JP Morgan's sensitivity analysis was based on the bank's base case gold price; at spot the NPV climbs a further $4 billion to around $17 billion.
"Even assuming a conservative $1,200/oz gold price in real terms, we calculate a robust NPV of about $8 billion (with >35% IRR), backed by large-scale high-grade open-pit operations and relatively low capex intensity," said JP Morgan.
The bank said it expected a further re-rating of London-listed Polyus "as the market gains more visibility around Sukhoi Log's future and as it gradually moves towards completion".
Polyus announced plans late September to accelerate the buy-out of Rostec - it's JV partner in Sukhoi Log. The transaction brought the total paid by Polyus for the asset to $438 million.
Sukhoi Log, located in Russia's Irkutsk region and which has current JORC resources of 63Moz at an average grade of 2.1gpt, effectively became available for development only in 2017 when Russia's government ‘awarded it' to Polyus and Rostec.