Polymetal increases stake in Tarutinskoye to 100pc

The FTSE 250 company said it achieved this through the purchase of an additional 25% from Gerosena Trading, the owner of the remaining stake in Vostochny Basis.

It said the consideration comprised $10m, payable by 893,575 newly issued company shares, with that quantum calculated by dividing the consideration by Polymetal's closing share price on the day prior to completion.

Tarutin is a conventional copper-gold skarn deposit, Polymetal’s board said, that is an “excellent fit” with the company's processing hub strategy.

It is expected to provide an open-pittable and easily accessible ore feed for the Varvara flotation plant located in Kazakhstan, 150 km by road from the mine site.

A reserve estimate for the deposit is expected in the third quarter, Polymetal said, with mining planned to commence in 2018 with the goal to deliver and process up to 300Kt of ore at Varvara in order to produce 4-5 Kt of copper per annum in FY2018-2020.

The initial investment was expected to be less than $5m, as the mine fleet will be transferred from Polymetal's existing operations.

Polymetal said the Tarutin licence plot covers an area of 1.8 square kilometres in the Chelyabinsk region, 28 km from the town of Chesma, which has a population of around 7,000.

The infrastructure in the region where the licence area is located is already well developed, the board added, with a railway station located 20 km from the deposit.

“We have decided to consolidate 100% ownership over Tarutin as it is a natural close fit for our Varvara hub and enhances its copper reserve base,” said group CEO Vitaly Nesis.

“Tarutin is expected to start providing cash flows in the near term.”