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World’s largest gold deposit discovered in Siberia

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By Imelda Cotton - 
World’s largest gold deposit discovered Siberia PJSC Polyus Sukhoi Log

Polyus has revealed a 40 million-ounce maiden ore reserve for the Siberian project.


Three years after buying the Sukhoi Log gold deposit in Siberia via auction from the Russian government, mining giant PJSC Polyus this week claimed it is sitting on the world’s largest stockpile of the precious metal.

An October audit by the gold producer has estimated a maiden ore reserve at the flagship greenfields project – located in Siberia’s isolated Irkutsk region – to total approximately 540 tonnes of ore for 40 million ounces of gold grading at an average 2.3 grams per tonne.

In addition to these economically-mineable reserves, the audit showed the sediment-hosted deposit to contain 67Moz in measured, indicated and inferred resources, which is open to increase after further drilling and studies.

The findings have confirmed Sukhoi Log as the largest deposit of its kind in the world, accounting for around one quarter of Russia’s entire stores of unmined gold.

Soviet discovery

Sukhoi Log was first discovered in 1961 by the Bodaybo expedition and extensively explored by Soviet geologists through to the 1990s.

More than 320,000m of drilling has been carried out since discovery, with a 2008 scoping study estimating ore reserves of 930.3Mt grading 2.1g/t for 62.8Moz of contained gold.

Sukhoi Log gold deposit Siberia PJSC Polyus

Drill cores from the Sukhoi Log gold deposit.

Polyus chief executive officer Pavel Grachev said this week’s exploration success reaffirms the deposit’s status on the global stage.

“The publication of this maiden ore reserve estimate represents a significant milestone for [our] long-term development strategy and confirms Sukhoi Log’s position as one of the world’s highest calibre gold deposits,” he said.

“We have achieved a solid conversion ratio from resources to reserves at a grade of 2.3 grams per tonne, while continuing to build up [the project’s] mineral resource base… [and now] we will continue to focus on the next stages of the project’s development.”

Mr Grachev said the company will conduct in-fill drilling campaigns to improve the confidence of inferred mineral resources and “better define gold mineralisation within the future pit area”, where it expects to carry out mining activities during the first years of Sukhoi Log’s operations.

Fourth-largest company

Polyus is the world’s fourth-largest gold mining company by production volumes, with the third largest attributable gold reserves and the lowest production costs among major global producers.

In 2017, the company entered into an option agreement with RT-Business Development (a subsidiary of state-owned Russian conglomerate Rostec) to acquire a 78% stake in SL Gold Limited, which owned the Sukhoi Log licence.

Last month, Polyus announced plans to accelerate its option to buy-out the remaining 22% stake in SL Gold for approximately US$128.2 million (A$180 million) to assume 100% ownership of the deposit.

The buy-out will take the total amount paid for the asset by Polyus to about US$438 million (A$600 million).

Development cost

Polyus has committed to the delivery of a feasibility study and final investment decision for the Sukhoi Log project during 2021, giving an indicative development cost of US$2.5 billion (A$3.5 billion).

Earlier this month, US investment bank JP Morgan estimated a net present value for the project of US$13 billion (A$18 billion) based on a base case gold price, with spot prices boosting the total by a further US$4 billion (A$5.6 billion).

“Even assuming a conservative US$1,200 (A$1,680) per ounce gold price in real terms, we calculate a robust net present value of about US$8 billion (A$11.2 billion) with an internal rate of return of more than 35%, backed by large-scale, high-grade operations and relatively low capex intensity,” the bank said.

Development of Sukhoi Log has been planned as an open pit operation utilising conventional bulk open pit methods.

The process plant is expected to be comprised of gravity concentration and flotation, followed by a carbon-in-leach circuit to recover the gold.

The 2008 scoping study estimated that throughput capacity would sit around 30Mt per year.

While developing giant deposits is typically a lengthy and costly process, Mr Grachev said the field may allow the already cashed-up Polyus to boost its annual output by at least 70%.