Russia’s Nordgold launches construction at low-cost Gross mine

MOSCOW, Jun 6 (PRIME) -- Gold mining company Nordgold, controlled by Russian businessman Alexei Mordashov, has launched construction of a production facility at its low-cost mine Gross in the republic of Yakutia, the company said in a statement Monday.

“The Gross project is the result of a green field development initiative at Nordgold and successful exploration program which identified a world-class reserve hosting 4.4 million ounces of ore reserves and 8.5 million ounces of mineral resources as at December 31, 2015. According to a feasibility study, Gross is expected to mine approximately 12 million tonnes of ore and to produce approximately 230,000 ounces of gold per year, at full production, for 17 years,” the company said.

The company plans to invest about U.S. $125 million in the facility’s construction in 2016, while total investments are estimated at $250 million. Nordgold expects to produce the field’s first gold in January–March 2018.

“The feasibility study indicated the project’s IRR (internal rate of return) of almost 40% at a gold price of $1,250 per ounce and approximately 25% at a gold price of $1,100 per ounce,” the company said.

“The two-year pilot operation, during which ore from the Gross mine was processed at the adjacent Neryungri mine, delivered recoveries at above 80% with low production costs (all-in sustaining costs of $641 per ounce), giving us confidence in the future successful performance of the Gross mine,” Norgdold said.

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