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Polymetal to outperform 2018 production and cost guidance

15th October 2018

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Russian miner Polymetal expects to exceed its 2018 production guidance of 1.55-million ounces of gold equivalent by up to 50 000 oz, on the back of the successful ramp-up of the Kyzyl mine.

The company produced 1.07-million ounces of gold equivalent in the first nine months of the year, 447 000 oz of which was booked in the September quarter.

The third-quarter gold equivalent production decreased by 5% year-on-year, Polymetal reported on Monday, but explained that large volumes of concentrate produced at Kyzyl and Mayskoye would be shipped and booked as production in the fourth quarter.

Gold production in the third quarter was 356 000 oz and silver production was 6.7-million ounces.

The miner said that Kyzyl had successfully ramped up to its 150 000 t/m capacity with a recovery rate of 86%. Since the start-up of the mine, Kyzyl has delivered 47 000 oz of gold in concentrate of which 10 000 oz was booked as production. The new operation is expected to exceed its production guidance of 80 000 oz of payable gold shipped in 2018.

Not only will the company beat its production guidance, but also its cost guidance for the year. Citing the weakness of the rouble and tenge against the US dollar, Polymetal said that it would outperform its cost guidance of $650/oz to $700/oz of gold equivalent for total cash costs and its guidance of $875/oz to $925/oz of gold equivalent for all-in sustaining cash costs.

Revenue decreased by 16% year-on-year to $459-million in the third quarter, on the back of lower prices and sales volumes. Gold sales volumes totalled 321 000 oz and silver totalled 5.3-million ounces.

Polymetal reported net debt of $1.8-billion, but said that it expected a meaningful reduction in the fourth quarter, on the back of destockpiling at Kyzyl and Mayskoye.

The production guidance for 2019 and 2020 remains unchanged at 1.7-million ounces and 1.8-million ounces, respectively.

Edited by Creamer Media Reporter

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