REG - Polymetal Int PLC - Q1 2018 Production Results
Release time
IMMEDIATE
Date
18 April 2018
Polymetal International plc
Q1 2018 production results
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's production results for the first quarter ended March 31, 2018.
HIGHLIGHTS
· Polymetal produced 295 Koz of gold equivalent ("GE") in the first quarter of 2018, a 5% year-on-year ("y-o-y") increase. Strong performances at Albazino, Varvara, and Svetloye more than compensated for the grade-driven decline at Omolon.
· Gold production for the quarter increased 8% over the previous year to 214 Koz, while silver production decreased by 3% to 6.0 Moz.
· Q1 revenues increased 19% year-on-year to US$ 354 million driven by volume growth, higher commodity prices, and lesser impact from seasonal refinery closures (compared to the previous year). Silver sales traditionally lagged production due to the seasonal increase in concentrate inventories. This working capital build-up is expected to reverse by year-end, whereas gold sales volumes were largely in line with production.
· At Kyzyl, construction activities are anticipated to complete slightly ahead of schedule. Dry commissioning of the processing plant is expected to start on June 1st, while first concentrate production is expected on August 1st.
· Net debt increased from US$ 1,421 million as at 31 December 2017 to US$ 1,578 million as at 31 March 2018, primarily due to the accumulation of silver inventory and seasonal advance purchases of diesel fuel and other consumables. Free cash flow generation in 2018 will, as is usual for Polymetal, be weighted towards the second half of the year.
· The Company remains on track to produce 1.55 Moz of GE in 2018 and reiterates its annual cost guidance: total cash costs in the range of US$ 650-700/ GE oz and AISC costs in the range of US$ 875-925/GE oz. The cost guidance remains contingent on the Rouble/Dollar exchange rate dynamic, which has a significant effect on the Group's operating costs.
· In April 2018, Polymetal increased its ownership in the Prognoz silver property to 50%, which is the largest undeveloped primary silver deposit in Russia. An updated JORC-compliant mineral resource estimate and a preliminary economic assessment for the asset will be published in Q4 2018.
· We are saddened to report a fatal accident on March 3rd, 2018 at our Kapan operation in which an underground miner died from gas poisoning. The management team are currently developing a comprehensive action plan aimed at mitigating the risks associated with air quality and efficiency of ventilation in underground mines. The first steps included the purchase of additional air monitoring equipment including the introduction of remote air quality sensors throughout our operations.
"We got off to a steady start in 2018 with stable production results at all our mines", said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. "The successful launch of Kyzyl will demonstrate Polymetal's ability to successfully deliver on new projects while continuing to efficiently run our existing operations".
3 months ended Mar 31,
% change1
2018
2017
Waste mined, Mt
28.8
25.5
+13%
Underground development, km
32.8
24.9
+32%
Ore mined, Kt
3,190
3,314
-4%
Open-pit
2,036
2,203
-8%
Underground
1,152
1,110
+4%
Ore processed, Kt
3,061
2,843
+8%
Production
Gold, Koz
214
199
+8%
Silver, Moz
6.0
6.1
-3%
Copper, Kt
0.7
0.5
+58%
Zinc, Kt
1.3
1.1
+28%
Gold equivalent, Koz2
295
280
+5%
Sales
Gold, Koz
206
176
+17%
Silver, Moz
4.8
4.6
+4%
Copper, Kt
0.9
0.1
+1139%
Zinc, Kt
0.3
0.5
-52%
Revenue, US$m3
354
298
+19%
Net debt, US$m4
1,578
1,421
+11%
Safety5
LTIFR
0.15
0.12
+25%
Fatalities
1
-
+100%
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 oz Ag/Au, 5:1 t Cu/oz Au and 2:1 t Zn/oz Au conversion ratios.
(3) Calculated based on the unaudited consolidated management accounts. Concentrate sales are recorded based on forward prices for the expected dates of final settlement and concentrate revenue is presented net of refining and treatment charges.
(4) Non-IFRS measure, based on unaudited consolidated management accounts. Net debt equals to current and non-current borrowings less cash and cash equivalents. Comparative information is presented for 31 December 2017.
(5) LTIFR =lost time injury frequency rate per 200,000 hours worked.
PRODUCTION BY MINE
3 months ended March 31,
% change
(Y-o-Y)
2018
2017
GOLD EQ. (KOZ)
Dukat
80
79
+2%
Albazino-Amursk
90
68
+32%
Mayskoye
-
5
-100%
Omolon
31
51
-38%
Voro
26
26
+1%
Varvara
35
29
+21%
Svetloye
8
-
NA
Okhotsk
11
11
+0%
Kapan
12
10
+18%
TOTAL
295
280
+5%
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, 18 April, 10:00 London time (12:00 Moscow time).
To participate in the call, please dial:
8 10 800 500 98 63 access code 38517108# (free from Russia), or
+44 20 3009 24 63 (free from the UK), or
+1 646 502 51 25 (free from the US), or
any of the above numbers (from outside the UK, the US and Russia) or follow the link:
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=5539.
Please be prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=5539. 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 418753592#, from 10:30 London time (12:30 Moscow time) Wednesday, April 18, till 10:30 London time (12:30 Moscow time) Wednesday, April 25, 2018.
Enquiries
Media
Investor Relations
FTI Consulting
Leonid Fink
Viktor Pomichal
+44 20 3727 1000
Polymetal
Eugenia Onuschenko
Maryana Nesis
Michael Vasiliev
+44 20 7016 9505 (UK)
+7 812 334 3666 (Russia)
Joint Corporate Brokers
Morgan Stanley
Andrew Foster
Richard Brown
Panmure GordonAdam James
James Stearns
+44 20 7425 8000
+44 20 7886 2500
RBC Europe Limited
Tristan Lovegrove
Marcus Jackson
+44 20 7653 4000
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", "INTENDS", "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
DUKAT OPERATIONS
3 months ended Mar 31,
% change
2018
2017
MINING
Dukat
Underground development, m
8,717
8,012
+9%
Ore mined (underground), Kt
405
399
+2%
Goltsovoye
Underground development, m
1,823
1,387
+31%
Ore mined (underground), Kt
45
45
-0%
Perevalnoye
Underground development, m
873
502
+74%
Ore mined (underground), Kt
2
-
NA
Lunnoye + Arylakh
Underground development, m
2,188
1,648
+33%
Ore mined (underground), Kt
134
144
-7%
Terem
Underground development, m
847
-
NA
Ore mined (underground), Kt
9
-
NA
TOTAL HUB
Underground development, m
14,448
11,549
+25%
Ore mined (underground), Kt
595
588
+1%
PROCESSING
Dukat
Ore processed, Kt
484
476
+2%
Grade
Gold, g/t
0.55
0.45
+21%
Silver, g/t
314
329
-5%
Recovery1
Gold
86.2%
83.6%
+3%
Silver
87.8%
87.6%
+0%
Production
Gold, Koz
8.3
5.6
+50%
Silver, Moz
4.3
4.3
+0%
Lunnoye
Ore processed, Kt
113
113
+0%
Grade
Gold, g/t
1.3
1.3
-2%
Silver, g/t
358
381
-6%
Recovery1
Gold
85.2%
91.9%
-7%
Silver
91.8%
92.5%
-1%
Production
Gold, Koz
4.0
4.3
-7%
Silver, Moz
1.2
1.3
-7%
TOTAL PRODUCTION
Gold, Koz
12.3
9.8
+25%
Silver, Moz
5.5
5.5
-1%
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory (concentrate, precipitate)
Q1 gold production at Dukat increased 25% year-on-year to 12.3 Koz as stoping started at gold-rich veins on the deeper levels. Silver production remained almost flat year-on-year at 5.5 Moz as slightly lower grades were offset by better processing volumes.
Underground development at the Perevalnoye and Terem satellite deposits is making significant progress as both ore sources are expected to deliver significant contributions to the feed at the Omsukchan concentrator during the year. Stoping at Perevalnoye is expected to ramp up by Q3.
At the Lunnoye processing plant, volumes remained unchanged over the previous year, while production decreased by 7% on the back of lower grades and recoveries as a result of depletion of the high-grade areas of the Zone 7 vein.
ALBAZINO-AMURSK
3 months ended Mar 31,
% change
2018
2017
MINING
Waste mined, Kt
5,101
4,401
+16%
Underground development, m
2,360
1,587
+49%
Ore mined, Kt
452
482
-6%
Open-pit
345
406
-15%
Underground
108
76
+42%
PROCESSING
Albazino concentrator
Ore processed, Kt
419
417
+0%
Gold head grade, g/t
5.3
4.7
+12%
Gold recovery1
86.5%
86.3%
+0%
Concentrate produced, Kt
33.9
35.3
-4%
Concentrate gold grade, g/t
57.1
48.6
+18%
Gold in concentrate, Koz2
62.2
55.1
+13%
Amursk POX
Concentrate processed, Kt
50.1
43.1
+16%
Gold head grade, g/t
57.2
53.0
+8%
Recovery
97.3%
96.1%
+1%
Gold produced, Koz
89.9
68.3
+32%
TOTAL PRODUCTION
Gold, Koz
89.9
68.3
+32%
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 completion of downstream processing at the Amursk POX
In Q1, Albazino-Amursk achieved record quarterly gold production of 90 Koz, up 32% year-on-year and 26% quarter-on-quarter, which was mainly driven by improved POX recovery levels and higher hourly productivity. Higher head grades also made a significant contribution as the facility continued to process increased volumes of high-grade 3rd party material.
The average POX recovery rate of 97.3% for the quarter set a new record, mostly due to the full automation of the material flow control system and the expansion of the water treatment section that was completed in 2017.
The debottlenecking project at the Amursk POX is progressing on schedule as the installation of the oxygen station equipment and new filter presses for tailings and gypsum sediment is complete. The focus is now on the installation of sulphur filters and heat exchange equipment. Polymetal plans to ramp up the debottlenecked POX plant in the second half of 2018, in time to take feed from the Kyzyl concentrator.
At Albazino, productivity at the underground mine continued to improve with the full transition to partially cemented waste backfill in primary stopes. As a result, both underground development and ore mined volumes demonstrated substantial improvements both quarter-on-quarter and year-on-year.
OMOLON OPERATIONS
3 months ended Mar 31,
% change
2018
2017
MINING
Sopka
Waste mined, Kt
1,032
427
+142%
Ore mined (open pit), Kt
293
-
NA
Tsokol
Underground development, m
867
905
-4%
Ore mined (underground), Kt
38
35
+9%
Birkachan
Underground development, m
1,204
1,146
+5%
Ore mined (underground), Kt
28
27
+5%
Oroch
Waste mined, Kt
-
109
-100%
Ore mined (open pit), Kt
-
81
-100%
Olcha
Waste mined, Kt
-
184
-100%
Underground development, m
1,101
506
+118%
Ore mined, Kt
25
73
-65%
Open-pit
-
73
-100%
Underground
25
-
NA
TOTAL HUB
Waste mined, Kt
1,032
719
+43%
Underground development, m
3,172
2,557
+24%
Ore mined, Kt
384
216
+78%
Open-pit
293
154
+90%
Underground
92
62
+48%
PROCESSING
Kubaka Mill
Ore processed, Kt
206
215
-4%
Grade
Gold, g/t
4.8
7.3
-35%
Silver, g/t
30
22
+37%
Recovery1
Gold
95.2%
93.7%
+2%
Silver
78.5%
78.7%
-0%
Gold production, Koz
30.4
49.0
-38%
Silver production, Moz
0.1
0.1
-37%
TOTAL PRODUCTION
Gold, Koz
30.4
49.0
-38%
Silver, Moz
0.1
0.1
-37%
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory
NA = not available.
In Q1, gold production at Omolon was down 38% due to a grade decline as there is no trucking and processing of higher-grade ore from Olcha in 2018. The shortfall in underground ore was made up by lower-grade material from Birkachan open-pit stockpiles.
At Sopka, open-pit mining is running as planned with 293 Kt of ore mined and transported to the Kubaka mill for processing. The open pit mine life at Sopka has been extended to 2H 2019 as step-out drilling identified incremental high-quality mineralisation extending into pit walls.
The Birkachan seasonal heap leach operation is set to recommence in Q2 2018.
MAYSKOYE
3 months ended Mar 31,
% change
2018
2017
MINING
Waste mined, Kt
573
1,018
-44%
Underground development, m
6,098
4,608
+32%
Ore mined, Kt
178
254
-30%
Open-pit
21
23
-9%
Underground
157
231
-32%
PROCESSING
Ore processed, Kt
203
207
-2%
Gold grade, g/t
5.0
6.2
-19%
Gold recovery1
88.1%
87.1%
+1%
Concentrate produced, Kt
17.2
18.6
-7%
Concentrate gold grade, g/t
52.1
60.4
-14%
Gold in concentrate, Koz2
28.8
36.1
-20%
Amursk POX
Concentrate processed, Kt
-
4.2
-100%
Gold grade, g/t
-
48.6
-100%
Recovery
-
96.1%
-100%
Gold produced, Koz
-
5.2
-100%
TOTAL PRODUCTION
Gold, Koz
-
5.2
-100%
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 internal downstream processing to saleable metal product.
At Mayskoye underground mining focused on development aimed at opening up open up new mine levels. As a result, the concentrator feed was complemented by lower-grade stockpiles that drove gold in concentrate 20% lower year-on-year.
This year most concentrate will be directed to Chinese off-take as the in-house POX capacity is taken up by third-party material. Accordingly, production at Mayskoye will be booked in the second half of the year once the stockpiled concentrate will be shipped to off-takers during navigation season.
Oxide ore processing is set to recommence in May with the combined float-leach flowsheet. 260 Kt of stockpiled oxide ore is expected to be processed over four months while sufficient amounts of underground sulphide ore is accumulated from stopes at new mine levels.
VARVARA
3 months ended Mar 31,
% change
2018
2017
MINING
Varvara
Waste mined, Kt
1,604
3,677
-56%
Ore mined (open pit), Kt
169
502
-66%
- float ore
95
139
-31%
- leach ore
74
363
-80%
Komarovskoye
Waste mined, Kt
5,545
2,304
+141%
Ore mined (open pit), Kt
506
433
+17%
TOTAL HUB
Waste mined, Kt
7,149
5,981
+20%
Ore mined (open pit), Kt
675
935
-28%
PROCESSING
Flotation
Ore processed, Kt
76
57
+34%
Grade
Gold, g/t
1.1
1.9
-40%
Copper
0.55%
0.56%
-1%
Recovery1
Gold
60.9%
61.0%
-0%
Copper
90.1%
76.1%
+18%
Production
Gold (in concentrate), Koz
1.6
1.6
+0%
Copper (in concentrate), Kt
0.4
0.2
+70%
Toll-treated ore processed, Kt2
12
11
+10%
Leaching
Ore processed, Kt
775
738
+5%
Gold grade, g/t
1.5
1.4
+10%
Gold recovery1
86.4%
82.1%
+5%
Gold production, Koz
31.2
26.1
+20%
Total ore processed, Kt
863
805
+7%
TOTAL PRODUCTION
Gold, Koz
32.8
27.6
+19%
Copper, Kt
0.4
0.2
+70%
Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory(2) To be further processed at Amursk POX.
In Q1 Varvara delivered a 19% year-on-year increase in GE production on the back of processing more ore from Komar. The new railway spur at Komar, which is located immediately adjacent to the pit, and the purchase of additional rolling stock enabled a significant increase in the monthly amount of ore railed to more than 200 kt.
Mining activity continued to shift towards Komar as several open pits at Varvara have been completely mined out.
Gold recovery in the leaching circuit improved thanks to the detailed geo-metallurgical mapping of Komar ore followed by the introduction of flexible reagent addition.
In the period, Varvara continued to toll-treat some of the refractory gold ore bought by the Company in Russia. The produced gold concentrate is then processed at the POX facility. Gold production from this material is booked following Dore production from concentrate at Amursk.
VORO
3 months ended Mar 31,
% change
2018
2017
MINING
Voro
Waste mined, Kt
1,071
2,519
-57%
Ore mined (open pit), Kt
302
420
-28%
- primary
294
367
-20%
- oxidised
8
53
-84%
PROCESSING
Voro Heap Leach
Ore stacked, Kt
-
-
NA
Gold grade, g/t
-
-
NA
Gold production, Koz
1.6
2.5
-38%
Voro CIP
Ore processed, Kt
247
247
+0%
Gold grade, g/t
3.9
3.6
+9%
Gold recovery1
80.4%
80.0%
+0%
Gold production, Koz
24.5
23.3
+5%
TOTAL PRODUCTION
Gold, Koz
26.1
25.9
+1%
Note: (1) Technological recovery, includes gold within work-in-progress inventory
NA = not available.
In Q1, gold production at Voro slightly increased year-on-year on the back of improved grades and recovery levels at the CIP circuit.
Mining volumes continued to decline as oxidised ore is nearly depleted. 2018 is expected to be the last year of heap leach stacking at Voro.
SVETLOYE
3 months ended Mar 31,
% change
2018
2017
MINING
Svetloye
Waste mined, Kt
102
189
-46%
Ore mined (open pit), Kt
326
264
+23%
PROCESSING
Svetloye Heap Leach
Ore stacked, Kt
219
96
+130%
Gold grade, g/t
3.8
3.8
-1%
Gold production, Koz
8.3
-
NA
TOTAL PRODUCTION
Gold, Koz
8.3
-
NA
Note: NA = not available.
The Svetloye heap leach operation resumed in Q1, delivering 8 Koz of gold despite severe winter conditions. Production is expected to pick up strongly with the arrival of warm season and increase in heap solution temperature.
OKHOTSK
3 months ended Mar 31,
% change
2018
2017
MINING
Avlayakan
Underground development, m
1,352
1,244
+9%
Ore mined (underground), Kt
46
39
+19%
PROCESSING
Khakanja
Ore processed, Kt
153
153
+0%
Grade
Gold, g/t
1.7
1.3
+29%
Silver, g/t
87
100
-13%
Recovery1
Gold
97.1%
96.9%
+0%
Silver
71.6%
73.9%
-3%
Gold production, Koz
7.5
7.0
+6%
Silver production, Moz
0.3
0.3
-12%
TOTAL PRODUCTION
Gold, Koz
7.5
7.0
+6%
Silver, Moz
0.3
0.3
-12%
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory (precipitate)
At Okhotsk, gold production in the first quarter increased by 6% to 7.5 Koz, mainly due to better gold grades and solid recovery levels at the plant.
Open-pit mining has commenced at the Khotorchan satellite deposit. Mining volumes at Avlayakan increased year-on-year as its life-of-mine was extended to H2 2018 on the back of positive down-dip exploration results.
KAPAN
3 months ended Mar 31,
% change
2018
2017
MINING
Underground development, m
5,417
3,368
+61%
Ore mined (underground), Kt
157
115
+36%
PROCESSING
Ore processed, Kt
154
115
+34%
Grade
Gold, g/t
1.8
2.1
-13%
Silver, g/t
33
43
-24%
Copper, %
0.30%
0.27%
+11%
Zinc, %
1.31%
1.33%
-1%
Recovery
Gold
81.9%
83.1%
-1%
Silver
81.7%
83.0%
-2%
Copper
94.5%
90.9%
+4%
Zinc
87.5%
88.3%
-1%
TOTAL PRODUCTION
Gold, Koz
6.4
5.8
+12%
Silver, Moz
0.1
0.1
-1%
Copper, Kt
0.4
0.3
+48%
Zinc, Kt
1.3
1.1
+28%
In Q1, Kapan continued to improve its operational performance and produced 12 Koz of gold equivalent, an 18% increase over the previous year. This was mainly driven by increased processing volumes on the back of ongoing enhancement measures to debottleneck the underground mine.
In particular, underground development jumped 61% as mine personnel completed full transition from manual to mechanized drilling. Grades declined as manual shrinkage stoping with minimal dilution was completely phased out due to health and safety issues.
KYZYL
3 months ended Mar 31,
% change
2018
2017
MINING
Waste mined, Kt
13,795
10,698
+29%
Ore mined (open-pit), Kt
74
-
NA
Note: NA = not available.
In Q1, mining activities continued to increase both quarter-on-quarter and year-on-year with the first 74 Kt of ore mined during the period.
All construction activities are on track with most of the key equipment and infrastructure finalized during Q1. This includes the concentrator equipment, the crusher unit, as well as the assay lab. The tailings storage facility has successfully passed hydraulic testing.
Construction is now focused on finalizing electrical wiring, ventilation ducting, and the installation of process control equipment. Dry commissioning is expected to start on June 1st, with first concentrate production expected on August 1st.
Polymetal signed the concentrate off-take contract for the first 12 months of production with one of its established trading partners. This will ensure free cash flow generation almost immediately after the start of concentrate production.
OTHER DEVELOPMENTS
In April, Polymetal has increased its stake in Prognoz, the largest undeveloped silver deposit in Russia (292 Moz of silver resources), to 50% by acquiring a 45% stake for a total consideration of US$ 72 million paid in shares. In 2018, Polymetal plans to complete 46 km of diamond drilling, as well as extensive in-house metallurgical test work in order to publish an updated JORC-compliant resources estimate by Q4 2018.
HEALTH AND SAFETY
We are saddened to report a fatal accident on March 3, 2018 at our Kapan operation. An underground miner died from gas poisoning. The management is currently developing a comprehensive action plan aimed at mitigating the risks associated with air quality and efficiency of ventilation in underground mines. The first steps included the purchase of additional air monitoring equipment and the introduction of remote air quality sensors throughout our operations.
The focus of safety improvement initiatives this year will be to identify the changes in working conditions and practices at underground mines originating from variations in mining methods and environments. Particular emphasis will be placed on training and equipping people working in remote small-scale stopes. The introduction of automated safety control devices and evaluation of tele-op opportunities will receive thorough management attention.
PERSONNEL
Sergey Babkin (57) assumed the position of Executive Vice President - Economic Security, effective from January 22, 2018. Mr. Babkin was born in 1960 and graduated from the Tyumen High Military Engineering Command School in 1981. In 1984, Sergey joined security services and in 1990 graduated from the Andropov Security Institute. Until 2011 Mr Babkin held various senior roles with the Federal Security Service of the Russian Federation. From 2011, he was head of security at Nomos Bank, and later at Otkritie Bank.
Sergey Pekus (46), assumed the position of Managing Director at Kutyn. Mr. Pekus graduated from the Leningrad Higher Artillery Command School in 1993. In 2004, he obtained an MBA degree from the Russian Customs Academy. Sergey joined Polymetal's supply chain management department in 2004 and was promoted to VP-Supply Chain Management for Khabarovsk region in 2014. Since 2016 Mr. Pekus was in charge of Nezhda JV.
This information is provided by RNSThe company news service from the London Stock ExchangeENDDRLLIFVESAITLIT
Recent news on Polymetal International PK
See all newsREG - Official List Polymetal Int PLC - Removal - Polymetal International plc
AnnouncementREG - Stock Exch Notice Polymetal Int PLC - Cancellation - Polymetal International plc
AnnouncementREG-Polymetal International plc Polymetal: Resumption of trading on AIX
AnnouncementREG-Polymetal International plc Polymetal: Q2 2023 production results
AnnouncementREG-Polymetal International plc Polymetal: Re-Domiciliation to AIFC Completed
Announcement