Polymetal International (POLY.L, AUCOY) has recently published a first resource estimate on its 100%-owned Viksha Palladium-Platinum-Gold-Copper project located in the Republic of Karelia approximately 450 kilometers from St Petersburg.
The company completed 166 diamond drill holes for a total of 22,145 meters of drilling, and this resulted in a large open pittable resource estimate containing 213 million tonnes of rock with an average grade of 0.98 g/t combined precious metals and 0.1% copper. That’s indeed relatively low-grade but unlike the underground Palladium-Platinum mines in South Africa, the entire Viksha project is open pittable, and the company’s consultants already took the pit shells into consideration, and every single tonne of the 213 million tonnes seems to be pit constrained.
Polymetal seems to be very excited about the resource estimate as the project is located in a well-developed region with existing infrastructure and skilled labor. As there are no deterious elements (such as nickel) in the ore body, Polymetal plans to produce a copper-PGM sulphide concentrate which could easily be processed through copper smelters with a PGM circuit or pure PGM refineries, which keeps a lot of options open.
The project contains a total of almost 500 million pounds of copper, 900,000 ounces of gold, 4.2 million ounces of Palladium and 1.4 million ounces of platinum. If we would now consider this to be a platinum project and apply a recovery rate of 75% for the other metals, the average rock value per tonne is $23.45 (based on $725 Pd, $1050 Pt, $1300 gold and $2.25/lbs copper which is higher than the current spot prices), of which $18.39/t consists of revenue from by-product metals.
The next step at Viksha will now be to complete a feasibility study which will take up to three years, and unfortunately this means the news flow from Polymetal on this project will very likely remain limited, considering it’s not really a core asset (yet?).
Go to Polymetal’s website
The author has no position in Polymetal International. Please read the disclaimer
