Polymetal International said that its board has approved the POX-2 project that will lead to construction of a new pressure oxidization facility in Amursk in Khabarovsk Krai, Russia with an investment of $431m.
The POX-2 project, which is now set to break ground, is being taken up to boost the value of the company’s refractory reserve base, which is made up of nearly 55% of total ore reserves.
The facility, which is targeted to be commissioned and brought into production in Q3 2023, will be used for processing of concentrates from the company’s mines at Kyzyl, Nezhda, Mayskoye, and Voro.
The POX-2 project has been designed to have a throughput capacity of 250-300 Ktpa of concentrate, which will be based on the levels of sulphur content. Its maximum sulfide sulfur processing capacity will be 48 Ktpa.
The approval of the pressure oxidization facility comes on the basis of a recently concluded feasibility study (FS). The facility will be built adjacent to the existing POX facility of Polymetal and will use some of its external infrastructure like gas main, access road and water main.
Polymetal expects the POX-2 facility to create major economic benefits as it will enable in-house processing of all refractory concentrates instead of selling them to third-party off-takers.
The precious metals mining group said that the project will yield an incremental production of around 30-35 Koz of gold a year from the same amount of feedstock and on average, will reduce TCC by $100-150/oz per ounce for 500 Koz of annual gold production.
POX-2 project will help with security of downstream processing for Polymetal amid stringent environmental regulations in China, which is presently the most important market for refractory gold concentrates.
The pressure oxidization facility will also enable the company to create capacity for treatment of third-party refractory concentrates, a market which it says has considerably grown in Russia and across the world in recent years.
Polymetal Group CEO Vitaly Nesis said: “POX-2 leverages our core technical capabilities and creates substantial value. It also fully de-risks our business model by eliminating dependence on concentrate off-take markets.
“Emerging trends in the global gold mining industry make POX-2 a crucial element of the Company’s long-term strategy”.
Polymetal has selected Canada-based Hatch for the basic engineering, detailed engineering, POX procurement support and the supply of customized equipment for high-pressure and acidic processing areas of the project.
On the other hand, Polymetal Engineering has been selected for other processing areas, general site layout, and infrastructure.