Polymetal International plc (POLY)
Polymetal: Q4 and full year 2020 production results
29-Jan-2021 / 10:00 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 29 January 2021 Polymetal International plc Q4 and full year 2020 production results
Polymetal reports strong production results for the fourth
quarter and twelve months ended December 31, 2020.
"2020 was a successful year for Polymetal despite the COVID
pandemic. We improved our safety performance and, crucially,
achieved zero fatalities. The Company beat production guidance,
enjoyed record free cash flow and continued to execute development
projects on schedule", said Vitaly Nesis, Group CEO of Polymetal.
"In 2021, we expect first ounces from Nezhda and will make every
effort to minimize the impact of the second wave of the pandemic on
our safety, production, and cash flows".
HIGHLIGHTS ? No fatal accidents among Group workforce or its
contractors occurred in 2020 (compared with two employee
fatalities
and one contractor fatality in 2019). Lost time injury frequency
rate (LTIFR) among the Group's employees decreased
by 37% year-on-year (y-o-y) to 0.12. ? In 2020, the Company
started to use the DIS metric (days lost due to work-related
injuries) as the main Health and
Safety KPI. For the full year, DIS amounted to 1,583 days, a 10%
decrease compared to 2019. Polymetal will also
continue to report its LTIFR going forward. ? The Company's
FY2020 gold equivalent ("GE") output amounted to 1,559 Koz, a 4%
increase y-o-y and 4% above the
original production guidance of 1.5 Moz. Strong contribution
from Kyzyl, Varvara and Albazino offset planned grade
declines at Svetloye and Voro. Q4 GE production was roughly
stable y-o-y and stood at 358 Koz. ? Revenue in 2020 jumped by 28%
to reach USUSD 2.9 billion while Q4 revenue was up 31% y-o-y to
USUSD 0.8 billion on the
back of higher gold sales and higher metal prices. The lag
between gold production and sales has been closed. ? The Company
expects full-year Total Cash Costs ("TCC") to be below the original
guidance of USUSD 650-700/GE oz.
Sharp devaluation of domestic currencies (RUR and KZT)
outweighed additional COVID-related costs and price-driven
increase in royalties. All-in Sustaining Cash Costs ("AISC") are
expected to be within the guidance range of USUSD
850-900/GE oz as the Company has accelerated pre-stripping and
mine fleet renewals against the backdrop of higher
commodity prices. ? Polymetal generated strong quarterly free
cash flow resulting in Net Debt reduction to USUSD 1.35 billion as
at the
end of 2020, Net Debt/EBITDA is expected to be below 1x. For the
full year, Net Debt decreased by USUSD 128 million
and the Company paid USUSD 480 million of dividends implying
record annual FCF. ? Construction and development activities at
Nezhda and POX-2 progressed on schedule despite significant
challenges
posed by COVID-related disruptions and slowdowns. At Nezhda,
processing plant building was completed and most of
the key equipment installed. Ore mining is ongoing. At POX-2,
the autoclave building framework, concentrate storage
facility and the majority of concrete work for
desorption/electrolysis building and oxygen station were completed.
? In 2020, the Board approved construction of the Voro flotation
plant (start-up in Q1 2023) and Kutyn heap leach
project, a part of Albazino operations (start-up in Q2 2023). ?
CAPEX for the full year is expected to amount to approximately 10%
higher than guidance at USUSD 590 million. The
increase is mostly related to:
? Accelerated spending across project portfolio in a bid to
neutralize the impact of the pandemic on project
schedules and
? Substantial increase in capitalized stripping aimed at
ensuring operational flexibility and production
stability against the backdrop of heightened epidemiological
risks.
2021 OUTLOOK ? The Company reiterates its current production
guidance of 1.5 Moz of GE for FY2021 and 1.6 Moz of GE for FY2022.
? TCC in 2021 is expected to be in the range of USUSD 700-750/GE
oz. The y-o-y TCC increase will be driven by:
? Rouble and Tenge appreciation compared to average 2020
levels.
? Increasing domestic diesel fuel price driven by higher Brent
oil prices.
? Above-CPI wage inflation in the mining industry.
? Full-year impact of COVID-related measures.
The guidance remains contingent on the Rouble/Dollar and
Tenge/Dollar exchange rates and Brent oil price. ? Capital
expenditures in 2021 are expected to be approximately USUSD 560
million. A USUSD 75 million increase compared
to the previous guidance is driven by:
? Limited availability and sharp increases in construction labor
costs. This factor is driven by COVID-related
travel restrictions with Central Asian countries, a traditional
source of the majority of construction
workforce.
? Sharp increases in domestic diesel fuel and steel prices.
? Higher EUR/USD exchange rate (imported processing and mining
equipment mainly sourced from the EU).
? Construction of on-site observatory facilities for personnel
at remote sites.
As a result, AISC in 2021 is expected to average USUSD
925-975/GE oz. The Company will continue to prioritize timely
project execution over cost optimization in its projects.
COVID-19 UPDATE ? There were 80 active cases of COVID-19 as at
25 January 2021 across the Group. We regret to report that five of
our
employees (four in 2020 and one in 2021) died of the disease or
its consequences. ? Epidemiological situation in the Company
remains under control. Operations and development projects are
unaffected
so far. ? Strict precautionary procedures which were previously
implemented including mandatory isolation of new arrivals and
restrictions on meetings and travel, are maintained at all
production sites and offices. These restrictions are
currently expected to continue into full year of 2021. ?
Polymetal is prepared to start vaccination of its employees and is
currently awaiting for the Russian Sputnik-V
vaccine to become broadly available. ? Polymetal continues to
provide varied financial and operational support to healthcare
facilities across all regions
of its presence with USUSD 3.4 million spent in 2020. The main
areas of assistance include purchasing PPE, medical
supplies, and specialized diagnostic equipment. ? The Company
estimates COVID-related cash expenses in 2021 at approximately
USUSD 5 million per month with the
majority recorded as operating costs. This translates into
approximately USUSD 35 per GE ounce in AISC.
COVID-19 STATISTICS AS OF 25.01.2021
Employees Russia Kazakhstan Group
Tests administered 31,679 16,521 48,200
C-19 positive tests 1,120 331 1,451
Active cases 48 32 80
Died 4 1 5
In hospital 1 1 2
Hospitalised since the start of the pandemic 187 20 207
Average headcount 9,432 2,633 12,065
OPERATING HIGHLIGHTS
3 months ended Dec 31, 12 months ended Dec 31,
% change1 % change1
2020 2019 2020 2019
Waste mined, Mt 44.0 39.8 +10% 166.8 158.6 +5%
Underground development, km 22.6 25.6 -12% 90.0 105.8 -15%
Ore mined, Mt 3.54 4.21 -16% 15.76 17.22 -8%
Open-pit 2.49 3.13 -20% 11.60 13.02 -11%
Underground 1.05 1.07 -2% 4.17 4.20 -1%
Ore processed, Mt 3.7 3.5 +3% 15.4 15.0 +3%
Average GE grade processed, g/t 3.9 4.0 -3% 3.9 3.8 +2%
Production
Gold, Koz 322 312 +3% 1,402 1,316 +6%
Silver, Moz 4.4 5.2 -16% 18.8 21.6 -13%
Gold equivalent, Koz2 358 355 +1% 1,559 1,496 +4%
Sales
Gold, Koz 386 374 +3% 1,392 1,366 +2%
Silver, Moz 5.2 5.7 -9% 19.3 22.1 -13%
Revenue, USUSDm3 846 643 +31% 2,865 2,245 +28%
Net debt, USUSDm4 1,351 1,610 -16% 1,351 1,479 -9%
Safety5
LTIFR (Employees) 0.16 0.18 -11% 0.12 0.19 -37%
DIS (Employees)6 1,583 1,760 -10%
Fatalities
Employees 0 0 NA 0 2 -100%
Contractors 0 1 -100%
Average headcount 12,065 11,611 +4%
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) Based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30
Septemeber 2020 (for the three months period) and 31 December 2019 (for the twelth months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
(6) DIS - days lost due to work-related injuries.
PRODUCTION BY MINE
3 months ended Dec 31, % 12 months ended Dec 31, %
2020 2019 change 2020 2019 change
GOLD EQ. (KOZ)1
Kyzyl 67 90 -25% 382 343 +11%
Albazino 56 30 +88% 261 241 +8%
Omolon 57 54 +6% 210 196 +7%
Dukat 48 47 +2% 199 206 -3%
Varvara 28 33 -14% 159 137 +16%
Mayskoye 61 52 +16% 139 129 +8%
Svetloye 28 27 +7% 120 134 -11%
Voro 12 22 -46% 89 106 -16%
TOTAL (continuing operations) 358 355 +1% 1,559 1,493 +4%
Kapan - - NA - 3 -100%
TOTAL (including
358 355 +1% 1,559 1,496 +4%
discontinued operations)
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 Friday, 29
January 2021 at 11:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 (0) 330 336 9411 (local access)
0800 279 7204 (toll free)
From the US:
+1 929 477 0324 (local access)
800 458 4121 (toll free)
From Russia:
+7 495 646 9190 (local access)
8 10 800 2867 5011 (toll free)
To participate from other countries, please dial any of the
local access numbers listed above.
Conference code: 3973919
To participate in the webcast follow the link:
https://www.webcast-eqs.com/polymetal20210129.
Please be prepared to introduce yourself to the moderator or
register.
A recording of the call will be available at +44 207 660 0134
(from the UK), +1 719 457 0820 (from the USA) and 8 10 800 2702
1012 (from Russia), access code 3973919, from 17:30 Moscow time
Friday, 29 January, till 17:30 Moscow time Friday, 5 February 2021.
Webcast replay will be available on Polymetal's website
(www.polymetalinternational.com) and at
https://www.webcast-eqs.com/polymetal20210129.
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 Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 19.7 17.6 +12% 77.7 67.5 +15%
Ore mined (open-pit), Kt 486 440 +10% 2,041 2,000 +2%
Gold grade, g/t 7.2 7.4 -2%
PROCESSING
Ore processed, Kt 488 510 -4% 2,004 2,000 +0%
Gold grade, g/t 7.8 7.6 +3% 7.9 7.1 +11%
Gold recovery 88.6% 88.0% +1% 88.0% 87.8% +0%
Concentrate produced, Kt 40 35 +16% 151 125 +21%
Concentrate gold grade, g/t 83.4 98.6 -15% 92.9 100.8 -8%
Gold in concentrate, Koz1 108 110 -2% 450 404 +11%
Concentrate shipped, Kt 16 14 +18% 84 68 +25%
Payable gold shipped, Koz 28 28 -1% 160 155 +3%
Veduga ore toll processed, Kt2 61 - NA 92 - NA
Amursk POX
Concentrate processed, Kt 10 16 -42% 53 52 +3%
Gold grade, g/t 136.8 134.1 +2% 142.6 128.1 +11%
Gold recovery 91.7% 91.4% +0% 92.0% 92.4% -0%
Gold produced, Koz 39 62 -37% 222 188 +18%
TOTAL PRODUCTION
Gold, Koz 67 90 -25% 382 343 +11%
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.
Kyzyl Q4 production was down 25% y-o-y to 67 Koz as the planned
shutdown at the Amursk POX delayed some of the ounces to 2021. The
Company expects continued grade normalization towards the reserve
average in 2021 as mining progresses to lower levels. Veduga ore
processing will be discontinued in Q1 2021.
Full-year production increased by 11% y-o-y to 382 Koz and
exceeded the budget on the back of higher grades, particularly in
1H 2020.
In 2021, the Company plans to implement a debottlenecking
project at the concentrator's thickening and drying sections by
installing an additional belt filter, drying drum and second
thickener, which will allow it to achieve 2.2 Mtpa throughput and
partially compensate for the expected grade decline.
Kyzyl Ore Reserves added 2.2 Moz to reach 10.3 Moz of gold
following an initial reserve estimate at East Bakyrcik in November.
Mining at East Bakyrchik is expected to commence in 2031.
ALBAZINO
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 4.8 4.5 +7% 19.9 21.2 -6%
Underground development, km 3.4 3.1 +11% 12.1 10.8 +12%
Ore mined, Kt 592 536 +10% 1,993 2,133 -7%
Open-pit 403 370 +9% 1,308 1,555 -16%
Underground 189 166 +14% 686 578 +19%
Gold grade, g/t 4.2 4.0 +5%
Open-pit 4.2 3.9 +7%
Underground 4.4 4.4 -1%
PROCESSING
Albazino concentrator
Ore processed, Kt 451 433 +4% 1,771 1,736 +2%
Gold grade, g/t 4.6 5.1 -9% 4.6 4.6 +1%
Gold recovery1 88.5% 88.4% +0% 87.2% 86.6% +1%
Concentrate produced, Kt 35 38 -7% 143 144 -1%
Concentrate gold grade, g/t 51.2 50.8 +1% 49.9 47.7 +5%
Gold in concentrate, Koz2 58 62 -6% 229 221 +4%
Amursk POX
Concentrate processed, Kt 32 24 +34% 159 159 -0%
Gold grade, g/t 53.9 55.5 -3% 52.0 51.2 +1%
Gold recovery 96.2% 96.5% -0% 96.4% 95.4% +1%
Gold produced, Koz 56 30 +88% 261 241 +8%
TOTAL PRODUCTION
Gold, Koz 56 30 +88% 261 241 +8%
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.
At Albazino, quarterly gold production jumped by 88% y-o-y to 56
Koz thanks to the low-base effect (concentrate processed at the
Amursk POX in Q4 2019). On the back of a strong Q4 performance,
full-year production was up 8% y-o-y to 261 Koz.
Open-pit mining was up for the quarter due to the start of
mining at the Farida open pit which is expected to last until
2023.
Underground development and ore mined increased as stoping
commenced at Ekaterina, and decline development started at
Anfisa.
Construction at Kutyn heap leach project started following the
receipt of statutory environmental permits (project approved by the
Board in October). Kutyn will be developed as a part of the
Albazino hub with first gold pour expected in Q2 2023. Incremental
production from Kutyn will compensate for the Company's decision
not to double the capacity of the underground mine at Olga given
challenging geotechnical conditions.
In order to decarbonize electricity and reduce cash costs
Polymetal has launched a Feasibility Study and is evaluating
financing options for the construction of a grid power line to the
Albazino production site. The conceptual schedule assumes the link
to the power grid in 2H 2023.
MAYSKOYE
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.5 1.4 -61% 2.9 5.4 -46%
Underground development, km 5.3 5.0 +5% 21.1 20.5 +3%
Ore mined, Kt 184 175 +5% 1,039 813 +28%
Open-pit - 3 -100% 278 178 +56%
Underground 184 172 +7% 761 635 +20%
Gold grade, g/t 6.6 6.1 +7%
Open-pit 8.0 7.0 +14%
Underground 6.1 5.9 +3%
PROCESSING
Ore processed, Kt 229 220 +4% 912 878 +4%
Gold grade, g/t 6.1 5.8 +6% 6.6 6.1 +8%
Gold recovery 91.6% 90.3% +2% 83.6% 82.1% +2%
Gold in concentrate, Koz2 41 37 +12% 145 132 +10%
Payable gold in concentrate shipped to off-takers, Koz 49 44 +10% 123 114 +8%
Amursk POX
Concentrate processed, Kt 3 - NA 3 - NA
Gold grade, g/t 57.3 - NA 57.3 - NA
Gold recovery 96.5% - NA 96.5% - NA
Gold produced in dore from concentrate 4 - NA 4 - NA
Gold produced in dore from carbon, Koz3 8 8 +2% 11 14 -22%
TOTAL PRODUCTION
Gold, Koz 61 52 +16% 139 129 +8%
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.
At Mayskoye, gold production for the quarter grew by 16% y-o-y
to reach 61 Koz. The increase was driven by higher grade
attributable to lower dilution and increased recoveries.
The Company continued stripping at Zone 1 where the next
pushback was approved. First oxide ore is expected in Q1 2021 with
processing to commence in Q2 2021.
In 2020, Polymetal started development of two projects at
Mayskoye aimed at operating cost and carbon footprint reduction. In
August, the Company and SMT Scharf AG signed a Memorandum of
Understanding to cooperate in underground electric vehicle (EV)
development. During the 2021 navigation period, two electric
underground LHDs and two electric trucks are planned to be
delivered to the site. In Q4, underground development for electric
ore conveyor commenced, the start-up of the project is scheduled
for 2022.
In order to reduce surface disposal of waste the Company will
use waste as backfill at the Mayskoye underground. In 2020, basic
engineering was completed. The project is expected to commence in
2023.
AMURSK POX
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
Concentrate processed, Kt 45 41 +10% 215 211 +2%
Albazino 28 20 +42% 147 142 +4%
Kyzyl 10 16 -42% 53 52 +3%
Veduga 4 4 -2% 7 13 -46%
Mayskoye 3 0 NA 3 0 NA
Other1 - - NA 4 4 +17%
Gold recovery 94.3% 93.3% +1% 94.3% 94.1% +0%
Average gold grade, g/t 71.8 87.2 -18% 74.6 70.1 +6%
Average sulphur grade 15.6% 17.0% -8% 14.4% 13.4% +7%
Total gold produced2, Koz 100 92 +8% 487 430 +13%
Albazino 46 30 +57% 222 208 +7%
Kyzyl 39 62 -37% 222 188 +18%
Veduga 10 - NA 29 28 +1%
Mayskoye 4 - NA 4 - NA
Other1 - - NA 10 5 +112%
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 Q4 gold output increased by 4% y-o-y to 127 Koz due
to higher production from Albazino concentrate and better
recoveries stemming from lower volumes of Kyzyl concentrate with
higher carbon content, and the application of certain adjustments
to the flowsheet (slurry conditioning).
The facility successfully underwent a regular 2-week maintenance
shutdown in early October.
In 2021, Polymetal plans to build a hot cure section at the POX
resulting in expected recovery increase of approximately 1
percentage point. OMOLON OPERATIONS
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.6 1.8 -67% 3.4 7.0 -52%
Underground development, Km 3.1 3.0 +1% 13.1 12.9 +2%
Ore mined, Kt 353 790 -55% 2,525 2,973 -15%
Open-pit 206 673 -69% 2,034 2,522 -19%
Underground 147 117 +26% 491 451 +9%
Grade
Gold, g/t 3.4 3.0 +11%
Silver, g/t 13.2 17.7 -25%
PROCESSING
Kubaka Mill
Ore processed, Kt 215 222 -3% 863 834 +3%
Grade
Gold, g/t 7.6 6.5 +17% 7.1 6.4 +10%
Silver, g/t 29 108 -73% 24 95 -75%
Recovery1
Gold 96.2% 95.2% +1% 94.5% 95.5% -1%
Silver 67.1% 77.3% -13% 71.8% 79.0% -9%
Gold production, Koz 49 45 +8% 181 164 +10%
Silver production, Moz 0.1 0.7 -81% 0.5 2.1 -78%
Birkachan Heap Leach
Ore stacked, Kt 199 - NA 1,318 897 +47%
Gold grade, g/t 1.6 - NA 2.0 1.2 +66%
Gold production, Koz 7 3 +132% 25 14 +81%
TOTAL PRODUCTION
Gold, Koz 56 48 +16% 206 178 +16%
Silver, Moz 0.1 0.7 -79% 0.5 2.1 -75%
Note: (1) Technological recovery, includes gold and silver
within work-in-progress inventory.
At Omolon, Q4 as well as the full year, saw y-o-y increases in
gold production and a decrease in silver production as Kubaka mill
processed gold-rich ore from Birkachan underground and Yolochka
through the CIP circuit as opposed to Sopka ore with higher silver
content though the Merrill-Crowe circuit in 2019. Heap leach output
also positively contributed to the total production as the stacking
season was extended into Q4.
Open-pit mining declined as Olcha and Birkachan pits were
completed in Q4, and the mining fleet has been moved to Burgali
where mining is expected to start in Q1 2021. Underground mining
increased on the back of Birkachan underground planned capacity
extension. Ore from Olcha, with higher grades yet higher per unit
costs, will be trucked by winter road to Kubaka and will make a
significant share of processing in 2021.
In line with its climate strategy Polymetal started construction
of a solar plant at Omolon. In 2020, the Company completed and
approved project design documentation and prepared a construction
site. Engineering documentation is completed. The start-up is
planned for 2021.
The construction of a dry tailings storage facility at Omolon is
in progress. In 2020, the Company completed construction of the
filtration building. The launch of the DSF is expected by the end
of 2021.
DUKAT OPERATIONS
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Underground development, km 10.9 14.5 -25% 43.6 59.5 -27%
Ore mined, Kt 530 620 -15% 2,228 2,515 -11%
Grade
Gold, g/t 0.2 0.6 -71%
Silver, g/t 242 278 -13%
PROCESSING
Omsukchan concentrator
Ore processed, Kt 499 523 -5% 2,001 2,058 -3%
Grade
Gold, g/t 0.6 0.4 +33% 0.5 0.5 +7%
Silver, g/t 245 266 -8% 266 285 -7%
Recovery1
Gold 85.3% 83.8% +2% 84.9% 85.6% -1%
Silver 85.6% 84.6% +1% 86.4% 86.3% +0%
Production
Gold, Koz 8 6 +32% 29 27 +5%
Silver, Moz 3.2 3.7 -12% 14.4 15.8 -9%
Lunnoye plant
Ore processed, Kt 118 113 +4% 466 461 +1%
Grade
Gold, g/t 1.5 1.4 +12% 1.4 1.4 +3%
Silver, g/t 278 251 +11% 273 256 +6%
Recovery1
Gold 90.8% 83.9% +8% 90.4% 86.7% +4%
Silver 93.1% 92.9% +0% 92.6% 91.8% +1%
Production
Gold, Koz 5 4 +29% 19 18 +8%
Silver, Moz 1.0 0.8 +20% 3.7 3.5 +7%
TOTAL PRODUCTION
Gold, Koz 13 10 +30% 48 45 +6%
Silver, Moz 4.2 4.5 -6% 18.2 19.3 -6%
Notes: (1) Technological recovery, includes gold and silver
within work-in-progress inventory.
At Dukat, the planned decline in silver grade at the Omsukchan
concentrator drove the silver production decrease of 6% in both Q4
and full year 2020. Gold production recorded a 30% y-o-y increase
in Q4 driven by higher gold grades in ore at Omsukchan and lower
dilution achieved at Lunnoye.
Underground development volumes declined following the
decommissioning of the Goltsovoye underground mine.
Start of development at Primorskoye is expected to partially
offset the decrease in grade and provide a meaningful new source of
high-grade silver ore for the operation.
VARVARA
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 10.3 11.2 -8% 40.6 45.4 -10%
Ore mined, Kt 603 991 -39% 2,812 3,943 -29%
Gold grade, g/t 1.4 1.3 +8%
PROCESSING
Leaching
Ore processed, Kt 753 723 +4% 3,056 2,991 +2%
Gold grade, g/t 1.4 1.4 +1% 1.4 1.5 -2%
Gold recovery1 87.4% 86.6% +1% 87.9% 86.8% +1%
Gold production (in dore), Koz 22 27 -17% 121 123 -2%
Flotation
Ore processed, Kt 167 148 +13% 660 559 +18%
Gold grade, g/t 2.6 2.3 +15% 2.9 1.5 +95%
Recovery1 83.5% 77.8% +7% 86.6% 69.5% +25%
Gold in concentrate, Koz 6 6 +1% 38 13 +184%
Veduga ore toll processed, Kt2 - 14 -100% 30 113 -73%
Total ore processed, Kt 920 885 +4% 3,745 3,663 +2%
TOTAL PRODUCTION
Gold, Koz 28 33 -14% 159 137 +16%
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 Q4, Varvara recorded a 14% y-o-y decline in production as
material work-in-progress was accumulated at both circuits to be
released in 2021.
Grades at the flotation plant were up y-o-y throughout the
entire reporting year driven by larger volumes of high-grade
third-party ore through the flotation circuit. Recoveries were also
better due to flow sheet improvements.
SVETLOYE
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.7 0.3 +126% 3.0 1.4 +111%
Ore mined, Kt 434 300 +44% 1,888 1,573 +20%
Gold grade, g/t 2.7 3.8 -30%
PROCESSING
Ore stacked, Kt 282 333 -15% 1,303 1,301 +0%
Gold grade, g/t 3.7 3.2 +18% 3.9 3.8 +4%
Gold production, Koz 28 27 +7% 119 134 -11%
TOTAL PRODUCTION
Gold, Koz 28 27 +7% 119 134 -11%
At Svetloye, quarterly gold production increased by 7% y-o-y to
28 Koz on the back of higher grade in ore sta?ked in the period,
albeit stacking was down due to the planned maintenance shutdown.
Waste and ore mined were higher throughout the year driven by Emmy
pit development.
VORO
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt - 163 -100% - 1,343 -100%
Ore mined, Kt 136 285 -52% 375 946 -60%
Gold grade
Primary, g/t 2.2 3.2 -33%
Oxidised, g/t - 1.6 NA
PROCESSING
Voro CIP
Ore processed, Kt 257 267 -4% 1,043 1,050 -1%
Gold grade, g/t 2.3 2.9 -20% 2.2 3.5 -37%
Gold recovery1 82.9% 85.4% -3% 82.7% 86.3% -4%
Gold production, Koz 11 20 -46% 74 91 -19%
Voro Heap Leach
Ore stacked, Kt - 29 -100% 22 87 -75%
Gold grade, g/t - 1.1 -100% 0.9 1.3 -30%
Gold production, Koz 1 2 -44% 15 15 +3%
TOTAL PRODUCTION
Gold, Koz 12 22 -46% 89 106 -16%
Note: (1) Technological recovery, includes gold within
work-in-progress inventory.
At Voro, open-pit mining was completed in January 2020 and the
CIP plant turned to processing lower-grade stockpiles, which
resulted in production decline for Q4 and the full year. In
November, processing of high-grade ore from Saum, a satellite
deposit, commenced at the plant. Heap leach facility processed the
remaining part of the oxidised ore earlier in the year.
In November, the Company completed the initial Ore Reserve
estimate for the Pesherny deposit of 0.4 Moz of gold at 6.0 g/t.
First oxide ore will be mined in 2021 for processing at Voro CIP
plant. Refractory material representing 90% of the reserves will be
processed at the Voro flotation plant (under construction) to
produce 55 Koz of gold on average in 2023-2027.
Construction of the Voro flotation proceeds on schedule, and
concentrator and administrative building foundation works have been
completed. Metal frameworks construction for the concentrator
building is in progress.
DEVELOPMENT UPDATE
At Nezhda, mining and construction activities progressed on
schedule, with the start-up targeted for October 2021. As of the
end of the year, the plant's building was completed, SAG, ball
mills, flotation and gravity equipment installed. The new boiler
house was commissioned with permanent heating established in all
buildings including the concentrator. ROM ore crusher and crushed
ore reclaim feeders installed.
The construction of the power line linking the site to the grid
is in full swing.
3 months ended Dec 31, 12 months ended Dec 31,
% change % change
2020 2019 2020 2019
MINING
Waste mined, Mt 5.3 - NA 10.0 - NA
Ore mined, Kt 211 - NA 411 - NA
Gold grade, g/t 3.0 - NA
POX-2 development proceeds on schedule. POX building metal
framework have been completed, and the heating circuit is being
finalised. Foundations for desorption/electrolysis circuits as well
as the oxygen station have been completed; metal structures
construction is underway. Detailed engineering is 95% finalised by
Hatch and 50% by Polymetal. Design and engineering documentation on
the key infrastructure facilities is completed. Concentrate storage
facility construction is finalised. Administrative building
construction is nearing completion. Construction of repair shops
and storage depots is in progress.
SUSTAINABILITY, HEALTH AND SAFETY
In 2020, there were no fatal accidents within Polymetal and the
Company's contractors in comparison with two employee fatalities
and one contractor fatality in 2019. LTIFR for employees decreased
by 37%, with 11 out of 13 injuries classified as minor. There were
four cases where an employee was hit by an object (one of which
resulted in a severe injury for the truck loader), five cases of
tripping and falling, two involving transportation vehicles, one
caused by jamming by a rotating mechanism and one caused by a
falling rock.
Despite a decrease over 2019, road accidents remained among the
dominant risks. To address road safety Polymetal applied a
driver-vehicle-environment approach to develop a detailed road
safety programme consisting of 37 control and mitigation measures.
These included training, health and fatigue monitoring, upgrading
safety equipment, route optimisation, regular road safety
inspections and improving work and rest conditions. The Company
improved controls over other risks as well, applying smart
technologies where possible, such as a mine and plant worker
positioning system, devices warning about electric voltage and
collision avoidance systems. In 2020, we piloted a project to
digitalise our shift-by-shift risk assessment model at Dukat mine,
enabling employees to report concerns via a mobile app.
In 2021, Polymetal plans to enhance its safety risk management
systems at our development and exploration projects, where
additional risks are related to staff transportation and
accommodation at remote sites.
In line with the Company's constant efforts to increase
disclosure transparency and efficiency, starting in 2021, we are
going to introduce "Scope 3" approach in our safety reporting. This
means that we will report accidents among our contractors outside
of the Company's production sites but related to our activities.
Safety KPIs will continue to include only accidents occurred at our
sites.
Polymetal remains committed to its climate change targets: ? 7%
of total electricity generation from renewable sources by 2025. ?
Decrease in GHG emission intensity by at least 5% by 2023 (vs
2018). ? Develop climate change scenarios in 2021 (on 2030 time
horizon).
In order to achieve these goals the Company implements a
portfolio of projects in the following areas: ? Decarbonizing
electricity (replacing diesel with renewable energy or electric
grid, i.e. solar plants at Omolon and
Svetloye, wind power plant at Svetloye, grid connection at
Nezhda and Albazino). ? Decarbonizing transport (use of
battery-electric vehicles and low carbon transport technologies,
i.e. EVs at
Varvara, Mayskoye, electric ore conveyer at Mayskoye). ?
Upgrading to energy-efficient technologies (LEDs, energy storage,
etc).
In 2020, as a part of our carbon transition strategy we have
adopted Green Financing Framework and raised a USUSD 125 million
Green Loan with Societe Generale to finance the transition. Our
total green and sustainability-linked loan portfolio now reaches
USUSD 270 million or 16% of the total outstanding debt.
In Q4, following the 2020 Corporate Sustainability Assessment by
S&P, Polymetal was added to the Dow Jones Sustainability Index
World for the first time and retained its place in DJSI Emerging
Markets.
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ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
Sequence No.: 92527
EQS News ID: 1164257
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
(END) Dow Jones Newswires
January 29, 2021 02:01 ET (07:01 GMT)
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