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Mineral resource estimate for Prognoz silver deposit

10 October 2018

Polymetal announces the JORC (2012) Mineral Resource estimate for the Prognoz silver deposit. The fresh estimate upgrades the property’s resources to 256 Moz of silver equivalent at 789 g/t.

“In-fill drilling results exceeded our expectations and strengthened our belief that Prognoz may succeed Dukat as one of the largest primary silver deposits in the world”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

  • The new estimate incorporates data from 532 additional diamond drill holes (71,276 m) completed by Polymetal in 2017-2018.
  • Compared with the previous Mineral Resource estimate completed by Micon in 2009, Polymetal added lead and used higher cut-off grades together with conservative extrapolation parameters to ensure a more robust and reliable estimate. As a result, the new estimate in comparison with the previous one has the following key characteristics:
    • Silver equivalent contained totaled 256 Moz at 789 g/t
    • Pure silver contained decreased by 19% from 293 Moz to 237 Moz
    • Average silver grade increased by 25% from 586 g/t to 731 g/t
    • Average vein width increased by 15% from 1.9 m to 2.2 m
    • The share of open-pit resources comprises 46%
    • The share of resources within the Indicated category increased from 50% to 61%
    • The share of resources in two largest veins (Main and Swamp) increased from 73% to 80%
  • In 2019 Polymetal plans to complete the following work:
    • 24.3 km of diamond drilling to upgrade the existing inferred resources to indicated category. Based on historic experience, the management expects at least 80% conversion rate
    • 15.7 km of diamond drilling to establish new resources on extensions of Main and Swamp Zones along the strike as well as at Lucky, Spring, Faraway, and Sunny veins. Polymetal expects to add at least 60 Moz of contained silver after completing this campaign.
    • Advanced metallurgical testing and detailed geometallurgical mapping of all indicated resources to establish the preferred processing route and tailings storage method. The most likely flowsheet will include both cyanidation and conventional sulfide flotation.
    • Geotechnical studies to establish the basic design criteria for open pit optimization and the selection of underground mining system
    • Comprehensive analysis of potential construction sites and sources of water and construction aggregates

These activities are necessary to complete the Pre-Feasibility Study (PFS) and estimate JORC-compliant ore reserves at Prognoz. The results of the PFS are expected in H1 2020. The delay in timing is largely driven by the need to better understand the limits of oxidation within mineralized material, a key input for the selection of the processing plant design criteria. 

Prognoz Mineral Resource estimate in accordance with the JORC Code (2012) as at 01 August 2018

Tonnage

Grade

Content

 

Kt

Ag, g/t

Pb, %

Ag Eq, g/t

Ag, Moz

Pb, Kt

Ag Eq, Moz

Indicated

 

 

 

 

 

 

 

Open-pit

2,930

779

2.4

833

73

70.9

79

Underground

2,640

842

1.9

917

71

49.0

78

Total Indicated

5,570

808

2.2

873

145

119.8

156

 

 

 

 

 

 

 

 

Inferred

 

 

 

 

 

 

 

Open-pit

1,770

610

2.2

660

35

39.7

38

Underground

2,730

650

1.4

682

57

38.2

62

Total Inferred

4,500

635

1.7

673

92

77.9

99

 

 

 

 

 

 

 

 

Indicated + Inferred

 

 

 

 

 

 

 

Open-pit

4,700

716

2.4

769

108

110.6

116

Underground

5,370

744

1.6

807

128

87.2

140

Total Indicated + Inferred

10,070

731

2.0

789

237

197.8

256

Notes: Mineral Resources are reported on the basis of a 106 g/t Ag cut-off for the open pit component (within an optimized pit shell, based on a US$ 16/oz silver price), and a 240 g/t Ag cut-off for the underground component (below the pit shell). A Pb price of US$ 2,200/t was used for the metal equivalent calculation only. For more information please refer to the JORC Table 1 in the appendix.

The Mineral Resource estimate was prepared by Polymetal and independently audited by SRK Consulting (Russia) Ltd, effective as at 1 August 2018. The review was carried out Robin Simpson, who is employed full-time by SRK Consulting (Russia) Ltd, as a Principal Consultant (Resource Geology). Mr Simpson is a Member of the Australian Institute of Geoscientists (AIG), and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code).

LOCATION The Prognoz licence is located in the Verkhoyansk municipal district in the Republic of Sakha (Yakutia), part of the Russian Far East. The property is located approximately 450 km from the regional center of Yakutsk (population of 300,000) and approximately 220 km from the municipal center of Batagai (population of 3,700). The site is remote with seasonal access by winter road. There is no infrastructure at or near the property.

GEOLOGY The property is located within the Verkhoyansk mobile belt of northeastern Yakutia. Silver-copper-lead-zinc mineralization, represented by quartz-carbonate-sulphide veins, is located in a sequence of sedimentary rocks composed of Triassic sandstones and siltstones. Nine mineralised zones are defined, with Main and Swamp being the largest (strike length of up to 4 km). Mineralized material is partially oxidised with the depth of weathering varying widely dependent on relief and proximity of water table.

ABOUT POLYMETAL Polymetal International (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries – “Polymetal”, the “Company”, or the “Group”) is the top-20 global gold producer and top-5 global silver producer with assets in Russia, Kazakhstan and Armenia. The Company combines strong growth with a robust dividend yield.

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