JOHANNESBURG (miningweekly.com) – Russia’s largest gold mining company Polyus on Thursday reported a 7% increase in its adjusted net profit to $1.02-billion, boosted by higher production and sales.

The miner, which is listed in London in June last year, produced 2.16-million ounces of gold in 2017, at an average realised refined gold price of $1 260/oz, realising revenue of $2.72-billion – an 11% improvement on 2016’s revenue.

The miner’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose by 11% to $1.7-million.

"The strength of our assets and the focus on efficiency have enabled Polyus to deliver production numbers above our official guidance of 2 075 000 oz to 2 125 000 oz for the fourth year in a row, at 2 160 000 oz, or 3% higher. Our financial results in 2017 also reflect this: Revenue and Ebitda have all shown double-digit growth, with our Ebitda margin remaining among the highest in global natural resources industry at 63%. This has been supported by our ability to decrease total cash costs by 6% compared to the previous year to $364/oz, despite the Russian rouble gaining 13% against the dollar during the year,” said CEO Pavel Grachev.

All-in sustaining cost increased to $621/oz, up 9% from the previous year, owing to higher stripping expenses.

Polyus invested $804-million in capital expenditure (capex) in 2017, mainly owing to the ramp-up of construction activity at the Natalka mine, in Russia's Far East. The asset will be fully ramped up in the second half of 2018.

In 2018, Polyus plans to invest about $850-million across the business, including $250-million of maintenance capex. The figure also includes about $150-million of capitalised operating expenses related to the Natalka operations.

Polyus is also proceeding with a scoping study for the Sukhoi Log development, which is one of the largest undeveloped gold deposits in the world.

“…we believe that obtaining the Sukhoi Log licence is a fundamental achievement that gives us a great position to grow in the coming years,” Grachev stated.

The miner has set a production target of 2.38-million to 2.43-million ounces for 2018.