• November 9, 2021

Construction of the Veduga gold project approved by Polymetal Board

Published on November 9th, 2021

The Board of Polymetal has approved a US$ 447 million investment in the 4.0 Moz asset, based on the results of the Preliminary Feasibility Study (“PFS”). First production is expected in Q2 2025.

“The large high-grade reserve base, robust economics, and clear execution path to significant cash flows underpinned the Board’s decision to approve Veduga”, said Vitaly Nesis, Group CEO of Polymetal. “The management is currently planning a full consolidation of the asset in H1 2022”.


  • The updated Ore Reserve estimate as at 1 February 2021 comprises 31.9 Mt of ore with an average gold grade of 3.9 g/t containing 4.0 Moz of gold. This is a 50% or 1.3 Moz increase compared to the previous estimate.
  • Open-pit reserves increased by 89% to 1.4 Moz and now represent 35% of the total Ore Reserves. Underground reserves extended by 35% to 2.6 Moz.
  • Mineral Resources additional to Ore Reserves stand at 8.7 Mt of ore with an average grade of 4.5 g/t containing 1.3 Moz of gold representing an opportunity for significant conversion into reserves.
  • The mine plan assumes 10 years of conventional open-pit mining until 2031 (including pre-production stripping in 2022-2024), and 12 years of underground mining using a skip shaft for hauling from 2030 to 2041.
  • The PFS is based on a 2.0 Mtpa flotation concentrator with dry-stacking of tailings. Flowsheet development has been supported by extensive external and in-house metallurgical testing.
  • Flotation concentrate will be processed at the future POX-2, while volumes in excess of the facility’s capacity will be sold to 3rd parties. Veduga could also potentially become a source of feed for the future Pacific POX project.
  • Average LOM annual production is 200 Koz of gold at TCC in the range of US$ 725-775/oz and AISC in the range of US$ 800-850/oz.
  • First production is planned for Q2 2025 with full ramp-up by the end of Q3 2025.
  • The project will materially contribute to Polymetal’s carbon emission reduction targets. The mine will rely on hydro power ensuring relatively low emission intensity level of 405 kg CO2e/oz GE in 2025-2030 on average (well below the Group’s target of 560 kg CO2e/oz GE by 2030).
  • Total project CAPEX is estimated at US$ 447 million (including capitalised pre-stripping costs) and includes a post-launch skip shaft and underground infrastructure construction of US$ 77 million in 2027-2029. The extended open pit allows to shift underground development capital costs beyond the start-up CAPEX.
  • The project’s IRR is estimated at 19% with NPV of US$ 292 million (using a 10% discount rate, US$ 1,500/oz gold price, RUB/USD exchange rate of 72).
  • Veduga has obtained the status of a Regional Investment Project, so should benefit from reduced income tax for the project in 2025-2028 and reduced Mineral Extraction Tax until 2034.
  • Polymetal currently owns 59.4% stake in Veduga and holds a call option to increase its stake to 100% at a pre-determined price giving VTB a fixed rate of return on initial investment. Following the final statutory clearance which is expected in Q2 2022, Polymetal plans to fully consolidate the asset.


Veduga is a high-grade refractory gold deposit located in a prolific Northern Yenisey gold belt in the Krasnoyarsk Region, the top gold producing region of Russia, 520 km north from regional centre of Kranoyarsk (population of approximately 1.1 mln) and 160 km south from municipal centre of Severo-Eniseyskiy (population of approximately 6,700). Veduga comprises 4 license plots with the total area of 18 sq.km. The property is accessible by an all-year road and has direct access to the federal power grid.

Veduga was discovered in 1977 and extensively explored between 1988 and 1996. Polymetal has been a partial owner of the property since 2006 with the original 50% stake acquired through the JV with AngloGold Ashanti. The new exploration campaign was carried out thereafter. In 2012, mining of oxide ore started. In 2014, initial NI-compliant Ore Reserves and Mineral Resources estimate was prepared. In 2016, open-pit mining of sulfide ore commenced. In October 2018, the Company increased its ownership in Veduga to 74.3%. In 2019, JORC-compliant reserves grew from 1.3 Moz to 2.8 Moz of gold. In April 2020, VTB Bank invested US$ 71 million in exchange for a 40.6% stake in Veduga, while Polymetal was granted a call option to acquire the VTB’s stake at a fixed implied rate of return, and thus increase its share in the asset to 100%.


The Ore Reserve and Mineral Resource estimates are reported on a 100% basis in accordance with the JORC Code (2012) as at 1 February 2021 using a gold price of US$ 1,500/oz and was prepared by CSA Global Pty Ltd. A cut-off grade of 0.7 g/t of gold has been applied for the open pit and 1.8 g/t for the underground.

Read full Announcement

SOURCE: Polymetal International Plc
DATE: November 8, 2021

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