Top Russian gold miner PJSC Polyus (LSE,MCX:PLZL) announced on Tuesday that it’s kicking off a 180,000 metre drilling campaign at its Sukhoi Log deposit, one of the world’s largest undeveloped gold deposits.
The program at Sukhoi Log located in the Irkutsk region of Eastern Siberia is run by Polyus Subsidiary SL Gold and scheduled to last two years. Polyus is spending $20-25 million per year on a feasibility study over the next three to four years.
In a statement Polyus said AMC Consultants, based on historical drilling results, generated a 3D resource block model for the deposit early in 2017 which estimated Sukhoi Log’s total inferred resources at 58 million ounces, grading 2.0 g/t.
Polyus said this block model provided the basis for the design of the JORC-compliant program which includes 50,000 metres of verification drilling and 130,000 metres of in-fill, geotechnical, geometallurgical and hydrogeological drilling.
The verification drilling is scheduled for completion in July 2018 to provide an updated ore reserve and mineral resource estimate. Polyus said the primary aim will be to reconfirm the results of historical drilling data and to verify the geological interpretation of the deposit.
The drilling campaign has started at three drill rigs at the site, located 6km from Polyus’ producing Verninskoye mine, and in February 2018 three additional rigs will come into operation to increase the drilling fleet to six drill rigs for the duration of the drilling works.
Sukhoi Log (which translates to “dry gully” in English) was discovered in 1961 and extensively explored by Soviet geologists since the 70s. In total over 320,000m of drilling have been carried out, including by a team from Canada’s Placer Dome (now Barrick) in the late 1990s. Sukhoi Log is a well-known entity with nine engineering studies completed to date.
Polyus won a government-backed auction to develop the legendary Sukhoi Log deposit in February this year. According to Polyus’s London share offer prospectus Sukhoi Log would cost between $2 – $2.5 billion to construct and could produce roughly 1.6–1.7m ounces per year.
That would place Sukhoi Log near Muruntau in Uzbekistan, long the world’s most productive gold mine. Sukhoi Log would catapult Polyus into the top three of global producers and within shouting distance of the number one spot.