Alrosa to Spend $274M to Develop New Gold Deposit

Alrosa has purchased the Degdekan gold mine in Russia from Polyus, noting it fit in with the rest of the business and would improve the company’s financial stability. 

Alrosa’s Almazy Anabara division, which produces approximately 3.9 million carats of diamonds a year, or 11% of the company’s total annual output, made an initial payment of RUB 24 billion ($274.2 million) to Russian gold miner Polyus to develop the deposit, Alrosa said Monday. The two parties did not disclose the total value of the deal. Both are currently subject to Western sanctions. 

“Alrosa has accumulated extensive experience in the field of associated gold mining, which we will use and develop,” said Alrosa CEO Pavel Marinychev. “The development of the gold ore deposit will provide an additional synergistic effect for Alrosa’s business and will contribute to increasing its financial stability in the long term.” 

The miner said development on the deposit would begin once the feasibility study was complete, with initial operations starting in 2028. Once it reaches full capacity, in 2030, it will produce about 3.3 tonnes of gold per year, Alrosa forecast. The mine is expected to continue output until 2046. Alrosa will build a quarry, a gold extraction plant, a tailings storage facility and related infrastructure for the deposit. Total reserves are currently estimated at 100 tonnes. 

Image: A gold nugget. (Shutterstock)