Atomredmetzoloto (ARMZ) plans to start gold production in the Elkon uranium ore district of Yakutia, said Vyacheslav Galaktionov, general director of AO Elkonsky GMK, part of the holding (project operator). According to him, together with the State Corporation, the preparation of the infrastructure is being considered at the moment, Elkonsky GMK plans to become a resident of the TOR Yuzhnaya Yakutia (the resident status allows receiving tax benefits). “There are funds for the development of our plans,” said top manager, without specifying details. Elkonsky GMK was created in 2007 for the development of the Northern and Southern parts of the Elkon uranium ore district, the reserves of which amount 357 thousand tons of uranium (about 6% of the world reserves). However, in 2011, Rosatom scrapped to project ‘due to lack of sufficient investment’, this sleep mode should last until December 2017, as indicated in the information of ARMZ. The total amount of investments in the project was not disclosed, but ARMZ said earlier that Elkon “becomes an interesting project” at a price of $80 per pound of uranium oxide concentrate (about $208 per 1 kg). Yesterday, Mr. Galaktionov said that “now is not very good environment for the sale of uranium” because “a year or two ago” there was a price of $170-180 per 1 kg in the markets, and “now the spot price is $62.” According to UxC, spot price as of 10 October was $22.75 per pound. The gold reserves of the Southern site (C2 category) are 150 tons (5.3 million ounces), with average grade of 0.76 g/t. ARMZ said to Kommersant that mineral processing plant is expected with a processing capacity at the first phase of 1.5 million tons of ore per year, with enrichment method of heap leaching. Budget and timing will be clarified “after the completion of all project approvals”. RMZ already owns 50.1% of ZAO Lunnoye (another 49% are owned by Zoloto Seligdara), developing the field in Yakutia with the production of 0.5 tons per year. ARMZ also considers gold projects in the Zabaykalsky Krai (details not disclosed). Although gold reserves in South Elkon area are large the metal content is quite low, especially in comparison with the projects of the largest players in the Russian Federation, indicated Oleg Petropavlovsky at BKS. A similar low content in the Yakut field Gross of Nordgold (0.67-0.73 g/t), but there a plant is supposed to process 10 million tons of ore per year, which gives “a very different economy”, he said. According to the analyst, ARMZ plant can produce about 40 thousand ounces of gold per year with the cost of, “at best”, $750 per ounce. Mr. Petropavlovsky hesitates to evaluate the total investment, but he points out: exploration, feasibility studies and construction will take two to three years, “and what will happen to gold prices is difficult to say, we have a long-term price of $1.1 thousand per ounce” (currently $1.26 thousand). “Gold mining is another project of survival against the background of decline of consumption, prices and overcapacity in the uranium market”, believes the analyst. ARMZ is actively diversifying: the holding intends to build a mine for lead and zinc ores on the Novaya Zemlya and to engage with scandium (negotiations were held with Intermiks Met and Kazatomprom, but the parties have not agreed, the project is developed at the moment by Dalur, a part of ARMZ).