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ALROSA announces JORC reserves and resources

ALROSA (or “the Company”), the world’s largest diamond producer, announces its JORC compliant reserves and resources as of 1 July 2013 and an update on its Long Term Development Plan, including its capital investment programme.

The information presented below is an extract from an independent expert report (the “Micon Report”) that was prepared by Micon International Co Ltd. (“Micon”) assessing the JORC compliant reserves and resources of the major deposits of the Company. The assessment covered all major deposits of the Company, excluding certain alluvial deposits and undeveloped resources. The production plans and capital investment programme presented herein are based on the JORC production schedules for the deposits included within the perimeter of the assessment and on the Company’s Long Term Development Plan for the other assets.

As at 1 July 2013, ALROSA’s JORC compliant reserves were measured at 608 mct with an average grade of 1.34 ct/t, the Company’s compliant resource base stood at 973 mct (68% measured and indicated) with an average grade of 1.38 ct/t.

The following table summarizes the Reserves and Resources of ALROSA’s assets covered within the JORC audit perimeter as at 1 July 2013:

JORC Category Tonnage (kt) Diamond Grade
(ct/t)
Contained Diamonds (kct)
Reserves:
Proven 4,820 1.52 7,329
Probable 448,469 1.34 600,178
Total 453,289 1.34 607,507
Resources:
Measured 4,820 1.52 7,329
Indicated 467,197 1.41 657,477
Measured + Indicated 472,017 1.41 664,806
Inferred 232,298 1.33 308,235
Total JORC Resources 704,315 1.38 973,041

The Micon Report includes highlights from the Company’s Long Term Development Plan. In its Long Term Development Plan, ALROSA is targeting production of 36.4 million carats in 2013 and 41.3 million carats by 2021. In aggregate, the Long Term Development Plan assumes production of 353.2 million carats between 2013 and 2023. The estimated capital expenditures set forth in the Micon report amount to 33 billion roubles in 2013 and to 256 billion roubles in total during the period 2013 to 2021.

Cautionary Note: The targets set forth in ALROSA’s Long Term Development Plan are based on a wide range of assumptions about matters that are inherently uncertain, and ALROSA’s ability to execute its Long Term Development Plan is dependent on a wide range of factors, many of which are beyond its control. Many of the deposits for which the Long Term Development Plan targets future production are in a very early stage of development and in some cases further work remains to be done to verify the resources and reserves associated with the deposits. No assurance can be given that actual production will match the targets set forth in the Long Term Development Plan.

REFERENCE: 

ALROSA is engaged in the exploration, mining, manufacturing and sales of diamonds. The Company’s operations are located in the Republic of Sakha (Yakutia) and Archangelsk region of Russia. In 2012 the Company produced 34.4 million carats of rough diamonds; revenue in 2012 was RUB 150.9 billion according to IFRS.

ALROSA Media Center::
E-mail: smi@alrosa.ru
Phone/fax: +7 (495) 620–92–50, ext. 13-21
ALROSA Investor Relations Center:
E-mail: ir@alrosa.ru
Phone: +7 (495) 745-58-72

 

Forward looking statements

This release and the accompanying extract contain forward looking statements, including statements regarding: trends in diamond prices; trends in supply and demand for rough diamonds; plans, strategies and objectives of management; anticipated production or construction commencement dates; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities and other developments.

Forward looking statements can be identified by the use of terminology such as ‘intend’, ‘aim’, ‘project’, ‘anticipate’, ‘estimate’, ‘plan’, ‘believe’, ”target”, “forecast”, “plan” ‘expect’, ‘may’, ‘should’, ‘will’, ‘continue’ or similar words. These statements discuss future expectations concerning the results of operations or financial condition, or provide other forward looking statements.

These forward looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release and related materials. Readers are cautioned not to put undue reliance on forward looking statements. For example, our future revenues from our operations, projects or mines described in this release will be based, in part, upon the market price of the rough diamonds produced, which may vary significantly from current levels or expectations. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular project, the expansion of certain facilities or mines, or the continuation of existing operations.

Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated lives of operations, mines or facilities include the impact of foreign currency exchange rates on the market prices of the rough diamonds we produce; regulatory developments; difficult mining conditions; and other factors affecting our business generally. Except as required by applicable regulations or by law, ALROSA does not undertake any obligation to publicly update or review any forward looking statements, whether as a result of new information or future events.

No offer of securities

Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell ALROSA securities in any jurisdiction.

Reliance on third party information

The views expressed in this release and related materials contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This release should not be relied upon as a recommendation or forecast by ALROSA.

Reserves Presentation

The diamond resources and reserves estimates provided in this press release and the accompanying extract have been prepared and presented in accordance with the standards and classifications of the JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as promulgated by the Australasian Joint Ore Reserves Committee) and Russia’s State Commission on Mineral Reserves (GKZ), which differ in significant respects from the standards and classifications applicable to the disclosure of mineral resources and reserves under the laws and regulations of certain other jurisdictions, including the regulations of the U.S. Securities Exchange Commission (the “SEC”) with respect to registration statements and other documents filed with the SEC. Among other things, in accordance with the JORC Code, this Information provides certain mineral resources estimates classified as “inferred”, “indicated” or “measured”, and in accordance with GKZ this information includes category A, B and C1 reserves and both of JORC Code and GKZ estimates, which differ in significant respects from “probable” and “proven” mineral reserves estimates and are not disclosed in certain jurisdictions, including in SEC filings. There can be significant uncertainty as to whether mineral resources can ever be feasibly and commercially mined. For further explanation of the JORC Code, see the JORC website at www.jorc.org

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