Polymetal starts up Nezhda and ramping up to full capacity by April 2022

Following the completion of all construction and commissioning activities, Polymetal’s Nezhda mine successfully produced first gold and silver concentrate on October 16th. This is two weeks ahead of the previously announced target date of November 1st. The concentrator now enters a ramp-up period, and is expected to reach its nameplate capacity of 180,000 oz/y and full design recovery by April 2022.

Nezhda is the fourth largest gold deposit in Russia, located in northeast Yakutia in the Tompon municipal district, approximately 480 km east from the city of Yakutsk. “Starting production on schedule, first announced in Q4 2018, demonstrates Polymetal’s executing strength in the face of multiple challenges,” said Vitaly Nesis, Group CEO of Polymetal. “The mine should ramp-up to full capacity and start generating free cash flows by Q2 2022.”

The 2 Mt/y open-pit mine and combined gravity/flotation concentrator were built in 38 months following the final construction decision. Total project CAPEX by the time of full ramp-up will be approximately $370 million. This year, Polymetal plans to produce up to 30,000 oz of gold equivalent (GE) at Nezhda with average production of 180,000 oz/y in 2022-2024 at an estimated AISC of $850-900/oz. Further production upside is linked to the opportunity of processing ore from the high-grade Prognoz silver deposit 100% owned by Polymetal.

JORC-compliant Ore Reserves at Nezhda are estimated at 4.4 Moz GE at a grade of 3.6 g/t with 24 years of mine-life. Mineral Resources additional to reserves amount to 8.1 Moz GE at 5.1 g/t grade.

Starting from Q3 2022, 100% of energy for Nezhda will be sourced via the power line which is currently under construction. Grid connection will result in a 65% reduction of Green House Gas emissions for Nezhda (from 118,000 t/y to 42,000 t/y) while the emission intensity level is expected to stand at 624 kg CO2e/oz GE in 2023, which is in line with the group’s trajectory for carbon footprint reduction (680 kg CO2e/oz GE by 2025).

Tailings from the plant will be stored in the form of dry cake. No impoundments or dam structures will be required.

Nezhda will create more than 1,000 permanent jobs and generate more than $20 million per year in taxes for all levels of government. The company has invested approximately $1.7 million into various social projects in the region related to education, culture, sports, indigenous people, and health, including $0.5 million for COVID preventive measures.