UPDATE2: Russia issues license for largest gold field Sukhoi Log

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MOSCOW, Feb 17 (PRIME) -- Prime Minister Dmitry Medvedev has signed a decree confirming the victory of a joint venture between miner Polyus and state conglomerate Rostec in an auction for Russia’s biggest gold deposit Sukhoi Log with a 9.4 million ruble bid, according to a document released on the government Web site on Friday.

Natural Resources and Environment Minister Sergei Donskoi said the license will be issued within a week.

“I have authorized my colleagues to issue the license as soon as possible, within a week. We have kept the project in store for too long, now is the time to get the ball rolling. We will grant the rights for development within a week, and the company will complete the remaining payment within a month,” Donskoi wrote on his Facebook page.

The deposit located in the Irkutsk Region accounts for 28% of all Russia’s gold resources. It has 1,656 tonnes of inferred gold resources under a B+C1+C2 category, 1,533 tonnes of silver and 522 tonnes of off-balance gold reserves. The Natural Resources and Environment Ministry said the deposit requires 90-100 billion rubles of capital investments to produce 80-90 tonnes of gold and 20-25 tonnes of silver per year.

The joint venture is called SL Zoloto, and has a 51-49% shareholding between Polyus and Rostec. In January, Polyus said it plans to acquire an additional 23.9% stake in SL Zoloto from Rostec for around U.S. $141 million, after the license has been obtained.

“At the first stage of the project until 2020, SL Zoloto will have to finish research and development operations… and invest at least 0.5 billion rubles,” Donskoi said.

“A technical study must be finished by 2020. The project will provide investment in the local transportation infrastructure, including an airport and a railway. It adds another 20 billion rubles of investment in the region.”

(57.1507 rubles – U.S. $1)

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