Alrosa to Buy Far East Russia Gold Deposit from Polyus

SEATTLE (Scrap Monster): Leading Russian diamond producer Alrosa announced its decision to buy a huge gold deposit in Far East Russia from Polyus. The value of the deal was not disclosed.

The announcement states that Alrosa has plans to make investment of around $276 million towards development of the Degdekan deposit, in the Magadan region of Russia’s Far East. Polyus has been holding the license to develop the deposit since 2005.

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The move will help Alrosa make a deeper push into gold, which the company believes, would fit well with the rest of its business and deliver significant financial strength, without having to make notable changes in strategy. Upon full production, the gold deposit is expected to provide at least 10% boost to Alrosa’s EBITDA. Alrosa plans to develop the gold deposit until 2046.

The development of the gold deposit will provide additional synergistic effect for its business, noted Pavel Marinychev, CEO, Alrosa. The proximity of the deposit to transport and energy infrastructure makes it attractive, he added.

Meantime, Polyus observed that the sale of the Degdekan deposit will result in optimization of its exploration portfolio, ahead of the commencement of developmental activities at the vast Sukhoi Log gold deposit in Siberia.