Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Russian gold miner Petropavlovsk plc (LSE:POG) issued a revised guidance for 2012 ahead of the half year report it will submit in August, prompting the share price of one of Russia’s largest gold producer to jump as high as 12% in midday trading on the London Stock Exchange.
In a statement released earlier today, Petropavlovsk anticipates an increased production of an additional 20,000 ounces of gold to 700,000 oz. by the end of 2012, backed by the commissioning of two new processing lines ahead of schedule, as well as the “outstanding performance” of its flagship mine, Pioneer.
Bonanza Trading
Pending the production breakdown to be issued in July 2012, Petropavlovsk disclosed a 29% increase in gold production for the first five months of 2012, compared to the same period a year ago, compounded with the 15% increase in the average realised gold sales price and 12% increase in total gold sold during the said period.
Petropavlovsk said total gold sales reached 227,300 ounces, or 24,000 oz. higher than that during the first five months of 2011 at 203,300 oz.
Averaged realised gold sales price achieved by the company for the first five months of 2012 was US$1,652 per ounce, in contrast with the $1,438/oz. it received for the same period a year ago, Petropavlovsk stated.
The continued weakness of the Russian Rubble against the US Dollar also contributed to the improved cash cost of production, coupled with cost cutting programme being implemented in all of the Group’s mines.
“The Group does not currently expect an increase in 2012 cash costs for its hard-rock mines,” Petropavlovsk said, adding that its cost estimate is reduced to be only between 15%-20%, lower than the 30%-45% it set previously.
Furthermore, the company said its total capital expenditure budget for 2012 remains unchanged.
Operational Update
The company’s increased target production for the year is due in part of its flagship mine, Pioneer, which “confidently” exceeded “the proportion of its annual production target attributable to the first five months of the year”.
“Pioneer’s strong performance was due to better recoveries and higher grades than budgeted due to the inclusion of the high-grade areas discovered in 2011 into the 2012 mine plan.”
The company said the commissioning of the two new processing lines, earlier expected to commence in the third quarter of 2012, will increase Pioneer’s plant capacity by 40% and Albyn’s capacity by twice as much.
Petropavlovsk’s exploration programme continued to make “encouraging results” with grades from recovered samples ranging between 30-51 grams per tonne (g/t), in the Elginskoye licence area, 15 kilometres away from the Albyn mine.
High grade non-refractory mineralised zone was also discovered on a satellite deposit at the Pokrovskiy mine, bearing an average grade of 20 g/t and about 200,000 oz. of non-refractory gold at an average grade of 2 g/t within the Pioneer mine.
Petropavlovsk will host a visit of analysts and investors in the company’s production sites starting on 16th June 2012.
Company Spotlight
Petropavlovsk is one of the leading gold producers in Russia producing more than 630,000 oz. of gold in 2011 from its four gold mines, namely: Pioneer, Malomir, Pokrovskiy, and Albyn.
The company was established in 1994 and became public in 2002, trading on the London Stock Exchange. Shares gained 51.1 pence, or 12.4% of yesterday’s close, to £4.62 pence a share, minutes before trading closed in London.
