Russia to auction its largest gold field 'shortly'

Russia will auction off its largest unmined gold deposit in the nearest future despite the prohibitive cost of reaching the remote eastern Siberian field, Vedomosti newspaper reported on Monday. Sukhoi Log's estimated reserves of 2,000 and 3,000 tonnes (64.3 million to 96.4 million Troy ounces) of gold and a smaller amount of silver make it into one of the world's largest untapped deposits of the precious metal. The field -- located in the vast Irkutsk region of eastern Siberia -- has been labeled "strategic" by the Russian government and is not subject to bids from foreigners. But Russia is now undergoing a new privatisation campaign and the business daily cited First Deputy Prime Minister Igor Shuvalov as saying the auction terms would be announced "shortly". His spokesman specified that the final announcement's timing would depend on market conditions and come after a round of consultations with experts and financial consultants. But the paper noted that similar comments had been issued in 2009 and 2010 without any progress toward a sale. It also quoted senior employees at Russia's largest mining companies as saying they had no new information from the government about the field. Sukhoi Log (meaning Dry Ravine in English) suffers from a series of drawbacks that have been under study for some 50 years. Studies show that its ore has a low gold concentration and needs to be enriched. It also remains inaccessible by road and has no independent or outside supply of the water required for processing. Vedomosti added that the Irkutsk region suffers from regular electricity problems that would further need to be addressed by the perspective developer. The government's own estimates say the project would take 12 years to develop at a cost of 49 billion rubles ($1.5 billion).