Brief: Russia's Polymetal provides update on impact of sanctions

Polymetal International PK

30/03/2022 07:21

March 30 (Reuters) - Russian precious metals producer
Polymetal  POLYP.L :
    * Net debt increased to $1.94 billion as of 29 March (31
December
2021: $1.65 billion) mainly driven by seasonal working capital
increase and accelerated procurement;
    * 94% of total debt is denominated in U.S. dollars;
    * In Russia, sales of gold and silver concentrates continue
normally to East Asia and Kazakhstan;
    * Group has approx. $0.4 billion in cash and cash
equivalents
deposited with non-sanctioned financial institutions;
    * Company maintains $0.5 billion of undrawn credit lines
from
non-sanctioned Russian financial institutions;
    * Shipments have been temporarily impacted by change of
freight
and logistics service providers, which is likely to result in
higher costs;
    * Lending from Russian banks is available in roubles only;
    * Sales of gold bullion in Russia have been restored to new
counterparties on terms consistent with those received earlier;
    * Sales of bullion and concentrate from Kazakhstan continue
as
usual;
    * RUB interest rates are 23-25% on average following central
bank's base rate increase to 20%;
    * Group is utilising these facilities occasionally for
short-term
working capital financing;
    * Domestic demand for gold is boosted by local retail
investment;
    * Additional liquidity is expected to become available in Q2
2022
as banks gradually re-open lending;
    * Operating cash costs (TCC) guidance is under review;
    * Production guidance for 2022 of 1.7 moz of ge remains in
place;
    * Completed review of non-sustaining development project
schedules
and budgets;
    * Projects in advanced stages of development or nearing
completion
are on track to be commissioned on schedule;
    * Pox-2 is expected to experience 3-6 month slippage from
original
schedule mostly due to logistical challenges;
    * Early-stage projects (Veduga, Mayskoye Backfill,
Maminskoye) are
delayed by one year;
    * Pacific Pox project has been suspended indefinitely with
studies
under way to potentially re-site facility in Kazakhstan;
    * Brownfield exploration schedule and volumes remain
unchanged;
    * Greenfield exploration budgets were reduced by 50% (mostly
affecting junior JVs);
    * Continues to re-evaluate stability, liquidity and solvency
of
business, including its dividend recommendation;
    * Updated CAPEX and AISC guidance to be provided at capital
markets day on April 25;
    * Ability to distribute dividends to all shareholders in an
equitable way will be one of factors in finalising dividend
decision.

 Further company coverage:  POLYP.L 

 (Reporting by Reuters)