Last week the world's largest stockpile of gold was revealed when Russia’s largest gold producer, Polyus PJSC, said its untapped Sukhoi Log deposit in Siberia holds the world’s biggest reserves.
A company audit showed Sukhoi Log has 40 million ounces of proven reserves as measured by international JORC standards, with an average gold content of 2.3 grams per ton, according to Chief Executive Officer Pavel Grachev. Additionally, the estimated Mineral Resources for Sukhoi Log stand at 1,110 million tonnes, with an average grade of 1.9 g/t Au and containing 67 million ounces of gold as at 31 May 2020. This means that the monetary value of the estimated gold holdings is just over $127 billion at today's prices.
That means the field - accounting for more than a quarter of Russian gold reserves - is bigger than Seabridge Gold Inc.’s KSM Project in Canada and Donlin Gold in Alaska.
"The estimate of the reserves is an important milestone in development of the field," Grachev said in interview in Moscow.
Sukhoi Log, located in the isolated Irkutsk region deep in the heart of Siberia, was discovered by Soviet geologists in 1961 and studied in the 1970s. The government had long considered offloading the deposit, and in 2017 sold the field in an auction to Polyus and a state partner, which the mining company later bought out.
Some more details on Sukhoi Log:
- The audit shows that as well as economically mineable reserves, the deposit has 67 million ounces of total resources, up from 63 million ounces previously estimated.
- That figure may rise after more drilling and studies.
- Main investment is due to start in 2023. Polyus has already started spending on infrastructure for the project, including co-investing with the government on the reconstruction of a local airport.
The world's biggest gold deposits will likely remain untouched for the foreseeable future. According to Bloomberg, Polyus said earlier this year that it would focus on smaller projects and reducing its debt ratio in the coming years before developing the giant field. The company plans to announce details on expected production and investment at Sukhoi Log once a pre-feasibility study is ready by year-end. It previously said that costs could reach $2.5 billion, with annual output totaling about 1.6 million ounces, or just over $3 billion at current gold prices.
While developing giant deposits is typically a lengthy and costly process, the field may allow Polyus to boost annual output by at least 70%. Gold prices have rallied about 60% since the company purchased it, and reached a record in August as vast amounts of stimulus were pumped into economies to curb the damage from the coronavirus pandemic.
"We want to show that a project of this quality and scale can and should be carried out, taking into account the best environmental standards, despite the hard-to-reach location," Grachev said.