Polymetal International has signed an agreement to acquire an additional 31.7% stake in Amikan, which holds the licence for the Veduga gold deposit in the Krasnoyarsk Region of Russia.

The proposed all-stock deal, which is valued at $19.7m, will enhance its interest in the high-grade refractory gold deposit to 74.3%.

As part of the deal, Polymetal will issue 2,456,049 new ordinary shares to two Amikan’s shareholders, SIBPROJECT and a private investor Malakh, in exchange for the stake.

Polymetal Group CEO Vitaly Nesis said: “Obtaining a controlling stake in Veduga will allow us to explore multiple strategic options for this large and high-grade asset, including potentially selling the asset as it remains non-core for Polymetal.

“In the meantime, Polymetal will continue to process Veduga’s high-grade ore at our existing processing facilities.”

Amikan has reported pre-tax loss of $17.3m. The company’s assets are valued at $66.8m.

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Veduga is estimated to have 1.4Moz of gold at 4.8g/t and additional mineral resources of 0.4Moz at 4.9g/t.

“Obtaining a controlling stake in Veduga will allow us to explore multiple strategic options for this large and high-grade asset.”

Originally, Polymetal owned a 50% stake in the project, acquired through its joint venture with AngloGold Ashanti. Thereafter, the company diluted a portion of its interest by external equity financing.

The open-pit mine at Veduga has produced 2,882kt of ore with an average grade of 3.84g/t containing 356koz since 2012.

Ore extracted from the mine was procured by processing plants including Polymetal’s Varvara and Polyus’ Olimpiada.

The project hosts four licence plots covering an aggregated area of 18km² and is located in a prolific Northern Yenisey gold belt.