Download 2004 Annual Report - Polymetal

Victor R. Wulfert,Managing DirectorVictor M. Ivanov,Chief GeologistGennady V. Kachaev,Head of the Plantto ensure stability, a set of pumpswas reconstructed. Utilizing newreagents at the flotation facilitydecreased the total cost of re−agents and increased the recov−ery rate. The company estimatesthat the recovery rate will contin−ue to increase, as we implementnew technological innovations,such as[.] intercycle sand flotationand gravitational impregnation atthe plant.In 2005, open−pit mining inpits[quarries] #1 and #4 and un−derground mining at the 980 m,930 m and 860 m floors will takeplace. During the following years,we plan to complete the construc−tion and launch of the new 930 mfloor level. We will also continueto reconstruct the Tsentralnayaadit, adit #10, and the 860 m floor.In addition, open−pit mining will be−gin at the Eeeastern zone of thedeposit in pit [quarry] #4.In 2005, the company will designand implement measures aimedat increasing production capac−ity to 850,000 tpa of ore in theshort−term and to 950,000 tpaof ore in the longer−term. We alsoplan to thoroughly modernize theunderground mining facilities andthe plant, using state−of−the−arttechnology.In 2005, the company plans tobegin a project to construct asecond parallel ore grinding facil−ity. One step in this process is toacquire an additional wet grindingmill, which will increase output andstabilize operations at the plant.To expand the company’s mineralreserve base, Polymetal will en−gage in active geological survey−ing of nearby ore manifestationsand small deposits. In addition, thecompany is planning to acquireseveral mining facilities in the vicin−ity of Dukat. We are also consider−ing the possibility of constructingStage II of the plant for process−ing ore from satellite deposits andsorted spoil piles of lean ore left bythe state enterprise “Dukat GOK”(the company formerly operatingat the Dukat deposit).Indicator Unit 2004 2003 2004/2003Total rock mined m 3 1 486 686 871 573 70,6%including stripping m 3 1 080 387 642 054 68,3%Ore minedm 3 321 506 229 519 40,1%th. Tons 839 543 603 367 39,1%Au ave. head grade g/ton 1,4 1,5 (9,0%)Ag ave. head grade g/ton 601,6 738,9 (18,6%)including open−pit operationsm 3 173 554 145 372 19,4%th. Tons 447 834 379 197 18,1%Au ave. head grade g/ton 1,34 1,1 19,9%Ag ave. head grade g/ton 490,7 483,3 1,5%including underground miningm 3 147 952 84 147 75,8%th. Tons 391 709 224 170 74,7%Au ave. head grade g/ton 1,4 2,2 (35,1%)Ag ave. head grade g/ton 728,5 1 171,2 (37,8%)Ore processed th. Tons 762 798 548 385 39,1%Au ave. head grade g/ton 1,5 1,6 (10,6%)Ag ave. head grade g/ton 608,0 782,7 (22,3%)Au recovery rate % 68% 70% (2,8%)Ag recovery rate % 73% 69% 5,8%Au produced th. oz. 24,3 22,2 9,6%Ag produced th. oz. 12 076 8 646 39,7%Au sales th. oz. 22,1 20,2 8,9%Ag sales th. oz. 12 864 6 593 95,1%Total cash costs * $US/oz. Ag 1,68 2,55 34,1%Note:* Precious metals production at the Dukat and Lunnoye deposits is a single technological process. The above figuresare calculated for both deposits together. Silver is a co−product at the deposit. [This was into account during] Ccal−culations were based on Gold Institute StandardsDukat deposit23