TIDMPOLY
RNS Number : 7994V
Polymetal International PLC
26 July 2018
Release time IMMEDIATE
Date 26 July 2018
Polymetal International plc
Q2 2018 production results
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 second quarter and six months ended June 30, 2018.
HIGHLIGHTS
-- Polymetal produced 324 Koz of gold equivalent (GE) in the
second quarter of 2018, up 16% year-on-year. Volumes at Svetloye
and Amursk POX combined with improved grades at Omolon drove the
strong performance. Gold production for the quarter was 232 Koz, up
22% year-on-year. Silver production grew by 2% to 6.8 Moz
year-on-year.
-- GE production for the first six months of 2018 was 619 Koz,
an 11% increase year-on-year and fully in line with guidance.
Stronger production in the 2H will be driven by traditional
seasonal concentrate de-stockpiling at Mayskoye, as well as first
contributions from the recently launched Kyzyl operation.
-- Kyzyl produced first concentrate in June, one month ahead of
schedule. The operation is expected to ramp up to full throughput
capacity (150 Kt per month) and reach design recoveries (86%) by
October 2018. The company plans to produce 80 Koz of payable gold
at Kyzyl this year.
-- Gold sales for the quarter increased by 17%, which largely
offset a 7% decline in silver sales as the Company generated a
total of US$ 435 million in revenues, up 13% compared to previous
year.
-- During the quarter the Company generated significant free
cash flow. Net debt increased by approximately US$ 75 million as
the company paid US$ 129 million of final dividends for FY2017 (US$
0.30 per share). As in prior years, we expect significantly
stronger free cash flow generation in the second half of the year
on the back of higher production volumes and seasonal working
capital drawdowns.
-- Polymetal is pleased to report that no fatalities occurred in
the quarter. The Group's LTIFR improved to 0.17 versus 0.19 in Q2
2017. As part of a continuous effort improve across health and
safety metrics, in Q2 we have implemented two new standards - voice
reporting of near-misses to improve communication underground, and
an incident recording system to improve the efficiency of
preventive measures.
-- The Company remains on track to meet its FY 2018 production
guidance of 1.55 Moz of gold equivalent at TCC of US$ 650-700/GE oz
and AISC of US$ 875-925/GE oz. Due to the seasonality of revenues,
both TCC and AISC are expected to be at the higher end of the
guidance range for the first half of the year. The cost guidance
remains contingent on the Rouble/Dollar exchange rate dynamic that
has a significant effect on the Group's Rouble-denominated
operating costs. Polymetal will announce its half-yearly financial
results on 22 August 2018.
"Another strong quarter puts us into a very comfortable position
vis-a-vis our guidance for 2018", said Vitaly Nesis, Group CEO of
Polymetal, commenting on the results. "With Kyzyl launched ahead of
schedule, the focus is now on its smooth ramp-up and the completion
of the POX debottlenecking project."
3 months ended Jun 30, % change(1) 6 months ended Jun 30, % change(1)
------------------------- ------------------ ------------------------- -----------------
2018 2017 2018 2017
------------ ----------- ------------------ ------------ ----------- -----------------
Waste mined, Mt 32.1 29.5 +9% 60.9 55.1 +11%
Underground development,
km 31.5 28.9 +9% 64.4 53.8 +20%
Ore mined, Kt 3,352 3,277 +2% 6,541 6,590 -1%
Open-pit 2,156 2,198 -2% 4,191 4,402 -5%
Underground 1,196 1,079 +11% 2,350 2,189 +7%
Ore processed, Kt 3,905 3,443 +13% 6,967 6,286 +11%
Production
Gold, Koz 232 190 +22% 446 389 +15%
Silver, Moz 6.8 6.6 +2% 12.7 12.8 -0%
Copper, Kt 0.9 0.5 +72% 1.6 1.0 +66%
Zinc, Kt 1.6 1.2 +32% 3.0 2.3 +30%
Gold equivalent,
Koz(2) 324 278 +17% 619 558 +11%
Sales
Gold, Koz 239 203 +17% 445 380 +17%
Silver, Moz 7.3 7.8 -7% 12.1 12.4 -3%
Copper, Kt 1.4 0.5 +204% 2.3 0.5 +331%
Zinc, Kt 1.2 1.7 -30% 1.5 2.2 -35%
Revenue, US$m(3) 435 385 +13% 789 683 +16%
Net debt, US$m(4) 1,653 1,578 +5% 1,653 1,421 +16%
Safety(5)
LTIFR 0.17 0.19 -11% 0.16 0.15 +7%
Fatalities 0 1 -100% 1 1 0%
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 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
(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 March 2018 (for the three months period) and 31 December 2017 (for the
six months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
(6) NA = not available, NM - not material
PRODUCTION BY MINE
3 months % 6 months %
ended Jun 30, change(1) ended Jun 30, change(1)
----------------- ----------- ----------------- -----------
2018 2017 2018 2017
-------- ------- ----------- -------- ------- -----------
GOLD EQ. (KOZ)(1)
Dukat 76 79 -4% 155 158 -2%
Albazino-Amursk 63 40 +58% 153 108 +41%
Omolon 54 43 +27% 86 93 -8%
Mayskoye - 4 -100% - 9 -100%
Varvara 31 27 +18% 66 55 +19%
Voro 28 33 -13% 54 58 -7%
Svetloye 45 26 +69% 53 26 +101%
Okhotsk 12 12 -3% 25 24 +5%
Kapan 15 14 +1% 27 25 +8%
------------------- -------- ------- ----------- -------- ------- -----------
TOTAL 324 278 +17% 619 558 +11%
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Thursday,
26 July 2018 at 10:00 London time (12:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 95582454# (free from Russia), or
0808 238 9671 (free from the UK), or
+1 646 722 4913 (free from the US), or
follow the link: http://polymetal260718-live.audio-webcast.com.
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://polymetal260718-live.audio-webcast.com. 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 418779146#, from
12:30 Moscow time Thursday, 26 July, till 12:30 Moscow time
Thursday, 2 August, 2018.
Enquiries
Media Investor Relations
------------------ ----------------------------------------------------
FTI Consulting +44 20 3727 1000 Polymetal ir@polymetalinternational.com
Leonid Fink Eugenia Onuschenko +44 20 7016 9505 (UK)
Viktor Pomichal Maryana Nesis
Michael Vasiliev +7 812 334 3666 (Russia)
------------------ ------------------ -------------------- ------------------------------
Joint Corporate Brokers
-------------------------------------- ----------------------------------------------------
Morgan Stanley
Andrew Foster
Richard Brown +44 20 7425 8000
Panmure Gordon RBC Europe Limited
Adam James Tristan Lovegrove
James Stearns +44 20 7886 2500 Marcus Jackson +44 20 7653 4000
------------------ ------------------ -------------------- ------------------------------
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", "INTS", "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
DUKAT OPERATIONS
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Dukat
Underground development, m 9,066 8,201 +11% 17,783 16,213 +10%
Ore mined (underground), Kt 420 418 +1% 825 817 +1%
Goltsovoye
Underground development, m 1,864 1,877 -1% 3,687 3,264 +13%
Ore mined (underground), Kt 48 47 +2% 93 92 +1%
Lunnoye
Underground development, m 2,299 2,154 +7% 4,487 3,802 +18%
Ore mined (underground), Kt 147 142 +4% 280 286 -2%
Perevalnoye
Underground development, m 907 755 +20% 1,780 1,257 +42%
Ore mined (underground), Kt - - NA 2 - NA
Nachalny-2
Waste mined, Kt - 75 -100% - 75 -100%
Ore mined (open pit), Kt - 16 -100% - 16 -100%
Terem
Underground development, m 847 458 +85% 1,694 458 +270%
Ore mined (underground), Kt 11 5 +126% 20 5 +306%
TOTAL HUB
Waste mined, Kt - 75 -100% - 75 -100%
Underground development, m 14,983 13,445 +11% 29,431 24,994 +18%
Ore mined, Kt 626 627 -0% 1,221 1,215 +1%
Open-pit - 16 -100% - 16 -100%
Underground 626 611 +2% 1,221 1,199 +2%
PROCESSING
Dukat
Ore processed, Kt 513 491 +4% 996 967 +3%
Grade
Gold, g/t 0.5 0.4 +18% 0.5 0.4 +20%
Silver, g/t 291 310 -6% 302 319 -5%
Recovery(1)
Gold 87.0% 87.3% -0% 86.6% 85.4% +1%
Silver 88.2% 89.1% -1% 88.0% 88.3% -0%
Production
Gold, Koz 7.1 6.2 +14% 14.3 11.7 +22%
Silver, Moz 4.1 4.3 -5% 8.4 8.6 -3%
Lunnoye
Ore processed, Kt 114 116 -1% 227 228 -0%
Grade
Gold, g/t 1.2 1.2 -5% 1.2 1.3 -3%
Silver, g/t 323 346 -7% 340 364 -6%
Recovery(1)
Gold 85.4% 90.2% -5% 85.3% 91.0% -6%
Silver 90.2% 92.0% -2% 91.0% 92.2% -1%
Production
Gold, Koz 3.6 4.2 -14% 7.6 8.5 -11%
Silver, Moz 1.1 1.2 -8% 2.2 2.4 -7%
TOTAL PRODUCTION
Gold, Koz 10.7 10.4 +3% 21.9 20.2 +8%
Silver, Moz 5.2 5.5 -5% 10.6 11.0 -4%
Note: (1) Technological recovery, includes gold and silver
within work-in-progress inventory (concentrate, precipitate)
Dukat underground development and processing volumes at the
Omsukchan concentrator both hit record levels as the operation is
trying to offset grade declines and the narrowing of the average
vein width.
Q2 gold production at Dukat increased by 3% year-on-year as the
concentrator processed ore from gold-rich veins at the deeper
levels of Dukat. Silver production decreased by 5% over 2017 due to
planned grade declines.
Underground development at the Perevalnoye and Terem satellite
deposits is making significant progress as both ore sources are
expected to deliver significant contributions to the feed at the
Omsukchan concentrator during the year. Stoping at Perevalnoye is
expected to ramp up by Q3.
At Lunnoye, mill throughput volumes remained flat, while both
gold and silver production decreased year-on-year by 14% and 8%,
respectively. This comes on the back of lower grades following the
depletion of high-grade areas of Zone 7.
ALBAZINO-AMURSK
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------- ---------- ---------
MINING
Waste mined, Kt 5,389 4,988 +8% 10,490 9,388 +12%
Underground development, m 2,336 1,898 +23% 4,696 3,485 +35%
Ore mined, Kt 478 509 -6% 930 992 -6%
Open-pit 370 424 -13% 715 830 -14%
Underground 108 85 +26% 216 161 +34%
PROCESSING
Albazino concentrator
Ore processed, Kt 441 439 +1% 860 856 +1%
Gold grade, g/t 4.8 4.8 +0% 5.0 4.8 +6%
Gold recovery(1) 85.0% 87.9% -3% 85.8% 87.1% -2%
Concentrate produced, Kt 35.0 36.1 -3% 68.9 71.5 -4%
Concentrate gold grade, g/t 51.7 51.6 +0% 54.4 50.1 +8%
Gold in concentrate, Koz(2) 58.1 60.0 -3% 120.3 115.1 +5%
Amursk POX
Concentrate processed, Kt 32.2 23.1 +39% 82.2 66.2 +24%
Albazino 27.2 20.0 +36% 71.1 60.2 +18%
Third-party 5.0 3.1 +60% 11.1 6.0 +85%
Gold grade, g/t 59.3 59.9 -1% 58.1 55.4 +5%
Gold recovery 96.7% 96.0% +1% 97.1% 96.1% +1%
Gold produced, Koz 63.0 39.8 +58% 152.8 108.1 +41%
TOTAL PRODUCTION
Gold, Koz 63.0 39.8 +58% 152.8 108.1 +41%
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 completion of downstream
processing at the Amursk POX
At Albazino, ore mining started at the new Ekaterina open pit.
The processing of partially oxidized near-surface material has
negatively impacted recoveries, a situation expected to be reversed
by the end of the year.
Underground mine productivity and grades continued to improve on
the back of a full transition to partially cemented waste backfill
in primary stopes.
At Amursk POX, the scheduled 6-week maintenance shutdown was
successfully completed in May with the installation of all new
pipes and valves required for the debottlenecking project.
Year-on-year production increased by 58% as 2017 performance was
impacted by a longer autoclave re-line shutdown.
The debottlenecking project is on schedule. The new section to
crush, mill and store lime and limestone has been commissioned. The
focus now shifts to commissioning the new oxygen plant and
installing sulphur filters and the acidic thickener. Polymetal
plans to ramp up the debottlenecked POX plant in Q4 of 2018, with
additional feed comprising Kyzyl and 3(rd) -party concentrates.
OMOLON OPERATIONS
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Sopka
Waste mined, Kt 1,645 1,903 -14% 2,677 2,330 +15%
Ore mined (open pit), Kt 5 64 -92% 298 64 +367%
Tsokol
Underground development, m 796 992 -20% 1,663 1,897 -12%
Ore mined (underground), Kt 38 26 +47% 76 61 +25%
Birkachan
Underground development, m 1,192 1,202 -1% 2,396 2,348 +2%
Ore mined (underground), Kt 32 28 +15% 60 54 +10%
Oroch
Waste mined, Kt - - NA - 109 -100%
Ore mined (open pit), Kt - - NA - 81 -100%
Olcha
Waste mined, Kt - - NA - 184 -100%
Underground development, m 1,181 820 +44% 2,282 1,326 +72%
Ore mined, Kt 22 - NA 48 73 -34%
Open pit - - NA - 73 -100%
Underground 22 - NA 48 - NA
TOTAL HUB
Waste mined, Kt 1,645 1,903 -14% 2,677 2,622 +2%
Underground development, m 3,169 3,014 +5% 6,341 5,571 +14%
Ore mined, Kt 97 117 -17% 482 333 +45%
Open-pit 5 64 -92% 298 218 +37%
Underground 92 54 +72% 184 115 +59%
PROCESSING
Birkachan Heap Leach
Ore stacked, Kt 472 121 +289% 472 121 +289%
Gold grade, g/t 1.1 1.3 -15% 1.1 1.3 -15%
Gold production, Koz 1.0 - NA 1.0 - NA
Kubaka Mill
Ore processed, Kt 216 214 +1% 422 429 -2%
Grade
Gold, g/t 5.2 5.3 -1% 5.0 6.3 -20%
Silver, g/t 171 134 +27% 102 78 +31%
Recovery(1)
Gold 95.7% 94.0% +2% 95.4% 93.8% +2%
Silver 88.2% 82.3% +6% 81.7% 81.8% 0%
Gold production, Koz 39.7 35.3 +12% 70.1 84.3 -17%
Silver production, Moz 1.1 0.6 +79% 1.2 0.7 +60%
TOTAL PRODUCTION
Gold, Koz 40.7 35.3 +15% 71.1 84.3 -16%
Silver, Moz 1.1 0.6 +79% 1.2 0.7 +60%
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory
In Q2, gold production at Omolon was up 15% year-on-year with
silver production jumping 79%. Higher grades and better
metallurgical properties of Sopka ore drove improved recoveries and
lower work-in-progress requirements.
Underground mines performed strongly with a continued shift
towards underground ore mining, particularly in terms of metals
contained.
The Birkachan heap leach operation recommenced in Q2 with
stacking volumes positively impacted by the introduction of
screening operation ahead of the crusher. The circuit is expected
to deliver meaningful production in 2H.
MAYSKOYE
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------- ---------- ---------
MINING
Waste mined, Kt 1,377 1,554 -11% 1,950 2,571 -24%
Underground development, m 6,038 4,996 +21% 12,136 9,604 +26%
Ore mined, Kt 285 284 +0% 463 538 -14%
Open-pit 110 120 -8% 132 143 -8%
Underground 174 164 +6% 331 395 -16%
PROCESSING
Flotation
Ore processed, Kt 213 157 +36% 416 363 +15%
Sulphide ore 66 145 -54% 269 351 -23%
Oxide ore 147 12 +1164% 147 12 +1164%
Gold grade, g/t 8.3 5.6 +49% 6.7 5.9 +13%
Sulphide ore 5.7 5.2 +10% 5.2 5.8 -10%
Oxide ore 9.5 9.9 -4% 9.5 9.9 -4%
Gold recovery 71.4% 88.6% -17% 77.5% 78.4% -1%
Sulphide ore 87.5% 88.6% +1% 87.9% 87.7% +2%
Oxide ore 67.1% 53.5% +14% 67.1% 53.5% +14%
Concentrate produced, Kt 16.2 11.5 +40% 33.4 30.1 +11%
Concentrate gold grade, g/t 50.4 59.8 -16% 51.3 60.2 -15%
Gold in concentrate, Koz(2) 26.2 22.2 +18% 55.0 58.2 -6%
Gold in carbon, Koz(3) 12.1 8.0 +51% 12.1 8.0 +51%
Amursk POX
Concentrate processed, Kt - 1.0 -100% - 5.2 -100%
Gold grade, g/t - 55.9 -100% - 50.0 -100%
Gold recovery - 96.3% -100% - 96.1% -100%
Gold produced, Koz - 3.8 -100% - 9.0 -100%
TOTAL PRODUCTION
Gold, Koz 0.0 3.8 -100% 0.0 9.0 -100%
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 internal
downstream processing to saleable metal product
(3) Work in progress. For information only; not considered as
gold produced and therefore not reflected in the table representing
total production
Underground development at Mayskoye continued to increase as the
new mine level (100m below surface) is expected to enter stoping in
Q1 2019.
Oxide ore processing through the combined float-leach circuit
has demonstrated broadly positive results. Recoveries are in line
with metallurgical test work and, given very high grades of oxide
material, gold production for the year is expected to jump
significantly.
This year most of Mayskoye concentrate will be sold to Chinese
off-takers as in-house POX capacity is taken up by higher-grade
third-party material. Accordingly, production at Mayskoye will be
booked in the second half of the year once the stockpiled
concentrate is shipped to off-takers and loaded carbon is stripped
at the Amursk POX.
VARVARA
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------- ---------- --------- ------------- ---------- ---------
MINING
Varvara
Waste mined, Kt 1,652 2,982 -45% 3,256 6,659 -51%
Ore mined, Kt 180 376 -52% 349 878 -60%
Komarovskoye
Waste mined, Kt 5,899 2,956 +100% 11,444 5,260 +118%
Ore mined, Kt 531 466 +14% 1,037 900 +15%
PROCESSING
Flotation
Ore processed, Kt 104 32 +226% 180 89 +103%
Grade
Gold, g/t 1.4 3.1 -57% 1.3 2.4 -46%
Copper 0.51% 0.70% -26% 0.53% 0.61% -13%
Recovery(1)
Gold 71.8% 69.4% +2% 67.7% 65.0% +2%
Copper 92.6% 87.2% +5% 91.5% 80.7% +11%
Production
Gold (in concentrate), Koz 2.6 1.7 +52% 4.2 3.3 +27%
Copper (in concentrate), Kt 0.5 0.2 +161% 0.9 0.4 +11%
Toll-treated ore processed, Kt(2) 32 52 -39% 43 63 -31%
Leaching
Ore processed, Kt 723 671 +8% 1,498 1,409 +6%
Gold grade, g/t 1.3 1.1 +15% 1.4 1.3 +12%
Gold recovery(1) 87.5% 79.7% +10% 86.9% 81.1% +7%
Gold production (in dore), Koz 26.3 24.0 +10% 57.5 50.0 +15%
Total ore processed, Kt 858 755 +14% 1,721 1,560 +10%
TOTAL PRODUCTION
Gold, Koz 28.9 25.7 +12% 61.7 53.3 +16%
Copper, Kt 0.5 0.2 +161% 0.9 0.4 +112%
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.
In Q2, Varvara delivered a 12% increase in gold production
year-on-year. Continued increases in Komar ore railing capacity
drove higher processing volumes and improved head grades at the
leaching circuit. Gold recovery rates in the leaching circuit also
improved thanks to the detailed geo-metallurgical mapping of Komar
ore followed by the introduction of flexible reagent additions.
Open pit mining volumes continued to shift away from Varvara
towards Komar following high-margin ore tonnes.
Varvara continued to toll-treat third-party refractory gold ore.
The produced gold concentrate is processed at the Amursk POX
facility. Gold production from this material is booked following
dore production from concentrate at Amursk.
VORO
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Voro
Waste mined, Kt 850 2,539 -67% 1,921 5,057 -62%
Ore mined, Kt 272 402 -32% 575 822 -30%
PROCESSING
Voro Heap Leach
Ore stacked, Kt 2 180 -99% 2 180 -99%
Gold grade, g/t 1.5 1.3 +18% 1.5 1.3 +18%
Gold production, Koz 2.1 3.2 -34% 3.7 5.8 -36%
Voro CIP
Ore processed, Kt 252 252 +0% 498 498 +0%
Gold grade, g/t 4.2 4.9 -15% 4.0 4.3 -5%
Gold recovery(1) 81.1% 82.6% -2% 80.8% 81.8% -1%
Gold production, Koz 26.2 29.3 -10% 50.8 52.6 -4%
TOTAL PRODUCTION
Gold, Koz 28.3 32.5 -13% 54.5 58.4 -7%
Note: (1) Technological recovery, includes gold within work-in-progress inventory
Q2 gold production at Voro decreased by 13% year-on-year,
largely driven by lower ore grades.
Mining volumes declined sharply as expected given that the open
pit is nearing closure next year. Exploration drilling has
identified substantial high-quality mineralization below the open
pit. Technical studies are currently under way to determine the
feasibility of underground mining.
The heap leach plant shifted to residual leaching, whereby
previously leached ore is re-crushed and re-agglomerated to enable
recoveries from previously impermeable material.
SVETLOYE
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Svetloye
Waste mined, Kt 122 66 +85% 224 255 -12%
Ore mined (open pit), Kt 335 331 +1% 661 595 +11%
PROCESSING
Svetloye Heap Leach
Ore stacked, Kt 434 370 +17% 653 466 +40%
Gold grade, g/t 3.8 4.7 -18% 3.8 4.5 -15%
Gold production, Koz 44.7 26.4 +69% 53.0 26.4 +101%
TOTAL PRODUCTION
Gold, Koz 44.7 26.4 +69% 53.0 26.4 +101%
In Q2 Svetloye delivered a robust 69% year-on-year production
increase.
Higher stacking volumes and continued leaching of material
placed on pads last year more than offset grade declines.
Successful step-out drilling at the Emy pit and positive
metallurgical test work for the material from the nearby
Levoberezhny property indicate potential to extend the life-of-mine
of Svetloye by approximately 4 years to 2028.
OKHOTSK OPERATIONS
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Avlayakan
Underground development, m 756 1,223 -38% 2,108 2,467 -15%
Ore mined (underground), Kt 42 29 +44% 88 68 +30%
Khotorchan
Waste mined, Kt 251 - NA 254 - NA
Ore mined (open pit), Kt 28 - NA 28 - NA
PROCESSING
Khakanja
Ore processed, Kt 159 153 +3% 312 307 +2%
Grade
Gold, g/t 1.8 1.7 +7% 1.8 1.5 +17%
Silver, g/t 87 99 -12% 87 99 -13%
Recovery(1)
Gold 97.4% 96.2% +1% 97.2% 96.5% +1%
Silver 72.6% 73.7% -1% 72.1% 73.8% -2%
Gold production, Koz 8.0 7.8 +2% 16.6 14.8 +12%
Silver production, Moz 0.3 0.4 -13% 0.6 0.7 -7%
TOTAL PRODUCTION
Gold, Koz 8.0 7.8 +2% 16.6 14.8 +12%
Silver, Moz 0.3 0.4 -13% 0.6 0.7 -7%
Note: (1) Technological recovery, includes gold and silver
within work-in-progress inventory (precipitate)
At Okhotsk, production was largely flat. Sea transportation of
ore from Avlayakan commenced on time setting the stage for
improvement in grades in Q3.
A new small-scale satellite open-pit mine, Khotorchan, entered
production. The operation is expected to be completed in Q4 2018
with ore trucked by winter road to the Khakanja mill in Q1
2019.
KAPAN
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Kapan
Underground development, m 4,268 4,355 -2% 9,684 7,723 +25%
Ore mined (underground), Kt 154 135 +14% 311 250 +24%
PROCESSING
Ore processed, Kt 158 132 +20% 312 246 +27%
Grade
Gold, g/t 2.0 2.6 -23% 1.9 2.4 -19%
Silver, g/t 34 45 -25% 33 44 -24%
Copper, % 0.32% 0.32% +2% 0.31% 0.30% +6%
Zinc, % 1.48% 1.31% +13% 1.40% 1.32% +6%
Recovery
Gold 84.7% 86.3% -2% 83.4% 85.0% -2%
Silver 85.2% 84.9% +0% 83.6% 84.1% -1%
Copper 95.8% 91.6% +5% 95.2% 91.3% +4%
Zinc 86.7% 90.8% -4% 87.1% 89.7% -3%
TOTAL PRODUCTION
Gold, Koz 7.7 8.6 -10% 14.2 14.4 -1%
Silver, Moz 0.1 0.1 -9% 0.2 0.2 -5%
Copper, Kt 0.4 0.3 +24% 0.8 0.6 +34%
Zinc, Kt 1.6 1.2 +32% 3.0 2.3 +30%
Gold production for Q2 decreased slightly year-on-year as the
upper levels of the mine with high-grade stopes were temporarily
unavailable due to the official enquiry of the fatal incident on
March 2.
Ore mined volumes continued to grow, reflecting the positive
results of ongoing improvement measures to debottleneck the
underground mine, especially as mine personnel completed a full
transition from manual to mechanized drilling. The processing
volumes grew in line with mining.
Gold grades declined year-on-year as manual shrinkage with
minimal dilution was completely phased out due to health and safety
concerns.
KYZYL
3 months ended Jun 30, % change 6 months ended Jun 30, % change
------------------------- --------- ------------------------- ---------
2018 2017 2018 2017
------------ ----------- --------- ------------ ----------- ---------
MINING
Waste mined, Kt 14,888 12,479 +19% 28,683 23,178 +24%
Ore mined (open-pit), Kt 323 - NA 397 - NA
PROCESSING
Ore processed, Kt 74 - NA 74 - NA
Gold grade, g/t 2.5 - NA 2.5 - NA
Gold recovery 42% - NA 42% - NA
Concentrate produced, Kt 1.3 - NA 1.3 - NA
Concentrate gold grade, g/t 46.5 - NA 46.5 - NA
Gold in concentrate, Koz(1) 2.0 - NA 2.0 - NA
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 sale to
off-taker or internal downstream processing to saleable metal
product
The Kyzyl processing plant was started up on 17 June 2018, one
month ahead of schedule, with the first 1.3 Kt of concentrate
produced during the month from the lower-grade material.
The 3-month ramp up period so far has been progressing according
to plan. Grade reconciliation is in line with the reserve model.
The recoveries are being improved continuously, with the current
average run-rate of 72% achieved in July to date.
OTHER DEVELOPMENTS
Nezhda - the Company decided to exercise its call option to
acquire the remaining 75.3% stake in the gold property, which will
bring its effective stake to 100% once completed. The total
consideration for the call option exercise will amount to US$ 144
million, payable in Polymetal shares. The transaction is expected
to be completed by the end of 2018 after the receipt of all
required regulatory approvals. A detailed development plan for the
asset will be presented after the completion of a Feasibility Study
in Q4 2018.
Prognoz - the Company has brought its effective ownership in the
silver asset to 100% via 2 separate transactions for a total of US$
212 million paid in Polymetal shares. An updated JORC-compliant
resource estimate is expected in Q4 2018.
HEALTH AND SAFETY
Polymetal had no fatalities in the quarter, with a Group Lost
Time Injury Frequency Rate ("LTIFR") of 0.17 versus 0.19 in Q2
2017.
All our Russian and Kazakh operations maintained their OHSAS
18001 accreditation following external audits, with Kyzyl and Komar
re-certified during Q2 2018. An audit of Kapan is scheduled for the
next quarter.
Safety remains a top priority for Polymetal and the Company
reaffirms its commitment to further improving across health and
safety metrics to achieve our zero--harm target. Details of the
implemented safety and employee welfare initiatives are set out in
the Sustainability Report, which can be found on our website.
Polymetal continues to invest in digital technologies and
innovative practices to achieve greater levels of safety,
efficiency, and productivity. In the reporting period, we have
implemented two new standards - voice reporting of near-misses to
improve communication underground, and an incident recording system
to improve the efficiency of preventive measures.
PERSONNEL
Yerbol Rakhimov (51) was appointed as Managing Director of
Mayskoye. Yerbol replaced Yevgeny Tsybin (41) who assumed the
position of Technical Director in Polymetal's Magadan office. Mr
Rakhimov was born in Kazakhstan in 1967 and in 1991 graduated from
the Kazakh Polytechnic Institute with a degree in mining
engineering. From 1991 until 2011 he held various positions with
Kazzinc, first as an underground mine surveyor and all the way up
to chief engineer and mine manager. In 2011, Mr. Rakhimov joined
Polymetal as chief engineer of the Dukat underground mine, a
position he held until 2015. In 2015, he was appointed chief
engineer of the Dukat operations.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLKELFLVDFEBBZ
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July 26, 2018 02:01 ET (06:01 GMT)
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