground mining with an average grade of 3.7 g/t, representing 785 Koz of gold contained.
- An initial open-pit JORC-compliant ore reserves estimate for Prognoz comprised 7.9 Mt of ore with an average silver grade of 560 g/t, containing 142 Moz of silver. Reserves have been assessed for the Glavnaya (Main), Boloto (Swamp) and Yuzhnaya (Southern) ore zones only. Mineral resources (additional to ore reserves) are estimated at 5.6 Mt of mineralised material with an average grade of 552 g/t for 100 Moz of silver contained. The preliminary feasibility study assumes nine years of open-pit mining with a conventional flotation flowsheet producing clean high-grade concentrate.
- An initial JORC-compliant ore reserves estimate for the Pescherny deposit (Voro hub) comprised 2.1 Mt of ore with an average gold grade of 6.0 g/t, containing 399 Koz of gold. This assumes seven years of open-pit and underground mining. Mineral resources (additional to ore reserves) amount to 0.5 Mt of ore with an average gold grade of 6.5 g/t, representing 97 Koz of gold contained.
- We completed our first field season of joint ventures with junior partners. The results confirmed the potential for further exploration at all target areas.
In 2021, Polymetal will continue to invest in both nearmine and greenfield exploration projects in order to increase ore reserves.
- The key objectives are as follows:
- Complete an updated Ore Reserve estimate at Veduga.
- Prepare an initial Ore Reserve estimate at Talgiy (Albazino hub) and Elevator (Varvara hub).
- Complete an initial Ore Reserve estimate at Tomtor REM project.
- Significantly step up activity levels in greenfield exploration including the start of drilling campaigns at several JVs with juniors.