Russia’s top gold producer Polyus (LSE: PLZL) says its giant Sukhoi Log gold deposit in Siberia is the world’s biggest by reserves, both among greenfield assets and operating mines.
The deposit holds 40 million oz. proven gold reserves as measured by international JORC standards, the company announced on Oct. 22. This means Sukhoi Log, which translates to “dry gully” in English, contains a fifth of Russia’s entire gold reserves.
It also makes Polyus the world’s second-largest bullion miner by proven reserves.
At 540 million tonnes of mineralized material with an average grade of 2.3 grams gold per tonne, the asset is slightly bigger than Seabridge Gold’s (TSX: SEA; NYSE: SEA) KSM project in Canada, which holds an estimated 38.8 million oz. gold, and the Donlin gold project in Alaska, which is owned equally by subsidiaries of NovaGold Resources (TSX: NG; NYSE-AM: NG) and Barrick Gold (TSX: ABX; NYSE: GOLD) with reserves estimated at 33.8 million oz. gold.
“We are pleased with the results,” Pavel Grachev, the company’s chief executive, said in a statement on Oct. 22. “The publication of the maiden ore reserve estimate represents a significant milestone for Polyus’ long-term development strategy, and confirms Sukhoi Log’s position as one of the world’s highest-calibre gold deposits.”
Polyus and its partner bought the rights to develop Sukhoi Log from the Russian state in 2017.
The gold producer will soon be the sole owner of the massive deposit. It agreed in September to pay US$128.2 million to speed up the acquisition of its partner, Russian state defence group Rostec. The deal will give Polyus the 22% stake in the deposit that it does not already own.
The company also announced that its total gold output in the third quarter climbed 2% year-on-year to 771,000 ounces. Estimated gold sales also rose by 36% to US$1.44 billion.
Production and development plans for Sukhoi Log, which lies almost 6,000 km from Moscow in the far east of Siberia, have yet to be announced.
Polyus, which is already building a local airport to serve the remote site, has previously pegged development costs at about US$2.5 billion.
A prefeasibility study is expected to be published by the end of the year.