Polymetal International has increased its holding in the Prognoz silver property in Eurasia by acquiring an additional 50% stake for $140m in shares.

The company purchased the stake via the issuance of 14,152,668 new ordinary shares.

Polymetal will also be required to pay a net smelter return (NSR) royalty of 0.5%-2.5% under the deal, with a ceiling of $40m.

The royalty is contingent upon the price of silver meeting the threshold of $19 per ounce (oz).

“Prognoz is a unique silver asset in terms of size and grade and will, in time, supplant Polymetal’s Dukat as one of the leading silver mines globally.”

Prognoz has indicated and inferred resources of 292 million ounces (Moz) at 586 grams per tonne (g/t) of silver.

The company is currently planning to undertake 46km of diamond drilling and in-house metallurgical test works at the property.

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An updated resource estimate is expected in the fourth quarter of the year.

Polymetal group CEO Vitaly Nesis said: “We are very satisfied with the consolidation of 100% of Prognoz and the strengthening of our long-term growth pipeline.

“Prognoz is a unique silver asset in terms of size and grade and will, in time, supplant Polymetal’s Dukat as one of the leading silver mines globally.”

In a separate transaction, the company is expected to exercise its call option to acquire the remaining 75.3% stake in the Nezhda gold property in Russia for a sum of $144m.

Polymetal will increase its total stake in the asset to 100% upon the closing of the acquisition.

The transaction is expected to be completed at the end of the year and is conditional upon the receipt of the necessary Russian regulatory approvals.

The Nezhda asset is located in north-east Yakutia and has estimated proven and probable ore reserves of 1.9Moz of gold.

A detailed development plan for the property is expected in the fourth quarter of this year.

Activities currently planned under the project include additional exploration, metallurgical testing and detailed engineering works.

First gold from the property is currently expected to be produced in 2022 with a projected average annual production of 150,000oz of payable gold in concentrate.