Polymetal International plc concluded legally binding agreement with Dundee Precious Metals Inc. about purchasing CSC "Dundee Precious Metals Kapan" (DPMK), with license for golden ore deposit Kapan in ArmenianRepublic, as company informed.
According to standard NI 43-101 as on December 31, 2014, measured and indicated resources are estimated in 15.9 million tons of ore, consisting about 1.4 million ounces of gold, 24 million ounces of silver, 80 thousand tons of copper and 270 thousand tons of zinc (2.6 million of gold equivalent ounce with average content 5.1 g/t).
Productive assets include fully mechanized underground mine with capacity about 400 thousand tons annually, traditional flotation concentration plant with capacity about 750 thousand tons annually and infrastructure facilities. The enterprise is producing golden-copper-silver and zinc concentrates for export. Former owner has invested more than $75 million into development of the deposit for the previous five years.
410 and 411 thousand tons of ore were mined and enriched in Kapan place respectively in 2015. Sales amounted 21 thousand ounces of gold, 1 thousand tons of copper, 5 thousand tons of zinc and 0.4 million ounces of silver for the same year. Net earning of the company for this period amounted $35 million, EBITDA - $5 million, and а cash coasts after deduction of by-products- $709 per gold of ounce sold.
Total remuneration amount for purchase of DPMK shares, paid at the time of an order closure, will estimate $25 million, adjusted to the total working capital. Remuneration includes $10 million in cash assets and issuance of new shares of "Polymetal" for $15 million. Besides, Dundee will get 2% royalty from the net income (NSR) from future production on Kapan deposit, which will not exceed $25 million. After order closure, expected in the second quarter of 2016, "Polymetal" is going to announce their long-term and short-term plans concerning the deposit.