Polyus Gold Commercial Development of the Natalka Lode Gold Deposit

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Researched by Industrial Info Resources (Sugar Land, Texas)--Polyus Gold Mining Company (PINKSHEETS:OPYGY) (Moscow, Russia), along with a consortium formed by Knight Piésold and Company (Denver, Colorado) and Micon International Limited (Norwich, England), began commercial development of the Natalka lode gold deposit, also known as the Matrosov mine, last summer after years of extensive site studies. The deposit is in northeastern Russia in the Omchak River Basin, in the Magadan region, 450 kilometers from Magadan, the capital of the region. Polyus established its Magadan business unit in 2004 after acquiring 38% of Mastrosov Mine, which held licenses for exploration and production; however, the mine was shut down in the same year due to economic reasons.

The 15-kilometer Natalka lode gold deposit was discovered in 1943 and has since produced 75 metric tons of gold, making it Russia's largest gold deposit and the world's third-largest. After the mine ceased operations, Polyus began a massive exploration effort between 2004 and 2006. Efforts included diamond drilling, tunneling, trench excavation, and geological sampling. The State Reserves Committee of the Ministry of Natural Resources of the Russian Federation worked with Polyus and concluded that the deposit within the proposed open-pit boundaries contained 1,500.8 metric tons of gold and 335.3 metric tons along the pit outline.

Last year, Polyus, along with the consortium, began development of the open-pit mine and began construction of an underground mine and processing facility. Together, they are expected to produce 30 million metric tons per year of ore. Mined ore will be transported to the planned on-site facility, which is capable of processing 130,000 tons per year to produce 1.9 million metric ounces of gold. The entire project is scheduled for completion during the fourth quarter of 2013, and is estimated to cost US$2.5 billion.

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