The Dukat deposit covers 11 sq km and comprises 87 distinct ore veins (only eight of them are fully depleted) and 34 ore zones. Ore bodies dip steeply, with an average width of 0.6 to 21 m. The five largest ore zones display continuity over several hundred metres and account for 85 per cent of ore reserves of the deposit. The largest ore body has a maximum thickness of up to 21 m, a strike length of approximately 1.2 km. Major ore minerals include silver sulphides and silver sulphasalts, as well as native silver and native gold associated with sulphides.
|Location||Magadan Region, Russia|
1.8 Mtpa flotation (Omsukchan),
425 Ktpa Merrill-Crowe (Lunnoye)
|Reserves (JORC)||1.9 Moz GE, 4.3 g/t average grade|
|Resources (JORC)||1.0 Moz GE, 9.0 g/t average grade|
|Production start date||2000|
|Life of mine||2023 (Lunnoye), 2023 (Dukat)|
The Dukat hub is currently the world’s third largest silver deposit and one of Polymetal’s very first key assets in Russia.
The hub was set up in 2008 by merging the Dukat and Lunnoye operating units that are united by geographic proximity and technological interdependence. They share several support and auxiliary services including maintenance, planning and budgeting, supply chain management, human resources and payroll.
Today, the Dukat hub consists of the Omsukchan concentrator, which processes ore from the Dukat and Goltsovoye mines, and the Lunnoye processing plant, which processes ore from the Lunnoye and Arylakh mines, as well as concentrate from the Omsukchan concentrator. In addition, Polymetal is carrying out several near-mine exploration projects with the aim of expanding the hub’s reserve base.
The Omsukchan concentrator is currently operating above its nameplate capacity of 1,800 Ktpa, setting a new throughput record of 1,938 Kt in 2016. The concentrator operates using conventional sulphide flotation technology that is tailored to treat different types of feedstock. The Lunnoye processing plant, on the other hand, uses conventional cyanide leaching technology, followed by the Merrill-Crowe process to recover silver and gold from the cyanide solution.
The Dukat hub is based Far East in the Magadan region, in the small municipality of Omsukchan with a population of approximately 3,700. The operation is approximately 595 km away from the city of Magadan, which has an international airport serviced by daily direct flights from Moscow and Khabarovsk, as well as weekly direct flights from Saint Petersburg. Omsukchan has a small commuter airport, with two weekly flights from Magadan. Fuel, consumables and spare parts are delivered to the hub by regular freight carriers via the port of Magadan from the Russian ports of Vanino and Nakhodka.
All operating units are located in close proximity to the hub with accessible all year-round roads maintained by the federal and regional governments: Dukat mine (38 km), Lunnoye operating unit (172 km), Goltsovoye mine (80 km).
The early processing facility began operations in the 1950s by processing tin ore. However, after the discovery of the Dukat deposit, a new 250 ktpa concentrator was built and commissioned in 1978, reaching a capacity of 550 ktpa by 1987. By 1998, the plant was abandoned following the collapse of the Soviet Union and the disruption of concentrate offtake in 1996.
The Group acquired the facility and its related infrastructure, including the mining assets at the Dukat mine, following the liquidation of the previous owner. At that time, Pan American Silver (a public Canadian company) owned the subsoil license for the Dukat mine, so in 2000, CJSC Magadan Silver was formed as a joint venture between Polymetal and Pan American Silver.
As part of the deal, Polymetal recieved an 80% stake in return for contributing the Dukat mine and Omsukchan concentrator, while Pan American Silver received 20% in exchange for the provision of the subsoil license for Dukat. By 2005, Polymetal acquired a 100% stake in the asset.
In 2002, operations at Dukat resumed with underground and open-pit mining, including the re-launch of the Omsukchan concentrator following a major revamp that increased its capacity to 750 Ktpa. Between 2006 and 2007, Section 1 underwent further improvement and debottlenecking, and a new tailing storage facility was constructed. In 2007, a decision was made to expand the Omsukchan concentrator by building an additional processing line (“Section 2”), which was successfully commissioned in March 2010 and increased the concentrator’s capacity to 1,500 Ktpa. By 2014, as a result of further debottlenecking, the concentrator’s capacity was increased to 1,800 Ktpa.
Open-pit mining activites at Dukat were completed in 2015, with underground mining now being the only source of ore.
Goltsovoye is a typical narrow-vein deposit of multiple ore bodies with an average width of 4.6 m. In addition to silver, the ore also contains amounts of lead as well as traces of zinc and copper. The distribution of silver in the veins and geometry of ore bodies is highly irregular and requires a substantial amount of in-fill drilling to convert resources to reserves. Most ore bodies have a medium dip (35 to 45 degrees). They can be traced for up to 565 m along strike and are open down dip. The major ore minerals are sulphides, including galena, freibergite, and other silver sulphides.
Zone 9 comprises five ore bodies with a total strike length of approximately 1,900 m and width varying from 2 m to 12 m. Vertically dipping mineralisation is structurally adjacent to the Lunnoye fault (located in its footwall) and is heavily brecciated in places. The most important ore mineral is quartz. Silver is present in the form of sulphides and sulphosalts, while gold is mostly found in free form. The quartz has a distinct white colour and is easy to identify visually. Silver and particularly gold grade distribution within the ore body are highly erratic, requiring significant in-fill and grade control drilling.
At Dukat, underground mining is now the only source of ore. The conditions for underground mining activites are favourable, with competent ore and host rock made more stable by the permafrost extending to a depth of 300 to 350 m. As a result, very little support is required and a mostly sub-level open stoping mining method is used with minor amounts of ore extracted from manual shrinkage stopes. Underground mining at Dukat is characterised by wide, steeply dipping ore bodies with good wall stability and consistent geometry down-dip and along strike. The Dukat underground mine is accessible by multiple adits located near main ore zones and is relatively shallow, with all current and planned working levels located less than 100 m below the valley floor.
Both underground development and stoping at Dukat are fully mechanised, with the use of trackless equipment. The ore is delivered by trucks to a centralised underground railway. The railway transports the ore to the crusher, which is located immediately at the exit of the railway from the underground mine. Ore from the crusher and the adjacent ore storage yard is then transported to the Omsukchan concentrator by contractors.
Underground conditions at Goltsovoye are generally favourable, with competent host rock. The ore is of variable competency, with some weak stopes closer to the surface. All underground workings are located in permafrost, with limited support being provided by steel anchors and wire mesh. The mining methods include sub-level open stoping (50 per cent. of ore, used for steeply dipping relatively wide ore bodies), shrinkage stoping (25 per cent., steeply dipping narrow veins), longwall mining (15 per cent., shallow-dip narrow veins) and inclined room-and pillar (10 per cent., shallow-dip wide ore bodies).
The Lunnoye mine is accessible by two declines driven from the flanks of the ore body. A 10 m crown pillar separates the underground mine from the depleted pit. Underground conditions at the Lunnoye mine are challenging due to the proximity of the fault and, in some places, the significant brecciation of ore and hanging wall, which necessitate significant support structures. Most permanent underground workings are supported either by steel frames, where stability is poor, or by steel anchors and shotcrete, where conditions are moderate. Open stopes are supported by wire mesh and anchors. Ground conditions tend to improve at the lower levels of the mine as the ore body becomes more distant from the fault.
Both underground development and stoping at Lunnoye are fully mechanised, with the use of trackless equipment for drilling (long-hole production drill rigs and development jumbos), mucking (LHDs), and trucking (underground trucks). Ore is transported directly to the surface and then to the processing plant by contractors.
The Omsukchan concentrator uses conventional sulphide flotation technology, with each section designed to treat different types of feedstock. To achieve optimal results, extensive geotechnological testing is employed to determine the suitability of a particular ore for one of the sections and to assist in the selection of technological parameters (feed rate and reagent addition).
Section 1 is designed to treat simple metallurgical ores from the Dukat mine which typically yield higher recoveries with lower reagent consumption and generate concentrate that is amenable to cyanidation. The processing circuit comprises three-stage grinding (one SAG mill and two ball mills) followed by flash flotation and conventional flotation.
Section 2 is designed to treat ores that are technically more complicated, including feedstock from Goltsovoye, Lunnoye and old stockpiles. The processing circuit comprises two-stage grinding (one SAG mill and one ball mill) followed by gravity concentration, flash flotation and conventional flotation.
The final product (concentrate) from both sections is fed to a high-rate thickener where it is filtered, dried, cooled, and loaded into big bags. Every big bag is sampled and tested to estimate silver recovery in cyanidation and, depending on the result of this testing, concentrate is trucked either for leaching to the Lunnoye plant or to the port of Magadan for further shipment to a third-party off-taker.
At the Lunnoye plant, concentrate from the Dukat concentrator is mixed with ore from the Lunnoye and Arylakh mines and is processed into zinc precipitate via agitated-tank cyanide leaching and the Merrill Crowe process. Precipitate from the Lunnoye mill is transported back to the Omsukchan concentrator for drying, homogenisation, sampling and packing. Dry sampled precipitate is shipped to a third-party refinery for toll-refining into doré bars and is subsequently sold.
|Ore reserves||Tonnage, Mt||Gold grade, g/t||Silver grade, g/t||Copper grade, %||GE grade, g/t||Gold, Koz||Silver, Moz||Copper, Kt||GE, Koz|
|Mineral Resources||Tonnage, Mt||Gold grade, g/t||Silver grade, g/t||Copper grade, %||GE grade, g/t||Gold, Koz||Silver, Moz||Copper, Kt||GE, Koz|
In 2016, we have continued our efforts in near-mine exploration around the Dukat hub.
17 km have been drilled at the near flanks of the Dukat property at the Khrustalny, Mglystiy and Smeliy ore zones, tracing additional ore bodies to the north at Khrustalny. In 2017, we plan to carry out prospecting activities at the deeper levels of Dukat to confirm the presence of a second horizon of mineralisation and other targets around the Dukat hub area.
- At the Dukat hub, the Company achieved a 70% increase in additional mineral resources. This success was primarily driven by additional exploration at the deeper levels of the Lunnoye deposit and the discovery of previously unknown veins at the Dukat flanks. In 2018, prospecting activities are set to continue at the northern and eastern flanks of Dukat.
- At the Primorskoye property, 6.9 km of exploration drilling was completed at ore zones 1 and 3 with a goal to trace ore bodies along the strike and at depth. In 2018, the Company intends to conduct further prospecting activities at other ore zones with the goal to increase the resource base of the deposit and delineate ore bodies in zones 1 and 3.
- At Perevalnoye, exploration continued by in-fill drilling from the underground with trial ore stoping expected to lead to a material upgrade in resources at the deposit.