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. Last Updated: 07/27/2016

Polymetal to Revive Old Mine

Polymetal said Monday that it planned by 2011 to revive the Kubaka gold mine acquired from Kinross Gold, with the aim of producing 150,000 to 250,000 ounces per year.

Polymetal, the country's third-largest gold miner, plans by 2010 to prepare a feasibility study for Kubaka with a reserve calculation to Joint Ore Reserves Committee standards, the company said in a statement.

"We expect the revival of Kubaka will be able to generate additional gold production for Polymetal faster than and at a fraction of the capital cost that can be expected at a greenfield operation," Polymetal CEO Vitaly Nesis said.

Kubaka, in the Magadan region, produced 90.8 tons of gold from 1997 to 2005. The mine was then put on care and maintenance.

Polymetal has agreed to pay $15 million plus a variable royalty on future production to buy all of the shares in Omolon Gold Mining from Kinross subsidiary, Kinam Magadan Gold.

Omolon holds a 98.1 percent interest in the Kubaka project. Its assets include the mining infrastructure, an ore-processing plant and four mining licenses in the surrounding area.

Polymetal said the 850,000-ton-per-year processing plant could be brought on stream very quickly and that Kubaka allowed the company to pool logistics and personnel in Magadan, home of its major Dukat and Lunnoye silver and gold mining projects.