Polymetal International plc (POLY)
Polymetal: Q2 2019 production results
24-Jul-2019 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 24 July 2019
Polymetal International plc
Q2 2019 production results
Polymetal reports strong production for the second quarter and the six
months ended June 30, 2019.
"Excellent results from Kyzyl drove our production growth while other
operations delivered strong performances", said Vitaly Nesis, Group CEO of
Polymetal."
HIGHLIGHTS
? The Company's Q2 gold equivalent ("GE") production grew 19% year-on-year
to 384 Koz as Kyzyl delivered at full capacity with 81 Koz of gold
produced in the quarter. GE production from continuing operations was up
29% year-on-year.
? Q2 gold production was up 30% over the previous year at 302 Koz. Silver
production was down 11% at 6.0 Moz on the back of asset disposals.
? GE production for H1 2019 was 756 Koz, up 22% year-on-year. We expect
stronger production in 2H driven by seasonal concentrate de-stockpiling at
Mayskoye.
? Revenue for Q2 increased 13% year-on-year to US$ 492 million, with gold
sales rising 31% on strong production. Silver sales fell 22% due to a
temporary logistical lag between production and sales to be eliminated in
H2.
? The Company is well positioned to meet its full-year 2019 production
guidance of 1.55 Moz of GE and reiterates its cost guidance: TCC of US$
600-650/ GE oz and AISC of US$ 800-850/ GE oz1.
? Polymetal generated significant free cash flow in Q2. Net debt remained
unchanged during the quarter at US$ 1,700 million as of 30 June 2019,
while the Company paid US$ 146 million of final dividends for FY 2018 (US$
0.31 per share). As in previous 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 drawdown.
? We are saddened to report a fatal accident that occurred on 10 May 2019.
A pump station operator died at Omolon. The Company's risk management
activities increasingly focus on behavioral and cultural issues
underpinning unsafe labor practices. We remain committed to our strategic
objective of zero fatalities.
? At Nezhda, mining activities focused on constructing pit access roads.
Construction proceeded according to schedule with the concentrator
building comfortably on track for full winterization by the time the cold
season starts in November. The project is expected to start up in Q4 2021.
? At POX-2, detailed engineering of the facility is in full swing. All
long-lead equipment has been contracted. Site preparation activities
including deforestation and topsoil removal are in progress. The project
is on track for launch in H2 2023.
Note: (1) The cost guidance remains contingent on the Russian rouble and
Kazakh tenge exchange rate dynamics, which has a significant effect on the
Group's operating costs.
3 months ended % 6 months ended %
June 30, change1 June 30, change1
2019 2018 2019 2018
Waste 40.0 32.1 +25% 77.6 60.9 +27%
mined, Mt
Underground 26.1 31.8 -18% 54.3 64.4 -16%
development
, km
Ore mined, 4.3 3.4 +30% 8.6 6.5 +31%
Mt
Open-pit 3.3 2.2 +53% 6.5 4.2 +55%
Underground 1.0 1.2 -13% 2.1 2.4 -12%
Ore 4.1 3.7 +11% 7.6 7.0 +8%
processed,
Mt
Production
Gold, Koz 302 232 +30% 602 446 +35%
Silver, Moz 6.0 6.8 -11% 11.0 12.7 -14%
Copper, Kt 0.6 0.9 -38% 1.4 1.6 -13%
Gold 384 324 +19% 756 619 +22%
equivalent,
Koz2
Sales
Gold, Koz 314 239 +31% 604 445 +36%
Silver, Moz 5.6 7.3 -22% 10.3 12.1 -15%
Copper, Kt 0.7 1.2 -44% 1.0 1.5 -30%
Revenue, 492 435 +13% 946 789 +20%
US$m3
Net debt, 1,700 1,704 -0% 1,700 1,518 +12%
US$m4
Safety5
LTIFR 0.22 0.17 +29% 0.23 0.16 +44%
Fatalities 1 0 +1 2 1 +1
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, 2:1 Pb/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 2019 (for the three months period) and 31
December 2018 (for the six months period).
(5) LTIFR = lost time injury frequency rate per 200,000
hours worked.
PRODUCTION BY MINE
3 months % 6 months %
ended June 30, change ended June 30, change
2019 2018 2019 2018
GOLD EQ. (KOZ)1
Kyzyl 81 - NA 159 - NA
Dukat 82 76 9% 158 155 2%
Albazino-Amursk 55 63 -13% 136 153 -11%
Omolon 46 54 -16% 99 86 15%
Mayskoye - - NA 5 - NA
Varvara 39 31 24% 76 66 16%
Voro 29 28 3% 57 54 4%
Svetloye 52 45 16% 61 53 15%
TOTAL 384 297 +29% 751 568 +32%
(continuing
operations)
Okhotsk - 12 -100% - 24 -100%
Kapan - 15 -100% 5 27 -82%
TOTAL 384 324 +19% 756 619 +22%
(including
discontinued
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au
conversion ratios.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, 24 July 2019
at 12:00 London time (14:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 34668237# (free from Russia), or
+44 203 009 24 80 (free from the UK), or
+1 646 722 49 14 (free from the US), or
follow the link: https://webcasts.eqs.com/polymetal20190724 [1]. Please be
prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website
(www.polymetalinternational.com [2]) and at
https://webcasts.eqs.com/polymetal20190724 [1]. 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 418860357#, from 14:30 Moscow time Wednesday, 24 July,
till 14:30 Moscow time Wednesday, 31 July, 2019.
Enquiries
Media Investor Relations
FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000
Eugenia +44 20 7887 1476 (UK)
Leonid Fink Onuschenk
o
Viktor
Pomichal Timofey
Kulakov
+7 812 334 3666 (Russia)
Joint Corporate Brokers
Morgan +44 20 7425 RBC +44 20 7653 4000
Stanley 8000 Europe
Limited
Andrew
Foster Marcus
Jackson
Richard
Brown Jamil
Miah
Panmure
Gordon +44 20 7886
2500
Charles
Lesser
James
Stearns
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
KYZYL
3 months ended % 6 months ended %
June 30, change June 30, change
2019 2018 2019 2018
MINING
Waste mined, 16.5 14.9 +11% 32.3 28.7 +13%
Mt
Ore mined 511 323 +58% 1,033 397 +160%
(open-pit),
Kt
PROCESSING
Ore 512 74 NM 988 74 NM
processed,
Kt
Gold grade, 6.6 2.5 +159% 6.7 2.5 +164%
g/t
Gold 87.8% 41.7% +111% 87.3% 41.7% +110%
recovery
Concentrate 28.5 1.3 NM 58.3 1.3 NM
produced, Kt
Concentrate 104.2 46.5 +124% 100.0 46.5 +115%
gold grade,
g/t
Gold in 95.5 2.0 NM 187.4 2.0 NM
concentrate,
Koz1
Concentrate 17.3 - NA 36.9 - NA
shipped, Kt
Payable gold 40.4 - NA 91.2 - NA
shipped, Koz
Amursk POX
Concentrate 12 - NA 20 - NA
processed,
Kt
Gold grade, 128.9 - NA 124.7 - NA
g/t
Gold 93.4% - NA 93.8% - NA
recovery
Gold 40.9 - NA 68.3 - NA
produced,
Koz
TOTAL
PRODUCTION
Gold, Koz 81.4 - NA 159.5 - 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 shipment to off-taker or dore
production at Amursk POX.
Kyzyl continued to outperform in Q2. The operation continued to benefit from
high-grade softer ore and exceeded design specifications on throughput,
grade and production. Half-year gold production came in at 159.5 Koz of gold
with 187.4 Koz of gold produced in concentrate.
The average concentrate recovery rate increased to 87.8% despite low mass
pulls achieved to improve transportation economics and attractiveness of
concentrate for Chinese off-takers. Share of gold in low-carbon concentrate
processed at the Amursk POX exceeded 50%.
The processing plant is now running at a rate of 2 Mt per annum - above its
nameplate capacity of 1.8 Mtpa. Recent performance tests demonstrate that
further improvement in throughput can be achieved with US$ 3 million
investment in hydrocyclones and concentrate filtering area.
Open-pit mining continued at a stable pace. A detailed technical study is
under way to re-optimize the open pit under updated operational and economic
assumptions with the results, including the updated Ore Reserves estimate,
to be presented in Q4 2019.
DUKAT OPERATIONS
3 months ended % 6 months ended %
June 30, chang June 30, chang
e e
2019 2018 2019 2018
MINING
Underground 14.9 15.2 -2% 30.0 29.4 +2%
development,
km
Ore mined, 649 626 +4% 1,252 1,221 +3%
Kt
PROCESSING
Omsukchan
concentrator
Ore 516 513 +1% 1,029 996 +3%
processed,
Kt
Grade
Gold, g/t 0.5 0.5 -1% 0.5 0.5 +0%
Silver, g/t 306 291 +5% 295 302 -2%
Recovery1
Gold 85.3% 87.0% -2% 85.7% 86.6% -1%
Silver 86.6% 88.2% -2% 86.9% 88.0% -1%
Production
Gold, Koz 7.0 7.1 -1% 14.4 14.3 +1%
Silver, Moz 4.3 4.1 +5% 8.3 8.4 -1%
Lunnoye
plant
Ore 117 114 +2% 232 227 +2%
processed,
Kt
Grade
Gold, g/t 1.3 1.2 +13% 1.4 1.2 +14%
Silver, g/t 264 323 -18% 266 340 -22%
Recovery1
Gold 85.1% 85.4% -0% 85.7% 85.3% +0%
Silver 90.1% 90.2% -0% 90.1% 91.0% -1%
Production
Gold, Koz 4.4 3.6 +22% 9.1 7.6 +20%
Silver, Moz 0.9 1.1 -15% 1.8 2.2 -19%
TOTAL
PRODUCTION
Gold, Koz 11.4 10.7 +7% 23.6 21.9 +8%
Silver, Moz 5.3 5.2 +1% 10.1 10.6 -5%
Notes: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
The Dukat hub demonstrated a stable performance in Q2 with silver output up
1% year-on-year to 5.3 Moz. Silver grades at the Omsukchan concentrator
increased by 5% as it processed high-grade ore from the Terem satellite
underground mine. Stronger performance at Omsukchan has compensated for a
planned decrease in grade at the Lunnoye plant.
Gold output increased 7% year-on-year to 11.4 Koz, driven mainly by increase
in gold grade at Lunnoye.
Underground development declined by 2% as Goltsovoye approaches the end of
its reserves with mining focused on pillar removal.
ALBAZINO
3 months ended % 6 months ended %
June 30, chang June 30, chang
e e
2019 2018 2019 2018
MINING
Albazino
Waste mined, 5.6 5.4 +3% 11.1 10.5 +6%
Mt
Underground 2.6 2.3 +10% 4.9 4.7 +4%
development,
Km
Ore mined, 545 478 +14% 1,026 930 +10%
Kt
Open-pit 404 370 +9% 766 715 +7%
Underground 141 108 +31% 259 216 +20%
PROCESSING
Albazino
concentrator
Ore 431 441 -2% 856 860 -1%
processed,
Kt
Gold grade, 4.0 4.8 -18% 4.2 5.0 -17%
g/t
Gold 86.9% 85.0% +2% 85.2% 85.8% -1%
recovery1
Concentrate 33.7 35.0 -4% 69.3 68.9 +1%
produced, Kt
Concentrate 44.1 51.7 -15% 44.3 54.4 -19%
gold grade,
g/t
Gold in 47.7 58.1 -18% 98.6 120.3 -18%
concentrate,
Koz2
Amursk POX
Concentrate 38 32 +17% 91 82 +10%
processed,
Kt
Gold 55.1 63.0 -13% 136.4 152.8 -11%
produced,
Koz
TOTAL
PRODUCTION
Gold, Koz 55.1 63.0 -13% 136.4 152.8 -11%
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, gold in concentrate production decreased by 18% to 47.7 Koz
driven by continued processing of a lower grade ore from the Ekaterina-1
open pit. This, in turn, impacted total gold output which fell 13%
year-on-year to 55.1 Koz. Grade decline was partially compensated by an
increase in recoveries from 83.7% in Q1 to 86.9% in Q2.
Underground mine productivity continued to improve with ore mined up 14%
year-on-year as underground development at the Ekaterina-2 underground mine
continues according to plan. Ekaterina-2 should become the main source of
higher-grade ore starting from H2 2020.
AMURSK POX
3 months ended % 6 months ended %
June 30, chang June 30, chang
e e
2019 2018 2019 2018
Concentrate 50 32 +55% 111 82 +34%
processed,
Kt
Albazino 36 27 +32% 81 71 +14%
Kyzyl 12 - NA 20 - NA
Other1 2 5 -66% 10 11 -14%
Gold 93.4% 96.7% -3% 94.3% 97.1% -3%
recovery
Average gold 67.7 59.3 +14% 63.7 58.1 +10%
grade, g/t
Average 12.6% 8.8% +43% 12.6% 8.4% +50%
sulphur
grade
Total gold 96.0 63.0 +52% 204.7 152.8 +34%
produced2,
Koz
Albazino 49.5 50.6 -2% 116.0 130.5 -11%
Kyzyl 40.9 - NA 68.3 - NA
Other1 5.6 12.3 -55% 20.4 22.4 -9%
Notes: (1) Veduga and purchased concentrates which are included in
reportable production in the Albazino segment
(2) For information only. Already accounted for in production at operating
mines.
Quarterly gold production at the Amursk POX increased 52% to 96 Koz on the
back of the increased volume of concentrate processed and Kyzyl-driven
higher average concentrate grade.
The introduction of large quantities of Kyzyl concentrate to the feed
significantly changed operating parameters and led to a temporary decline in
recoveries by 3 percentage points from 96.7% to 93.4%. Over the last two
months, the POX team successfully introduced new operating procedures that
resulted in recoveries climbing back up over 95%. The changes focus on
tighter control of feed variability.
The Amursk POX underwent a planned 15-day shutdown, the first one since the
launch of the debottlenecked facility in November. No material issues have
been identified.
OMOLON OPERATIONS
3 months ended % 6 months ended %
June 30, change June 30, change
2019 2018 2019 2018
MINING
Waste mined, 1.9 1.6 +13% 3.2 2,.7 +20%
Mt
Underground 3.3 3.2 +5% 6.5 6.3 +3%
development,
Km
Ore mined, 730 97 +650% 1,378 482 +186%
Kt
Open-pit 625 5 NM 1,159 298 +289%
Underground 105 92 +13% 220 184 +19%
PROCESSING
Birkachan
Heap Leach
Ore stacked, 493 472 +4% 546 472 +16%
Kt
Gold grade, 1.2 1.1 +6% 1.2 1.1 +6%
g/t
Gold 2.1 1.0 +101% 2.1 1.0 +101%
production,
Koz
Kubaka Mill
Ore 208 216 -4% 428 422 +1%
processed,
Kt
Grade
Gold, g/t 5.0 5.2 -4% 6.5 5.0 +30%
Silver, g/t 125 171 -27% 72 102 -29%
Recovery1
Gold 97.1% 95.7% +1% 95.5% 95.4% +0%
Silver 88.8% 88.2% +1% 79.1% 81.7% -3%
Gold 34.9 39.7 -12% 86.4 70.1 +23%
production,
Koz
Silver 0.7 1.1 -37% 0.8 1.2 -31%
production,
Moz
TOTAL
PRODUCTION
Gold, Koz 37.0 40.7 -9% 88.4 71.1 +24%
Silver, Moz 0.7 1.1 -37% 0.8 1.2 -31%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
In Q2, gold and silver production decreased by 9% and 37% respectively on
the back of lower grades at Kubaka Mill which processed ore from Sopka
low-grade stockpiles. H1 gold output increased 24% year-on-year as
higher-grade ore from Olcha was introduced to the feed in Q1.
At Birkachan, open-pit mining rate achieved 500 Kt per in Q2, while heap
leach operation has doubled production on the back of higher stacking
volumes and higher gold grade.
Open-pit mining at Sopka is completed. The mining fleet has re-located to a
new satellite deposit, Yolochka (80 km from the Kubaka mill), where mining
commenced and will continue for 12 months.
MAYSKOYE
3 months ended % 6 months ended %
June 30, chang June 30, chang
e e
2019 2018 2019 2018
MINING
Waste mined, 1.4 1.4 +3% 2.6 1.9 +33%
Mt
Underground 5.3 6.0 -12% 10.8 12.1 -11%
development,
km
Ore mined, 220 285 -23% 438 463 -5%
Kt
Open-pit 70 110 -36% 134 132 +2%
Underground 150 174 -14% 305 331 -8%
PROCESSING
Ore 207 213 -3% 426 416 +2%
processed,
Kt
Gold grade, 6.6 8.3 -21% 6.1 6.7 -9%
g/t
Gold 69.9% 71.4% -2% 76.5% 77.5% -1%
recovery
Gold in 25.2 26.2 -4% 58.6 55.0 +7%
concentrate,
Koz2
Gold - - NA - - NA
produced in
dore from
concentrate
(POX), Koz
Gold - - NA 4.6 - +100%
produced in
dore from
carbon, Koz3
Payable gold - - NA - - NA
in
concentrate
shipped to
offtakers,
Koz
TOTAL
PRODUCTION
Gold, Koz - - NA 4.6 - 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
At Mayskoye, gold in concentrate decreased by 4% year-on-year to 25.2 Koz on
the back of lower processing volumes and reduced grades in ore from the
open-pit as the processing plant at Mayskoye switched over to the seasonal
treatment of oxide feed.
The management selected conveyor ore haulage for the long-term upgrade of
the underground mine materials handling system. The key considerations in
the decision included lower capital intensity, lower execution risk and
greater flexibility (compared with the conventional shaft). Total investment
in the project is estimated at approximately US$45m in 2020-2022. The
project is expected to yield US$150/oz cost savings in diesel fuel,
electricity and maintenance as well as to reduce operation's carbon
footprint. The expected IRR is 45%.
In parallel, Polymetal selected Paterson & Cooke, a UK engineering firm, to
evaluate options regarding conversion from conventional tailings to cemented
paste backfill. Potential benefits include lower dilution in flat-dipping
ore bodies and the reduction of surface waste disposal. Detailed study
results are expected in Q4 2019.
VARVARA
3 months ended % 6 months ended June %
June 30, chang 30, chan
e ge
2019 2018 2019 2018
MINING
Waste 11.6 7.6 +53% 22.7 14.7 +55%
mined, Mt
Ore mined, 977 711 +38% 1,938 1,386 +40%
Kt
PROCESSING
Flotation
Ore 130 104 +25% 277 180 +54%
processed,
Kt
Grade
Gold, g/t 1.1 1.4 -20% 1.1 1.3 -13%
Copper 0.52% 0.51% +1% 0.55% 0.53% +3%
Recovery1
Gold 51.1% 71.8% -29% 60.3% 67.7% -11%
Copper 90.8% 92.6% -2% 91.4% 91.5% -0%
Production
Gold (in 1.9 2.6 -27% 4.5 4.2 +8%
concentrate
), Koz
Copper (in 0.6 0.5 +16% 1.3 0.9 +48%
concentrate
), Kt
Veduga ore 31 32 -3% 63 43 +46%
toll
processed,
Kt2
Leaching
Ore 784 723 +8% 1,535 1,498 +3%
processed,
Kt
Gold grade, 1.4 1.3 +8% 1.4 1.4 +2%
g/t
Gold 87.7% 87.5% +0% 86.5% 86.9% -0%
recovery1
Gold 34.1 26.3 +30% 65.5 57.5 +14%
production
(in dore),
Koz
Total ore 945 858 +10% 1,875 1,721 +9%
processed,
Kt
TOTAL
PRODUCTION
Gold, Koz 35.9 28.9 +25% 69.9 61.7 +13%
Copper, Kt 0.6 0.5 +16% 1.3 0.9 +48%
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 solid gold production increase of 25% to 35.9
Koz. The jump was driven by increases in throughput, gold grade and recovery
at the leaching circuit, all benefiting from higher Komar ore tonnage.
Flotation circuit production declined as it did not process high-grade
3rd-party material available in 2018.
Varvara continued to toll-treat high-grade ore from Veduga and plans to
process more than 100 Kt in 2019.
VORO
3 months ended % 6 months ended %
June 30, change June 30, chang
e
2019 2018 2019 2018
MINING
Waste 0.4 0.9 -58% 0.8 1,.9 -59%
mined, Mt
Ore mined, 210 272 -23% 479 575 -17%
Kt
PROCESSING
Voro Heap
Leach
Ore - 1.8 -100% - 1.8 -100%
stacked, Kt
Gold grade, - 1.5 -100% - 1.5 -100%
g/t
Gold 6.4 2.1 +202% 11.1 3.7 +201%
production,
Koz
Voro CIP
Ore 270 252 +7% 519 498 +4%
processed,
Kt
Gold grade, 3.5 4.2 -16% 3.5 4.0 -14%
g/t
Gold 85.7% 81.1% +6% 86.3% 80.8% +7%
recovery1
Gold 22.6 26.2 -14% 44.9 50.8 -11%
production,
Koz
TOTAL
PRODUCTION
Gold, Koz 29.0 28.3 +2% 56.0 54.5 +3%
Note: (1) Technological recovery, includes gold within work-in-progress
inventory
Q2 gold production at Voro increased 2% year-on-year to 29.0 Koz driven by
seasonal contributions from the residual heap leach operation. Higher gold
recoveries partially offset a planned decline in grade at the CIP plant.
Ore mined volume continued to decrease as the open pit nears the end of its
life in Q3 2019. Exploration drilling identified substantial mineralisation
below the open pit with technical studies currently under way to determine
the feasibility of underground mining.
SVETLOYE
3 months ended % 6 months ended %
June 30, change June 30, chang
e
2019 2018 2019 2018
MINING
Waste 0.4 0.1 +222% 0.8 0.2 +251%
mined, Mt
Ore mined 453 335 +35% 867 661 +31%
(open pit),
Kt
PROCESSING
Ore 414 434 -4% 598 653 -8%
stacked, Kt
Gold grade, 3.5 3.8 -7% 4.0 3.8 +4%
g/t
Gold 51.8 44.7 +16% 61.0 53.0 +15%
production,
Koz
TOTAL
PRODUCTION
Gold, Koz 51.8 44.7 +16% 61.0 53.0 +15%
At Svetloye, gold production increased 16% to 51.8 Koz as the operation has
achieved the third full year of operation. However, rainy weather in Q2
impacted the pace of stacking and availability of high-grade material.
DEVELOPMENT UPDATE
At Nezhda, mining and construction activities proceeded according to plan.
Pouring of concrete for the concentrator building and mill is complete.
Construction of the mine camp and storage facilities is complete. The
construction of the haulage road between the mine and the concentrator
commenced in May.
Statutory permitting process entered its final phase with the submission of
full design documentation to the Chief Environmental Expertise, a government
agency in charge of environmental permitting.
At POX-2, Polymetal signed comprehensive contract for the detailed
engineering of high-pressure sections of the facility with Hatch. Equipment
for the concentrate preparation section (roll crushers, acid-resistant
mills, steep-angle conveyors) and intensive cyanidation unit has been
contracted. The land use rights for construction have now been received.
Construction of a new concentrate storage facility is under way.
At Veduga, Polymetal published an updated JORC-compliant Ore Reserve
estimate which comprised 18.9 Mt of ore with an average grade of 4.6 g/t
containing 2.8 Moz of gold (a 111% increase in gold contained). Exploration
drilling is ongoing with further resource and reserve upgrade expected in Q1
2020.
SUSTAINABILITY, HEALTH AND SAFETY
In Q2, our LTIFR stood at 0.22 (versus 0.17 in Q2 2018) with a total of 6
work-related incidents recorded across the Group (5 incidents in Q2 2018).
The increase is driven by minor incidents that occurred on site but not
during the production process.
We regret to report a fatality that occurred on 10 May 2019 at our Omolon
operation. A pump station operator died at the Kubaka pit. We extend our
sincere condolences to the family, friends and colleagues of the deceased
employee.
Earlier in Q2, Polymetal provided full disclosure on its tailings storage
facilities management in response to public investor enquiries to mining
companies, while two of Polymetal gold production operations, Voro and the
Amursk POX plant, became certified as being in full compliance with the
International Cyanide Management Code.
ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
Sequence No.: 14439
EQS News ID: 845725
End of Announcement EQS News Service
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(END) Dow Jones Newswires
July 24, 2019 02:00 ET (06:00 GMT)
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