A press statement this week from the southeastern Siberian town of Irkutsk revived hopes that Russia’s El Dorado, and one of the world’s largest unmined gold deposits, may be about to go on the market.
Sukhoi Log (“Dry Gulch”in Russian), according to Nikolai Suslov, deputy head of the Irkutsk region agency for natural resources (Irkutsknedra), may be put up for public auction “ïn the next few months” — “by the end of 2007, or the beginning of 2008″. Suslov’s timing was initially reported by Interfax, and then Bloomberg picked up the story. The full report of Suslov’s remarks indicate that his focus was on two relatively minor prospecting licences to be put on the block in September and October — the Isko-Tagulsky nickel prospect, and the Uryahsky gold deposit.
When Mineweb asked Suslov to clarify what he believes is about to happen for Sukhoi Log, he declined to say; and a spokesman said no-one else at the Irkutsk branch of the resource licensing agency was willing to speak in his place.
Yulia Zavzina, spokesman for the Ministry of Natural Resources in Moscow — parent of the federal natural resource agency, Rosnedra, to which Irkutsknedra reports — passed the buck. “We don’t know,” Zavzina said, “and we can’t comment for Irkutsknedra. You had better speak to Rosnedra or Irkutsknedra directly.”
At Rosnedra, agency spokesman Natalia Ivanova told Mineweb that Suslov’s remark had aroused his federal superiors, and they responded that a reserve assessmernt was currently under way for Sukhoi Log. Zavzina told Mineweb they cannot say when it will be finished.” She added: “There could be no talking about an auction before the revaluation will be finished.”
Sukhoi Log was prospected during the Soviet period, when reserves were estimated at 26 million ounces. In the early 1990s, drilling by Australian junior Star Mining, with South African assistance, indicated reserves of about 33 million oz. Star’s licence to mine Sukhoi Log was revoked in 1997 in a raid that went badly wrong for Lenzoloto, Star’s erstwhile partner at the time; Star’s SA partner was JCI. Since then Barrick Gold tried, and also failed, to get its hands on the licence. Several attempts followed by the Norilsk Nickel-Polyus group to lobby for a swift auction process to put the asset in their hands, but they too failed.
Polyus Gold remains a serious contender, but its influence has been limited with the Kremlin, where the final decision on whether to sell Sukhoi Log remains. Polyus spokesman Denis Davidov told Mineweb his company has no comment. A source close to Polyus dismissed Suslov’s comment as unserious. The source confirmed that until the revaluation of reserves is completed, and the new numbers approved, “nothing will be issued and the revaluation itself has not been done yet.”
The other major Russian contender for Sukhoi Log is Polymetal of St. Petersburg, owned by Suleiman Kerimov. A source there told Mineweb he isn’t taking the latest remark seriously, and he sees no prospect of a tender for the gold deposit until after President Vladimir Putin’s successor is elected, and takes office, next spring.