Russian gold miner Petropavlovsk has worked to stabilise and restore momentum to the company after a difficult year.
In a trading update for the six months to June 30, released on Monday, the company said this work included initiating a review of the company’s activities, a formal process to bring in new independent nonexecutive directors and to reappoint Pavel Maslovskiy as CEO.
Maslovskiy on Monday commented in a statement that recent events had had a negative impact in certain areas of the company and caused disruption to its operational and development plans.
Consequently, Petropavlovsk has adjusted its production guidance to be more conservative, and introduced measures to rectify the delays to improve current schedules.
The POX Hub development project was partially delayed in the first half of the year and is now expected to be commissioned in December, which affects total production expectations for the year.
The company’s production guidance has been lowered to 400 000 oz to 410 000 oz, compared with the previously guided 420 000 oz to 460 000 oz.
“I am confident of our ability to bring POX into operation in 2019, and of the huge contribution that the successful execution of this project will make to the group's production and value. The POX plant is the result of almost a decade of work from a strong group of scientists and engineers.
“Our general development progress on this project has also been assessed by an independent third party, which confirmed that commissioning in the fourth quarter is feasible,” said Maslovskiy.
He added that the company’s engineering and scientific team is currently focused on the Malomir flotation plant, which has just started work following a significant delay, compared with the original timeline.
The development team is exploring potential technological and functional improvements so that the first line of the plant may be brought to full capacity by September, and to commission the second line in October.
Once these improvements are introduced, Petropavlovsk expects to produce between 20 000 t and 30 000 t of high-grade flotation concentrate by the end of the year, ensuring that POX facilities are commissioned smoothly.
In addition, this is a marketable product that can potentially be sold to third parties, providing additional flexibility, if required. The impact of these improvements on production and cash flow projections is currently being evaluated.
Petropavlovsk will release its interim results on September 27.
The company expects to report a 13% year-on-year decrease in total gold production, owing to lower grades processed and a decrease in the contribution from gold in circuit, to 201 400 oz, compared with 232 400 oz in the first half of 2017.