Polymetal International plc (POLY)
Polymetal: Q1 2021 production results
22-Apr-2021 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 22 April 2021 Polymetal International plc Q1 2021 production results
Polymetal reports solid production results for the first quarter
ended March 31, 2021.
"In Q1 2021, Polymetal delivered strong production, strong free
cash flow, and steady progress across development projects", said
Vitaly Nesis, Group CEO of Polymetal. "COVID-related construction
cost inflation remains a pressing concern despite gradual
improvements in the epidemiological situation".
HIGHLIGHTS ? No fatal accidents occurred among Group workforce
and contractors in Q1 2021 (consistent with Q1 2020). Lost time
injury frequency rate (LTIFR) among the Group's employees stood
at 0.25 (0.07 in Q1 2020) as there were seven
lost-time accidents mostly related to falling or being hit by an
object. ? Gold equivalent ("GE") production in Q1 grew by 3%
year-on-year (y-o-y) to 375 Koz. All-time highest quarterly
production from Varvara and strong performance across other
assets offset the planned grade-driven decline at
Kyzyl. ? Revenue for the quarter increased by 20% y-o-y to USUSD
593 million on the back of higher gold and silver prices. A
traditional lag between silver concentrate production and sales
at Dukat is expected to close in H2 2021 as well as
a lag in gold sales primarily related to Dore from Kyzyl
con?entrate. ? Net Debt decreased by USUSD 29 million during the
quarter to USUSD 1.32 billion as Polymetal generated positive
quarterly free cash flow despite seasonal inventory
accumulation. ? Construction and development activities at Nezhda
and POX-2 projects progressed on schedule even amid continued
tightness in the construction contractor market and
COVID-related cross-border travel restrictions. Nezhda is
scheduled to achieve mechanical completion on September 1, 2021
and produce first concentrate on November 1, 2021. ? Polymetal
confirms its 2021 production guidance of 1.5 Moz of GE. It also
maintains the full-year cost guidance of
USUSD 700-750/GE oz for TCC and USUSD 925-975/GE oz for AISC.
The cost guidance remains contingent on the Russian
rouble and Kazakh tenge exchange rate dynamics. ? The Company
will host its annual Analyst & Investor Day including ESG
presentation on 27 April 2021 in Moscow (for
full details please refer to our website), where our mid-term
GHG emission reduction targets will be announced.
OPERATING HIGHLIGHTS
3 months ended Mar 31, %
2021 2020 change1
Waste mined, Mt 45.4 39.9 +14%
Underground development, km 23.0 23.1 -0%
Ore mined, Mt 3.77 3.89 -3%
Open-pit 2.79 2.90 -4%
Underground 0.98 0.99 -1%
Ore processed, Mt 3.59 3.51 +2%
Average grade in ore processed, g/t 3.8 4.2 -10%
Production
Gold, Koz 337 324 +4%
Silver, Moz 4.6 4.9 -7%
Gold equivalent, Koz2 375 365 +3%
Sales
Gold, Koz 280 271 +3%
Silver, Moz 3.7 4.7 -21%
Revenue, USUSDm3 593 494 +20%
Net debt, USUSDm4 1,321 1,351 -2%
Safety
LTIFR5 0.25 0.07 +257%
Fatalities 0 0 NA
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.
(2) Based on 120:1 Au/Ag conversion ratio (prior to Q2 2020,
Polymetal used 80:1 Au/Ag ratio) and excluding base metals
(previously were included). Historical comparative data restated
accordingly.
(3) Calculated based on the unaudited consolidated management
accounts.
(4) Non-IFRS measure based on unaudited consolidated management
accounts. Comparative information is presented for 31 December
2020.
(5) LTIFR = lost time injury frequency rate per 200,000 hours
worked among Polymetal employees.
PRODUCTION BY MINE
3 months ended Mar 31, %
2021 2020 change
GOLD EQ. (KOZ)1
Kyzyl 89 109 -18%
Albazino 77 78 -1%
Varvara 60 43 +38%
Dukat 48 52 -7%
Omolon 47 42 +11%
Svetloye 27 21 +26%
Voro 22 20 +8%
Mayskoye 6 0 NA
TOTAL 375 365 +3%
Notes: (1) Based on 120:1 Au/Ag conversion ratio (prior to Q2
2020, Polymetal used 80:1 Au/Ag ratio) and excluding base metals
(previously were included). Historical comparative data restated
accordingly.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Thursday,
22 April 2021 at 12:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 (0) 330 336 9126 (local access)
0800 358 6377 (toll free)
From the US:
+1 646 828 8143 (local access)
800 263 0877 (toll free)
From Russia:
+7 495 213 1767 (local access)
8 800 500 9283 (toll free)
To participate from other countries, please dial any of the
local access numbers listed above.
Conference code: 1505703
To participate in the webcast follow the link:
https://www.webcast-eqs.com/polymetal20210422.
Please be prepared to introduce yourself to the moderator or
register.
A recording of the call will be available at +44 (0) 207 660
0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 800
2702 1012 (from Russia), access code 1505703, from 15:30 London
time Thursday, 22 April, till 15:30 London time Thursday, 29 April
2021. Webcast replay will be available on Polymetal's website
(www.polymetalinternational.com) and at
https://www.webcast-eqs.com/polymetal20210422.
About Polymetal
Polymetal International plc (together with its subsidiaries -
"Polymetal", the "Company", or the "Group") is a top-10 global gold
producer and top-5 global silver producer with assets in Russia and
Kazakhstan. The Company combines strong growth with a robust
dividend yield.
Enquiries
Media Investor Relations
Polymetal ir@polymetalinternational.com
FTI Consulting
Evgeny Monakhov +44 20 7887 1475 (UK)
Leonid Fink +44 20 3727 1000
Timofey Kulakov
Viktor Pomichal
Kirill Kuznetsov +7 812 334 3666 (Russia)
Joint Corporate Brokers
Morgan Stanley & Co. International plc +44 20 7425 8000
Andrew Foster
RBC Europe Limited
Richard Brown
Marcus Jackson +44 20 7653 4000
Panmure Gordon Jamil Miah
Daniel Norman
+44 20 7886 2500
John Prior
Forward-looking statements
This release may include statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements speak only as at the date of this release. These
forward-looking statements can be identified by the use of
forward-looking terminology, including the words "targets",
"believes", "expects", "aims", "intends", "will", "may",
"anticipates", "would", "could" or "should" or similar expressions
or, in each case their negative or other variations or by
discussion of strategies, plans, objectives, goals, future events
or intentions. These forward-looking statements all include matters
that are not historical facts. By their nature, such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the company's
control that could cause the actual results, performance or
achievements of the company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the company's present and
future business strategies and the environment in which the company
will operate in the future. Forward-looking statements are not
guarantees of future performance. There are many factors that could
cause the company's actual results, performance or achievements to
differ materially from those expressed in such forward-looking
statements. The company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained herein to reflect any change
in the company's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statements
are based.
KYZYL
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 20.2 19.2 +5%
Ore mined (open-pit), Kt 556 523 +6%
PROCESSING
Ore processed, Kt 563 526 +7%
Gold grade, g/t 6.0 8.0 -26%
Gold recovery 88.8% 87.2% +2%
Concentrate produced, Kt 35 36 -2%
Concentrate gold grade, g/t 85.0 101.4 -16%
Gold in concentrate, Koz1 96 116 -18%
Concentrate shipped, Kt 27 21 +29%
Payable gold shipped, Koz 46 41 +12%
Amursk POX
Concentrate processed, Kt 12 16 -25%
Gold grade, g/t 137.3 135.8 +1%
Gold recovery 92.4% 91.8% +1%
Gold produced, Koz 43 67 -36%
TOTAL PRODUCTION
Gold, Koz 89 109 -18%
Note: (1) For information only; not considered as gold produced
and therefore not reflected in the table representing total
production. It will be included in total production upon shipment
to off-taker or dore production at Amursk POX.
(2) To be further processed at Amursk POX.
Mining volumes continued to increase without addition of new
equipment as the "Hot Seat" fleet productivity program yielded
material results. Grade processed declined towards the open-pit
reserve average.
The concentrator delivered record quarterly throughput, while
recovery increased by 2 p.p. y-o-y following the debottlenecking of
thickening and drying sections. These improvements partially
balanced the planned grade decline.
ALBAZINO
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 5.1 4.8 +6%
Underground development, km 3.3 3.1 +6%
Ore mined, Kt 495 517 -4%
Open-pit 308 360 -14%
Underground 187 157 +19%
PROCESSING
Albazino concentrator
Ore processed, Kt 427 445 -4%
Gold grade, g/t 4.3 4.5 -5%
Gold recovery1 88.7% 85.6% +4%
Concentrate produced, Kt 33 36 -9%
Concentrate gold grade, g/t 49.5 48.1 +3%
Gold in concentrate, Koz2 52 56 -6%
Amursk POX
Concentrate processed, Kt 48 46 +6%
Gold grade, g/t 52.8 53.6 -1%
Gold recovery 96.5% 96.4% +0%
Gold produced, Koz 77 78 -1%
TOTAL PRODUCTION
Gold, Koz 77 78 -1%
Notes: (1) To concentrate.
(2) For information only; not considered as gold produced and
therefore not reflected in the table representing total production.
Included in total production after Dore production at the Amursk
POX.
Underground mining volumes increased as Ekaterina underground
mine ramped up stoping volumes while the new Anfisa underground
mine below the main open pit accessed ore.
Open-pit ore mining reduced as the focus shifted to the
pre-stripping of the new Farida open pit. The final pushback
commenced at the Anfisa open pit.
Recovery at the concentrator improved by 3 p.p. as ore mix
shifted to less clayey ores from deeper underground levels.
Construction activities at the Kutyn heap leach project are
progressing on schedule with basic site infrastructure and access
road completed.
MAYSKOYE
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 0.9 1.1 -12%
Underground development, km 5.1 5.5 -8%
Ore mined, Kt 191 261 -27%
Open-pit 13 78 -84%
Underground 178 183 -3%
PROCESSING
Ore processed, Kt 217 227 -5%
Gold grade, g/t 6.2 5.7 +8%
Gold recovery 92.5% 91.2% +1%
Gold in concentrate, Koz2 40 38 +5%
Gold produced in dore from concentrate (POX), Koz 1 - NA
Gold produced in dore from carbon, Koz3 5 - NA
TOTAL PRODUCTION
Gold, Koz 6 - NA
Notes: (1) To concentrate.
(2) For information only; not considered as gold produced and
therefore not reflected in the table representing total production.
Included in total production upon sale to off-taker or dore
production at Amursk POX.
(3) Gold produced from carbon at Amursk POX and Voro.
Open-pit mining of oxidised ore at Zone 1 recommenced with the
next pushback enabled by favorable commodity price environment.
Processing will start in Q2 2021.
Underground ore grade continued to improve as focus shifted to
timely and precise backfill activities needed to limit
dilution.
All of the excavations for the new underground material handling
system have been completed. The installation of the conveyor frame
has commenced. The launch of the system is planned for Q2 2022.
AMURSK POX
3 months ended Mar 31,
% change
2021 2020
Concentrate processed, Kt 60 62 -2%
Albazino 44 41 +9%
Kyzyl 12 16 -25%
Veduga 4 1 +177%
Other1 - 3 -100%
Gold recovery 94.9% 94.2% +1%
Average gold grade, g/t 69.6 74.9 -7%
Average sulphur grade 13.5% 14.2% -5%
Total gold produced2, Koz 121 145 -17%
Albazino 67 60 +13%
Kyzyl 43 67 -36%
Veduga 9 14 -35%
Mayskoye 1 0 +220%
Other1 - 3 -100%
Notes: (1) Purchased concentrates which are included in
reportable production in the Albazino segment.
(2) For information only. Already accounted for in production at
operating mines. Excluding gold produced from Mayskoye loaded
carbon.
Amursk POX Q1 gold output decreased by 17% y-o-y to 121 Koz on
the back of lower volumes of Kyzyl concentrate introduced into feed
relative to high base of 2020. Recovery rate was marginally higher
as more Albazino concentrate was processed. VARVARA
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 9.5 10.2 -6%
Ore mined, Kt 1,056 782 +35%
PROCESSING
Leaching
Ore processed, Kt 764 734 +4%
Gold grade, g/t 1.7 1.5 +13%
Gold recovery1 86.4% 87.0% -1%
Gold production (in dore), Koz 46 35 +33%
Flotation
Ore processed, Kt 190 129 +47%
Gold grade, g/t 2.6 3.1 -19%
Recovery1 84.6% 85.7% -1%
Gold in concentrate, Koz 13 9 +54%
Veduga ore toll processed, Kt2 - 30 -100%
Total ore processed, Kt 954 893 +7%
TOTAL PRODUCTION
Gold, Koz 60 43 +37%
Note: (1) Technological recovery, includes gold and copper
within work-in-progress inventory. Does not include toll-treated
ore.
(2) To be further processed at Amursk POX.
Quarterly gold production hit a record 60 Koz driven by high
grade leach ore from Komar, higher processed volumes, and
significant release of work-in-progress inventory. Total quarterly
ore processed was also highest in the concentrator's 13-year
operating history.
Flotation circuit grades fell as more own ore was processed
compared with the stable quantities of third-party material.
DUKAT OPERATIONS
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 0.4 - NA
Underground development, km 11.7 11.3 +4%
incl. Primorskoye 0.5 - NA
Ore mined, Kt 645 539 +20%
Open-pit 104 - NA
Underground 542 539 +0%
PROCESSING
Omsukchan concentrator
Ore processed, Kt 513 513 -0%
Grade
Gold, g/t 0.5 0.5 -1%
Silver, g/t 252 286 -12%
Recovery1
Gold 83.2% 84.5% -2%
Silver 86.8% 86.0% +1%
Production
Gold, Koz 6 6 +1%
Silver, Moz 3.5 3.9 -10%
Lunnoye plant
Ore processed, Kt 116 116 -0%
Grade
Gold, g/t 1.5 1.5 -2%
Silver, g/t 252 269 -6%
Recovery1
Gold 91.7% 90.7% +1%
Silver 92.2% 91.4% +1%
Production
Gold, Koz 5 5 +2%
Silver, Moz 0.9 0.9 -5%
TOTAL PRODUCTION
Gold, Koz 11 11 +1%
Silver, Moz 4.4 4.8 -9%
Notes: (1) Technological recovery, includes gold and silver
within work-in-progress inventory.
Dukat experienced planned decline in silver grades as mining
focus continues to shift to mechanized stoping at very narrow
veins, with higher dilution.
At a satellite high-grade Primorskoye underground mine,
development commenced with first direct-shipment silver ore
expected to be mined in Q2 2021.
Open-pit mining of crown pillars and near-surface vein
off-shoots re-commenced after the depleted mining voids at several
large ore bodies have been completely backfilled by underground
development waste.
OMOLON OPERATIONS
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 0.3 0.9 -66%
Underground development, Km 2.7 3.3 -19%
Ore mined, Kt 73 802 -91%
Open-pit - 689 -100%
Underground 73 113 -35%
PROCESSING
Kubaka Mill
Ore processed, Kt 212 213 -1%
Grade
Gold, g/t 6.9 6.9 -1%
Silver, g/t 23 14 +68%
Recovery1
Gold 92.8% 92.1% +1%
Silver 77.8% 83.8% -7%
Gold production, Koz 45 41 +8%
Silver production, Moz 0.1 0.1 +86%
Birkachan Heap Leach
Ore stacked, Kt 45 - NA
Gold grade, g/t 1.0 - NA
Gold production, Koz 0.6 - NA
TOTAL PRODUCTION
Gold, Koz 45 41 +10%
Silver, Moz 0.1 0.1 +88%
Note: (1) Technological recovery, includes gold and silver
within work-in-progress inventory.
Following the completion of open-pit mining at Olcha and
Birkachan, the pre-stripping of the new pit at Burgali, 120 km from
the Kubaka mil, commenced in Q1.
Heap leach stacking started earlier than usual following the
commissioning of the new semi-mobile crushing unit supplied by
Metso.
SVETLOYE
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 0.7 0.7 -7%
Ore mined, Kt 390 346 +13%
PROCESSING
Ore stacked, Kt 282 308 -9%
Gold grade, g/t 4.8 4.4 +10%
Gold production, Koz 27 21 +26%
TOTAL PRODUCTION
Gold, Koz 27 21 +26%
At Svetloye, quarterly gold production was up 26% y-o-y to 27
Koz as higher grade attributable to work-in-progress release offset
lower stacking volumes and slower leach velocity caused by very
cold weather. Ore mining started in the new Lyudmila pit.
VORO
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 580 - NA
Ore mined, Kt 11 - NA
PROCESSING
CIP
Ore processed, Kt 260 269 -3%
Gold grade, g/t 2.2 2.2 +2%
Gold recovery1 83.9% 82.1% +2%
Gold production, Koz 20 18 +10%
Heap Leach
Ore stacked, Kt - - NA
Gold grade, g/t - - NA
Gold production, Koz 2 2 -14%
TOTAL PRODUCTION
Gold, Koz 22 20 +7%
Note: (1) Technological recovery, includes gold within
work-in-progress inventory.
Open-pit mining commenced at Pesherny, a satellite deposit 15 km
from Voro.
Oxidized ore from Saum has been introduced to the feed at the
CIP plant. The facility will continue to process mostly stockpiled
ore from Voro as mining was completed in 2020.
High commodity prices and low copper TCs prompted the management
to re-evaluate the option of direct-shipping high-grade ore from
Saum to third-party concentrators for tolling. The decision will be
taken in Q2 2021 and may lead to accelerated exploitation of that
deposit.
The construction of the new flotation plant is in full swing
with all concrete works completed and the steel framework
installed. The majority of main equipment has arrived on site.
NEZHDA
Mining and construction activities are progressing on schedule.
The processing plant is scheduled to achieve mechanical completion
on September 1, 2021 and produce first concentrate on November 1,
2021.
In Q1, the Company continued installation of main and auxiliary
equipment (rotary drum driers, press filters, conveyors, pumps,
electrical power equipment), process pipelines and utility systems.
Diesel gensets and coal-powered boiler-house have been
commissioned.
Project activities currently focus on wiring, process control
and instrumentation, and ventilation. More than 900 construction
contractors are currently on site in addition to approximately 500
Polymetal employees.
The construction of the power line by the independent investor
(UVES) linking the site to the grid is in full swing though it
progressed slower than expected in Q1 due to extremely cold
weather.
3 months ended Mar 31,
% change
2021 2020
MINING
Waste mined, Mt 5.3 - NA
Ore mined, Kt 346 - NA
POX-2
Construction has proceeded on schedule despite acute shortages
of general construction workforce in Russia and significant
difficulties in bringing expat representatives of equipment
manufacturers on site due to COVID-related cross-border travel
restrictions.
Foundation construction for high-pressure and CIL circuits is in
progress. Installation of metal frameworks for oxygen station and
downstream circuit is nearing completion. Construction of repair
shops and storage depots is ongoing. Construction of 100 kV power
substation commenced.
SUSTAINABILITY, HEALTH AND SAFETY
There were no fatal accidents during the first three months of
2021 either at Polymetal or at the Company's contractors. LTIFR
among the Group's employees for the period stood at 0.25, in
comparison with 0.07 during the first 3M 2020. There were seven
incidents among employees (two in Q1 2020) including six minor and
one severe incident, as well as one minor incident with a
contractor worker. There were three cases of falling, three cases
of a hit by an object (including a severe one at Albazino) and a
case of falling rock, mostly related to safety breach by employees.
The Company investigated each of the cases separately and held
safety briefings with employees.
Q1 was also marked with a couple of external recognitions which
confirms our success as a responsible company: inclusion in the
Sustainability Yearbook 2021 by S&P Global and the 46th place
in the 100 Most Sustainably Managed Companies worldwide ranking by
the Wall Street Journal (WSJ).
COVID-19 UPDATE
Russia Kazakhstan Group Change for the quarter
Since the start of the pandemic
Tests administered 56,351 23,653 80,004 + 31,804
C-19 positive tests 1,424 354 1,778 +327
Hospitalised 253 24 277 +70
Died 4 1 5 -
As of 20.04.2021
Active cases 10 5 15
In hospital 2 0 2
Headcount as at 01.04.2021 10,158 2,796 12,966
Epidemiological situation in the Company remains under control.
Operations and development projects are unaffected so far. There
were 15 active cases of COVID-19 as at 20 April 2021 across the
Group. All precautionary measures effective in 2020 will continue
into full year of 2021. The Company estimates COVID-related cash
expenses at approximately USUSD 5 million per month with the
majority recorded as operating costs. This translates into roughly
USUSD 35 per GE ounce in AISC.
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ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
Sequence No.: 100402
EQS News ID: 1187402
End of Announcement EQS News Service
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