The gold concentrate, from which China can refine 2.75 tons of gold, will be delivered from Polymetal's Mayskoye gold mine in Russia's easternmost Chukotka region.
MOSCOW(BullionStreet): Continuing its gold purchase from abroad, China will buy around 50,000 tons of gold concentrate from Russia's Polymetal.
Polymetal International in a statement said it had signed two export contracts to supply up to 50,000 tons of refractory gold concentrate to China in 2013.
The gold concentrate, from which China can refine 2.75 tons of gold, will be delivered from Polymetal’s Mayskoye gold mine in Russia’s easternmost Chukotka region.
The average gold content in the concentrate is expected to be around 55 grams per ton.
“The company estimates that the extra cost of selling the Mayskoye concentrate to off-takers, versus processing it at the Amursk pressure oxidation facility, is approximately $250 per ounce of gold,” said the statement.
Under the first contract, Polymetal will sell 15,000 tons of concentrate, with an option to increase the volume to 35,000 tons.
The first shipment under the contract is expected in late July – early August 2013, immediately after the start of navigation at the port of Pevek.
Under the second contract, Polymetal will sell 5,000 tons of concentrate with the option of selling an additional 10,000 tons of concentrate. The company expects the first shipment under the contract in late August and early September.
“Entering into multiple off-take contracts for Mayskoye is an important achievement for Polymetal. It will allow us to start generating free cash flows at our newest mine in Q3,” Polymetal CEO Vitaly Nesis said.