Page 126 - RusRPTFeb22

diamond sales of $192mn. December rough and polished diamond sales accounted for $254mn, including $241mn of rough diamond sales and $12mn of polished.
Interfax, citing the Ministry of Natural Resources of the Amur region, reported that Petropavlovsk’s FY21 own gold output (excluding third party concentrate processing on POX) totalled 377koz. This implies 108koz of production in 4Q21, including 31koz at Pioneer, 50koz at Malomir and 28koz at Albyn (including Elginskoye). Whilst the total for 4Q21 is 9% above our forecasts, at the mines level, production was 24% behind our estimates at Pioneer, but 20% and 39% above our estimates at Albyn and Malomir, respectively. We note that total 4Q21 production (including third party processing at Pokrovka POX) is unclear so far. We treat the own gold output data as positive for the company.
Alrosa’s Deputy CEO Alexey Filippovsky has said that the total investments to restore the Mir mine might amount to USD 1.2-1.5bn (in current prices) and that the programme will take 6-9 years, with investments to start no earlier than in 2025-26F. Filippovsky expects a positive decision in the middle of this year. He also noted that the economics of the programme were positive.
Alrosa’s Yakutia operations expects faster restoration of Mir mine. Yakutia expects Alrosa to accelerate restoration of the Mir mine. Interfax reported, citing the Acting Head of Yakutia, Aisen Nikolaev. The Russian
region (Alrosa’s shareholder) expects the company to speed up work on the design and beginning of construction of the Mir mine due to the shortage of rough diamonds on global market. According to Nikolaev, the deficit is likely to be L-T, as c20% of the world’s diamond mining enterprises have closed in recent years, amid a depletion of deposit, while new large deposits have not been discovered for several decades. First mining at Mir was previously expected in 2030-31 in case of a positive investment decision (may be made in May; Interfax). A faster launch of the mine should support Alrosa’s operating performance (though only in the L-T).
According to a Polymetal press release, the company has discovered a new deposit, Pavlov (part of the Voro project), which is suitable for open pit mining. According to the initial JORC Mineral Resource estimate, there are 9.7mnt of non-refractory I&I ore resources, with an average grade of 2.7g/t containing 0.7mnoz of gold. Given the high grade of the resources and the open-pit nature of operations, we believe that the asset looks attractive from the TCC perspective. Moreover, based on the average EV/resources multiple of previous deals with gold deposits in Russia, we estimate that this project could add some 1% to Polymetal’s market capitalisation. Therefore, we treat the news as slightly positive.
126 RUSSIA Country Report February 2022 www.intellinews.com