Polymetal increases stake in Nezhda venture; agrees buyout option

Polymetal International said it had agreed to buy an additional 7% in the joint venture Nezhdaninskoye gold deposit for $8m from its partner Ivan Kulakov along with an option to buy out the remaining 75.3%.

Under the deal, Polymetal's stake in Nezhda will increase to 24.7%. A call option to buy out the rest of the venture carries a $12m cash premium payable upfront and a total price of between $105m-$180m made up of cash and shares.

Polymetal said a resource estimate came in at 71m tonnes of mineralized material containing 11m oz of gold equivalent (GE) at an average grade of 4.8 g/t.

"Exploration at Nezhda confirmed a very large high-grade property with substantial open-pit potential. The asset fits perfectly with Polymetal's core competencies in refractory ore processing and remote asset development" said Polymetal chief executive Vitaly Nesis.

"We are very pleased that the new terms of the agreement on Nezhda give us significant decision-making flexibility and offer Polymetal a clear path to consolidating full ownership in this highly prospective asset."