Russian mining company Polymetal has approved $ 447m investment to go ahead with the development of the Veduga gold project.

Located in a prolific Northern Yenisey gold belt in the Krasnoyarsk Region, the top gold producing region of Russia, Veduga is a high-grade refractory gold deposit that was discovered in 1977.

It contains four licence plots with the total area of 18km2.

Polymetal group CEO Vitaly Nesis said: “The large high-grade reserve base, robust economics, and clear execution path to significant cash flows underpinned the Board’s decision to approve Veduga.

“The management is currently planning a full consolidation of the asset in H1 2022.”

As of 1 February 2021, the updated ore reserve estimate for the deposit comprised of 31.9Mt of ore with an average gold grade of 3.9 g/t containing 4.0Moz of gold.

The Veduga mine plan assumes 10 years of conventional open-pit mining until 2031 and 12 years of underground mining using a skip shaft for hauling from 2030 to 2041.

With construction planned to begin in the third quarter of 2022, the project is expected to see first production in the second quarter of 2025.

Using conventional drill and blast, load and haul mining methods, the deposit will be mined through five open pits over 10 years starting from 2022.

The total capital expenditure of the project also includes a post-launch skip shaft and underground infrastructure construction of $77m in 2027-2029.

Currently, Polymetal currently owns 59.4% stake in the Veduga gold project. It also holds an option to increase its stake to 100%.

The company plans to fully consolidate the asset, after obtaining the final statutory clearance which is expected in the second quarter of 2022.

In April last year, VTB Bank (VTB), one of the Russia’s largest banks, announced an investment of $71m to acquire a 40.6% stake in Veduga.

Veduga, which currently employs over 300 workers, is expected to create 627 new jobs in mining and metal processing by 2027.