Diamond producer Alrosa has expanded its mining portfolio by acquiring the Degdekanskoye ore field gold deposit in Russia from mining company Polyus.

The deal, completed by Alrosa’s subsidiary, JSC Almazy Anabara, involves a 100% stake purchase in Magadan Geological Exploration Enterprise (MGRP), which owns the gold deposit, from JSC Polyus Krasnoyarsk, a subsidiary of PJSC Polyus.

Located in the Tenkinsky District of the Magadan Region, the Degdekanskoye gold ore field is estimated to hold 38.3 tonnes (t) of gold in the C1+C2 category with an average grade of 2.2g/t, excluding off-balance-sheet reserves, according to the State Reserves Commission.

The acquisition forms part of Alrosa’s strategy to foray into gold to bolster its financial strength, without significantly altering its core business strategy.

Alrosa is planning to make an initial investment of Rbs24bn for the development of the Degdekan deposit, reported Reuters.

JSC Almazy Anabara general director Alexey Okorokov said: “The development of the deposit is planned to begin after the feasibility study is updated. The deposit has convenient access to transport and energy infrastructure – 5km from the transport artery.

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“According to the preliminary plan, the deposit is planned to be put into operation in 2028. It is planned to build a quarry, a gold extraction plant, a tailings storage facility, infrastructure and energy facilities. Initial investments in the project are estimated at Rbs24bn.”

The development of the Degdekan site is projected to continue until 2046. Starting from 2030, the Degdekan project is expected to have peak annual gold production capacity of 3.3t.

Alrosa CEO Pavel Marinychev said: “The development of the gold ore deposit will provide an additional synergistic effect for Alrosa’s business and will contribute to increasing its financial stability in the long term.”

The sale forms part of Polyus’ efforts to streamline its exploration portfolio. This decision comes as Polyus gears up to commence development on the Sukhoi Log gold deposit in Siberia.