Polymetal makes payment for Primorskoye in shares

Polymetal International confirmed the payment of a deferred consideration for the acquisition of the Primorskoye property on Wednesday.

The FTSE 250 company said under the deal terms, the deferred consideration is based on the reserve estimate and paid in cash.

However, the parties had since agreed for the deferred consideration to be based on the mineral resource estimate and paid in company shares.

“Therefore, the deferred consideration is equal to $9.7m, which is $13,333 per tonne of contained silver equivalent in measured and indicated mineral resources, or $0.415 per silver equivalent ounce,” Polymetal’s board explained in a statement.

“The deferred consideration is payable by 815,348 newly issued company shares, representing 0.19% of Polymetal's total increased share capital.”

Polymetal said the mineral resource estimate was independently audited by CSA Global in accordance with the JORC Code as of 1 January 2017 and comprised 23.5 Moz of silver equivalent of indicated resources at an average silver equivalent grade of 1,563 g/t, and 0.7 Moz of silver equivalent of inferred resources at an average silver equivalent grade of 923 g/t.

Primorskoye is located in the Omsukchan district in the Magadan region, 215 km from Polymetal's Omsukchan concentrator and 15 km from the Sea of Okhotsk.

The licenced area is remote with limited access - four months of winter road from January to April, and four months of summer navigation from June to September.

Polymetal said it planned to continue exploration at the property with the goal to release a reserve estimate in Q3 2018.