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JSC “Polymetal” announces that it has signed a letter of intent with FESCO Transportation Group specifying commercial terms of future Mayskoye concentrate transportation from the port of Pevek to the railway station 12 kilometers from Amursk.
The LOI covers the period of five years (from 2012 to 2016 inclusive) and establishes the base tariff in the range of US$130-145 per ton of concentrate, depending on the ship load. The tariff includes sea freight, ice toll, railway freight and certain service charges. Polymetal and FESCO have agreed to adjust the tariff annually based on domestic inflation and dynamics of fuel prices and railway and ports tariffs. Taking into account costs of trucking concentrate from the mine to Pevek (180 kilometers) and from the railway head to the Amursk POX facility Polymetal estimates total concentrate transportation costs at below US$200 per ton. “LOI with FESCO, our stable and strong long-term partner, removes a significant uncertainty in Mayskoye project economics,” said Vitaly Nesis, CEO of Polymetal. “We are pleased that the unit transportation cost is expected to be materially below our original estimates.” The Company is planning to ship first concentrate from Mayskoye to Amursk in Q3 2012 and, starting from 2013, when both the mine and the flotation concentrator will be fully ramped up, to ship up to 100 Kt of concentrate per year. |
