JOHANNESBURG (miningweekly.com) – LSE-listed Polymetal has secured an offtake agreement with one of its established trading partners for 50% of the forecast high-carbon concentrate production from the Kyzyl project, in north-eastern Kazakhstan, with an option to increase this to 100% of its yearly concentrate output.
Polymetal plans to process low-carbon concentrate at the debottlenecked Amursk POX facility, in the far east of Russia, but said that it retained the flexibility to direct this material to the offtake.
CEO Vitaly Nesis said on Wednesday that the offtake agreement would ensure that Kyzyl would generate significant cash flows “almost immediately after the start of concentrate production”.
The company did not disclose the commercial terms of the offtake agreement, but said that it compared favourably with its original expectations, with the percentage of payable gold in concentrate in line with the project feasibility study, and a better treatment charge than in the recent contracts for its Mayskoye operation.
Polymetal will deliver the concentrate from Kyzyl to the seaport of Vladivostok, about 6 000 km away, from where the buyer will be shipping the concentrate for further processing in eastern China or elsewhere.