Download 2004 Annual Report - Polymetal

Vorontsovskoye(Northern Urals Gold, Sverd−lovsk Region)In 2004, Polymetal continuedexploring resources at the Vo−rontsovskoye deposit in the con−tours of the operating pit. Overthe course of the year, by increas−ing the density of the explorationgrid, approximately 192,000 oz.of gold was transferred from theC2 category to the industrial C1category. Results from detaileddrilling support earlier estimatesof the amount of ore and qualita−tive characteristics of the goldmineralization in the C2 categoryblocks.In 2004, drilling exploration in thenear and far flanks [folds] of the de−posit of ore leads was completed[,]and the resources were enteredinto the P1 category. Accordingto preliminary data, balance re−servesresources are estimatedat 1,200–1,300 thousand tonsof ore (approximately [around]208,975 oz. of gold). Most of theseresources (85%) are oxidized ore.Processing of this ore will be usedto replenish ore for future heapleaching. Significant resourcesof low−grade ore (approximately1.9 million tons) with an averagegold head grade of 0.8 g/ton werefound in the southern flanks of thedeposit. The feasibility of process−ing these resources using heapleaching will be determined after afeasibility study and governmentalinspection, which are scheduledfor the end of 2005.Khakanjinskoye(Okhotsk Mining and GeologicalCompany, KhabarovskTerritory)At the same time that Polymetalengaged in open−pit mining op−erations at the Khakanjinskoyedeposit, the company began drill−ing work aimed at estimating thedeposit’s deeper levels to pre−pare reserves for Stage II of un−derground mining at the deposit.Exploration drilling revealed twonew ore leads in the contoursof which single highly productivemine intersections of up to 10−12 m with an average gold headgrade of up to 40 g/ton. Polymetalestimates that through contourdrilling C2 category reserves willincrease by 317,000 tons of ore,129,147 oz. of gold (with an aver−age head grade of 12.7 g/ton) and4,848,220 oz. of silver (with an av−erage head grade of 475 g/ton).Next year, the company intends tocontinue estimating deeper levelsat the Khakanjinskoye deposit andits far and near flanks [folds]. Weestimate that these operationswill yield approximately 321,500oz. of gold resources.Lunnoye and Arylakh(Silver Territory, MagadanRegion)In 2004, Polymetal explored theoperating pit at the Lunnoye de−posit and conducted additionalsurveys of resources in ore zoneIX (under the pit) to prepare themfor future mining. The explorationallowed for mining ore of planedquality for a one year period. Ad−ditional surveys of deeper levelsby drilling angled mines allowed673,000 tons of ore, 56,809 oz.of gold and 7,812,450 oz. of silverto be transferred to the C1 cate−gory of resources. Detailed explo−ration of C2 category blocks led tothe discovery of ore columns withhigher quality mineral resources.These ore columns will becomethe primary areas for future un−derground mining operations.Dukat(Magadan Silver, MagadanRegion)In 2004, geological surveys at theDukat silver deposit were in theorganizational stage. Limited drill−ing targeted local exploration foropen−pit and underground mining.Geological survey and exploration31