First production at Polymetal's Nezdha expected in Q4 2021

Construction on the project, which has mineral resources including ore reserves of 12.4m ounces of gold equivalent, is due to start in the first quarter of next year with first production expected in the fourth quarter of 2021.

The estimate of proved and probable ore reserves increased by 2.4 Moz of GE and now contains 38 million tonnes at an average grade of 3.6g/t GE for 4.4 Moz of GE contained.

Polymetal said the feasibility study envisioned 25 years of production from 2021. The life of mine plan includes 19 years of conventional open-pit mining from 2019 to 2037 and 17 years of production from underground ore from 2029.

"Nezhda is a long-life, high-grade asset with robust economics", said chief executive officer Vitaly Nesis. "The project is capital light and will rely heavily on our successful experience at Kyzyl. Nezhda will contribute to dividends per share already in 2022."

RBC Capital Markets said that given management's strong execution on the Kyzyl mine build, it sees lower development risk at Nezhda.

"Similar to the group's Kyzyl mine in Kazakhstan, Nezhda is a refractory ore body and will produce similar concentrate products. Given the success we witnessed there on our site visit and that the build team is already sharing lessons learned with the Nezhda construction team we see development risk as significantly lower this time around," it said.

"With the Kapan mine sale recently announced we also see Nezhda as adding another strong asset to the portfolio, potentially allowing for further refinements and asset sales from the group in time, improving business quality further."

At 0900 GMT, the shares were up 0.5% to 715.80p.