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Russia clears Barrick to acquire PGM stakes

by Franc MwanjisiSunday Observer
February 8th, 2009

The Russian government said on Thursday that it had cleared Canada`s Barrick Gold to increase its stake in the Fedorova Tundra deposit in Russia`s Murmansk Region to 79 percent from 50 percent currently, a statement released by Barrick in Dar es Salaam yesterday said.

The Russian move comes at a time when the Norwegian government has sold out all its shares following a strong pressure from Norwegian human rights and environmental groups.

Barrick Gold, the world`s largest gold miner, has a joint venture with Russian exploration company Pana that holds the license to develop the platinum group metals (PGM) deposit.

In December, the joint venture, called Fedorovo Resources, confirmed the reserves of the deposit with the State Reserves Committee. The exact amount of the deposit’s reserves has not been provided.

According to preliminary data, the deposit’s reserves amount to about 100,000 tonnes of ore with 0.35 grammes of platinum per tonne, 1.4 grammes of palladium per tonne, and 0.09 grams of gold per tonne.

The ore at the deposit also contains 0.078 percent nickel and 0.126 percent copper.

According to earlier reports, Barrick planned to launch production of PGMs at the deposit in 2012 and invest US $770 million along with Pana.

The companies planned to build two open pit mines at the deposit and a mill with production capacity of 150,000 tonnes of concentrate with a nickel and copper content of about 6.7 percent as well as 98 grammes of PGMs per tonne.

Barrick earlier said that starting in 2010, it expected to mine 150,000 tonnes of concentrate per year for 13 years at two mines, at the Western Fedorova and Eastern Fedorova ore bodies.

The concentrate is expected to contain 6.7 percent nickel and copper and 98 grammes of platinum group metals per tonne.

The company reckons the potential customer for the concentrate would be MMC Norilsk Nickel (RTS: GMKN), which would process the concentrate at its Severonikel plant.


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