According to Mining News Pro - Veduga, which is located in the Krasnoyarsk region of Russia, was on Polymetal’s chopping block until it last year doubled reserves to 2.8-million ounces of gold at an average grade of 4.6 g/t.

One of Russia’s largest banks, VTB, will buy out minorities by investing $71-million for a 40.6% stake in Veduga. Polymetal has a 59.4% ownership and has been granted a call option to acquire VTB`s stake in the future.

"This deal hands Polymetal full operational control of the asset and unlocks further project development. The creative transaction structure allows us to benefit from the financial strength of VTB without straining our own balance sheet. Crucially, Polymetal now has a clear path to 100% ownership,” said CEO Vitaly Nesis.

In terms of the transaction announced on Friday, VTB will initially acquire a 25.7% stake in Amikan, the owner of Veduga, from the existing minority shareholders for a cash consideration of $36-million. The implied Amikan equity transaction value is $140-million.

VTB will invest a further $35-million in cash in exchange for newly issued Amikan share capital resulting in VTB holding a 40.6% stake in the asset. These cash-in proceeds will be used to fund the project`s ongoing exploration and development costs.

Veduga is a high-grade refractory gold deposit located in the prolific Northern Yenisey gold belt in the Krasnoyarsk region, the top gold producing region of Russia. The project comprises four licence plots with the total area of 18 km2. The property is accessible by an all-year road and has direct access to the federal power grid.

Currently, mining at Veduga focuses on high-grade openpit with ore processed at other Polymetal assets and concentrate subsequently treated at the Amursk POX.