Russian gold mining industry ahead of a large consolidation - A.Nesis.

21 Oct 2016

The current value of gold does not encourage companies to implement new projects, players hide the inability to grow by mergers and acquisitions, and if the price of the precious metal will continue to move down, then the industry will intensify the consolidation process, said Vitaly Nesis, Polymetal’s CEO. According to him, Polymetal is willing to pay a large amount for new assets, but only if the field is good, Nesis said in an interview with the newspaper Izvestia. “We paid 620 million dollars for Kyzyl in Kazakhstan, a lot of money compared to the size of our company. But should we found the asset of such level and quality once again, we would not hesitate to pay the money once more. However, such a quality fields are unique, and it is more realistic to expect a much smaller deals with more modest sites. However, we clearly continue to search for new projects,” said Nesis. Perhaps this will be the field at an earlier stage of development, not yet ready for construction, requiring investment in additional exploration. Thus, Russia and especially Far East are very underexplored, so the potential for the discovery of new world-class deposits of quality are significant, the director said. According to Nesis, all exploration projects of the company, with rare exceptions,  are focused on the replenishment of the mineral resource base of existing enterprises, and the main task is to ensure the continuation of their work in 5-10 years. However, new assets are considered in terms of the growth of the company. In addition, the company's focus remains on Russia, Kazakhstan and Armenia - countries where it is already present. Polymetal makes emphasis on mineral content of the ore, which is highly dependent on the region and its infrastructure. “Definitely, we are interested in gold and silver, although we are not against the non-ferrous metals. Of course, I always have high hopes for exploration. Hopefully, at the end of this year, there will be at least a pair of brilliant results in the Far East,” said Nesis.

Source: Economical Information Agency «PRIME»