The largest Russian gold mining company PJSC Polyus reported that its unused Sukhoi Log deposit in Siberia has the world’s largest gold reserves, writes the Bloomberg agency.
According to Director General Pavel Grachev, according to the audit, proven reserves of Sukhoi Log are 40 million ounces according to international standards JORC, with an average gold grade of 2.3 grams per tonne. This means that the deposit, which accounts for over a quarter of Russian gold reserves, is larger than the KSM Seabridge Gold Inc. project in Canada and Donlin Gold in Alaska (USA).
The Sukhoi Log deposit is located in the Irkutsk region and was discovered by Soviet geologists in 1961. Its research was conducted in the 70s of the twentieth century, but given the difficult terrain, development has not yet begun.
In 2017, the Russian government sold the deposit at an auction to PJSC Polyus. In early 2020, the company announced that it would focus on small projects and reduce its debt obligations in the coming years before it started developing Sukhoi Log.
According to preliminary calculations of the company, the cost of development of the Sukhoi Log deposit may reach $2.5 billion, and the annual production volume will amount to 1.6 million ounces. By the end of 2020, the company promises to announce the details concerning investments into the Sukhoi Log when the feasibility study will be ready.
The development of giant deposits is a long and expensive process. “Sukhoi Log can allow PJSC Polyus to increase its annual gold production by 70%. Since the company acquired the deposit, the price of gold has increased by 60%. The sharp rise in gold prices occurred during the COVID-19 pandemic when investors tried to save their savings during the beginning of the economic crisis.
Grachev assured that the company is implementing the project despite the fact that the place is difficult to access. Besides, the audit showed that along with economically justified reserves, the deposit has 67 million ounces of total resources. This is 4 million ounces more than the previous estimate and this figure may grow after additional drilling and exploration. PJSC Polyus has already started to invest in the infrastructure necessary for the project implementation.