POLYMETAL INTERNATIONAL PLC 18 April 2018
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - 'Polymetal', the 'Company', or the 'Group') is pleased to announce the Group's production results for the first quarter ended March 31, 2018.
HIGHLIGHTS
Polymetal produced 295 Koz of gold equivalent ('GE') in the first quarter of 2018, a 5% year-on-year ('y-o-y') increase. Strong performances at Albazino, Varvara, and Svetloye more than compensated for the grade-driven decline at Omolon.
Gold production for the quarter increased 8% over the previous year to 214 Koz, while silver production decreased by 3% to 6.0 Moz.
Q1 revenues increased 19% year-on-year to US$ 354 million driven by volume growth, higher commodity prices, and lesser impact from seasonal refinery closures (compared to the previous year). Silver sales traditionally lagged production due to the seasonal increase in concentrate inventories. This working capital build-up is expected to reverse by year-end, whereas gold sales volumes were largely in line with production.
At Kyzyl, construction activities are anticipated to complete slightly ahead of schedule. Dry commissioning of the processing plant is expected to start on June 1st, while first concentrate production is expected on August 1st.
Net debt increased from US$ 1,421 million as at 31 December 2017 to US$ 1,578 million as at 31 March 2018, primarily due to the accumulation of silver inventory and seasonal advance purchases of diesel fuel and other consumables. Free cash flow generation in 2018 will, as is usual for Polymetal, be weighted towards the second half of the year.
The Company remains on track to produce 1.55 Moz of GE in 2018 and reiterates its annual cost guidance: total cash costs in the range of US$ 650-700/ GE oz and AISC costs in the range of US$ 875-925/GE oz. The cost guidance remains contingent on the Rouble/Dollar exchange rate dynamic, which has a significant effect on the Group's operating costs.
In April 2018, Polymetal increased its ownership in the Prognoz silver property to 50%, which is the largest undeveloped primary silver deposit in Russia. An updated JORC-compliant mineral resource estimate and a preliminary economic assessment for the asset will be published in Q4 2018.
We are saddened to report a fatal accident on March 3rd, 2018 at our Kapan operation in which an underground miner died from gas poisoning. The management team are currently developing a comprehensive action plan aimed at mitigating the risks associated with air quality and efficiency of ventilation in underground mines. The first steps included the purchase of additional air monitoring equipment including the introduction of remote air quality sensors throughout our operations.
'We got off to a steady start in 2018 with stable production results at all our mines', said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. 'The successful launch of Kyzyl will demonstrate Polymetal's ability to successfully deliver on new projects while continuing to efficiently run our existing operations'.
3 months ended Mar 31, | % change1 | ||
2018 | 2017 | ||
Waste mined, Mt | 28.8 | 25.5 | +13% |
Underground development, km | 32.8 | 24.9 | +32% |
Ore mined, Kt | 3,190 | 3,314 | -4% |
Open-pit | 2,036 | 2,203 | -8% |
Underground | 1,152 | 1,110 | +4% |
Ore processed, Kt | 3,061 | 2,843 | +8% |
Production | |||
Gold, Koz | 214 | 199 | +8% |
Silver, Moz | 6.0 | 6.1 | -3% |
Copper, Kt | 0.7 | 0.5 | +58% |
Zinc, Kt | 1.3 | 1.1 | +28% |
Gold equivalent, Koz2 | 295 | 280 | +5% |
Sales | |||
Gold, Koz | 206 | 176 | +17% |
Silver, Moz | 4.8 | 4.6 | +4% |
Copper, Kt | 0.9 | 0.1 | +1139% |
Zinc, Kt | 0.3 | 0.5 | -52% |
Revenue, US$m3 | 354 | 298 | +19% |
Net debt, US$m4 | 1,578 | 1,421 | +11% |
Safety5 | |||
LTIFR | 0.15 | 0.12 | +25% |
Fatalities | 1 | - | +100% |
Notes: 1 % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release. | |||
PRODUCTION BY MINE
3 months ended March 31, | % change (Y-o-Y) | ||
2018 | 2017 | ||
GOLD EQ. (KOZ) | |||
Dukat | 80 | 79 | +2% |
Albazino-Amursk | 90 | 68 | +32% |
Mayskoye | - | 5 | -100% |
Omolon | 31 | 51 | -38% |
Voro | 26 | 26 | +1% |
Varvara | 35 | 29 | +21% |
Svetloye | 8 | - | NA |
Okhotsk | 11 | 11 | +0% |
Kapan | 12 | 10 | +18% |
TOTAL | 295 | 280 | +5% |
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, 18 April, 10:00 London time (12:00 Moscow time).
To participate in the call, please dial:
8 10 800 500 98 63 access code 38517108# (free from Russia), or
+44 20 3009 24 63 (free from the UK), or
+1 646 502 51 25 (free from the US), or
any of the above numbers (from outside the UK, the US and Russia) or follow the link: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=5539.
Please be prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=5539. A recording of the call will be available immediately after the call at +44 20 3364 5147 (from within the UK), +1 (646) 722-4969 (USA Toll Free) and +7 (495) 249-16-71 (from within Russia), access code 418753592#, from 10:30 London time (12:30 Moscow time) Wednesday, April 18, till 10:30 London time (12:30 Moscow time) Wednesday, April 25, 2018.
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Polymetal International plc published this content on 18 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 April 2018 06:11:08 UTC
