REG - Polymetal Int PLC - Q2 2014 production results - correction <Origin Href="QuoteRef">POLYP.L</Origin>
06/09/2014 22:39
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RNS Number : 7492N
Polymetal International PLC
30 July 2014
Release time IMMEDIATE
Date 30 July 2014
Polymetal International plc
Q2 2014 production results - correction
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its
subsidiaries - "Polymetal", the "Company", or the "Group") announces that the
following amendment has been made to the Q2 2014 production results
announcement released on 30 July 2014 at 07:00 under RNS number 6982N07.
A correction has been made to the first paragraph on page one:
· Polymetal produced 652 Koz of gold equivalent in the first half of 2014,
not 657 Koz as previously stated. All other details remain unchanged.
The full amended text is shown below.
HIGHLIGHTS
· Polymetal produced 652 Koz of gold equivalent in the first half of 2014,
an increase of 17% compared to the same period of the prior year. The original
production guidance of 1.3 Moz is likely to be exceeded by approximately 5%.
· Quarterly goldequivalent production in the second quarter was 335 Koz,
up 4% year-on-year. Continued robust performance at the Amursk POX as well as
improved grades and throughput at Dukat and Omolon more than offset planned
grade erosion at Varvara and Khakanja. Quarterly gold production was 196 Koz,
up 3% year-on-year. Silver production in Q2 was 8.1 Moz, up 8% year-on-year.
· Contracts with three off-takers in China for Mayskoye concentrate were
signed during the second quarter on terms which have been meaningfully
improved compared to 2013 off-take agreements. The first shipments of
concentrate from Mayskoye to the Amursk POX and Chinese off-takers will
commence in August.
· Net debt at 30 June 2014 decreased by US$ 7 million compared to 31
December 2013 to US$ 1,038 million while the Company paid dividends of US$ 31
million during the period. Free cash flow generation is expected to be
significantly stronger in the second half of the year due to the planned
de-stockpiling at Mayskoye and the seasonal reduction of the gap between
production and sales.
· The Company has announced the signing of the definitive agreement to
purchase Kyzyl Project, a large gold deposit in Kazakhstan with JORC-compliant
reserves of 7 Moz of gold at 7.5 g/t. The circular to shareholders on the
proposed acquisition was mailed on 14 July 2014 and the General Meeting of
Shareholders will take place on 14 August 2014. If approved by shareholders,
the transaction is expected to close in Q4 2014.
· In Q3 Polymetal's Board of Directors will consider the impact of the
Kyzyl transaction on the internal project pipeline and formally review
development approaches and timelines for Albazino-2, Svetloye, Maminskoye, and
Kutyn.
"Polymetal is consistently delivering robust operating performance", said
Vitaly Nesis, CEO of Polymetal, commenting on the results. "We generate
meaningful free cash flow at the current commodity prices and expect this
trend to strengthen in the second half of the year, which should allow us to
continue paying regular dividends, subject to Polymetal's stated dividend
policy."
Waste mined, Kt 20,678 22,749 -9% 40,328 43,124 -6%
Underground development, rm 14,291 14,038 +2% 28,832 27,596 +4%
Ore mined, Kt 3,631 2,261 +61% 6,431 5,155 +25%
Open-pit 3,021 1,612 +87% 5,155 3,932 +31%
Underground 610 649 -6% 1,276 1,223 +4%
Ore processed, Kt 2,907 2,776 +5% 5,473 5,060 +8%
Production
Gold, Koz 196 190 +3% 386 311 +24%
Silver, Moz 8.1 7.5 +8% 15.5 14.0 +11%
Copper, tonnes 818 1,483 -45% 1,527 2,838 -46%
Gold equivalent, Koz2 335 323 +4% 652 559 +17%
Sales
Gold, Koz 181 193 -6% 352 295 +19%
Silver, Moz 7.9 5.2 +52% 13.9 10.9 +27%
Copper, tonnes 300 2,566 -88% 300 3,628 -92%
Revenue, US$m3 389 399 -3% 724 740 -2%
Net debt4 1,038 1,044 -1% 1,038 1,045 -1%
Safety6
LTIFR 0.22 - NA 0.66 0.12 +450%
FIFR 0.22 - NA 0.22 - NA
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
1:60 Ag/Au and 5:1 Cu/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 March 2014 (for the three months period) and 31 December
2013 (for the six months period). (5) NA = not available.
(6) LTIFR =lost time injury frequency rate per one million
hours worked; FIFR = fatal injury frequency rate per one million hours
worked
+450%
FIFR
0.22
-
NA
0.22
-
NA
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 1:60 Ag/Au and 5:1 Cu/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 March 2014 (for the three months
period) and 31 December 2013 (for the six months period). (5)
NA = not available. (6) LTIFR =lost time injury frequency rate
per one million hours worked; FIFR = fatal injury frequency rate per one
million hours worked
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, July 30, 2014
at 2:30 pm London time (5:30 pm Moscow time).
To participate in the call, please dial:
+7 495 705 9472 (free from Russia), or
+44 (0) 20 3043 2439 (free from the UK), or
+1 866 907 5925 (free from the US), or
any of the above numbers (from outside the UK, the US and Russia), followed by
the access code 288632#, or follow the link:
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=2315
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=2315. A
recording of the call will be available immediately after the call at +44 (0)
20 3367 9460(from within the UK), +1 87 7642 3018(from within the US) and +7
495 745 7948(from within Russia), access code 288632#, from 6:30 pm Moscow
time Wednesday, July 30, till 6:30 pm Moscow time Wednesday, August 6, 2014.
Enquiries
Media Investor Relations
Instinctif PartnersLeonid FinkTony Friend +44 20 7457 2020 PolymetalMaxim NazimokEvgenia Onuschenko ir@polymetalinternational.com +7 812 313 5964 (Russia)+44 20 7016 9503 (UK)
Joint Corporate Brokers
Morgan StanleyBill HutchingsSam McLennan +44 20 7425 8000 RBC Europe LimitedStephen FossJonny Hardy +44 20 7523 8350
RBC Europe LimitedStephen FossJonny Hardy
+44 20 7523 8350
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
MINING
Dukat
Underground development, m 7,741 7,838 -1% 15,461 15,828 -2%
Ore mined, Kt 336 322 +4% 695 634 +10%
Goltsovoye
Underground development, m 1,734 1,794 -3% 3,485 3,300 +6%
Ore mined (underground), Kt 51 48 +6% 93 86 +9%
Lunnoye + Arylakh
Waste mined, Kt 101 400 -75% 233 809 -71%
Underground development, m 1,267 1,825 -31% 2,743 3,244 -15%
Ore mined, Kt 111 113 -2% 206 223 -8%
Open-pit 19 29 -33% 36 65 -44%
Underground 91 84 +9% 170 158 +7%
PROCESSING
Dukat
Ore processed, Kt 426 406 +5% 825 818 +1%
Head grades
Gold, g/t 0.72 0.72 +0% 0.85 0.69 +23%
Silver, g/t 444 423 +5% 464 412 +13%
Recovery1
Gold 87.5% 83.5% +5% 87.2% 83.4% +5%
Silver 87.8% 85.8% +2% 87.8% 85.5% +3%
Production
Gold, Koz 8.3 8.0 +4% 20.0 15.5 +29%
Silver, Moz 5.2 4.8 +7% 11.0 9.4 +17%
Lunnoye
Ore processed, Kt 104 81 +28% 194 168 +16%
Head grades
Gold, g/t 1.3 1.2 +10% 1.2 1.1 +11%
Silver, g/t 411 428 -4% 385 423 -9%
Recovery1
Gold 83.0% 87.1% -5% 81.2% 87.9% -8%
Silver 92.2% 89.2% +3% 91.4% 88.8% +3%
Production
Gold, Koz 3.2 2.4 +35% 6.0 5.1 +19%
Silver, Moz 1.1 0.9 +25% 2.1 2.0 +6%
TOTAL PRODUCTION
Gold, Koz 11.6 10.4 +11% 26.0 20.6 +26%
Silver, Moz 6.3 5.7 +10% 13.1 11.3 +15%
26.0
20.6
+26%
Silver, Moz
6.3
5.7
+10%
13.1
11.3
+15%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory (concentrate, precipitate)
Quarterly silver production at Dukat increased to 6.3 Moz, an increase of 11%
compared to the same period of the prior year ("year-on-year") driven by the
continuous improvement program at the Omsukchan concentrator and the Dukat
underground mine. Silver production for the six months was 13.1 Moz, up 15%
year-on-year, while gold production grew to 26 Koz, up 26% year-on-year.
At the Dukat underground mine, the amount of underground development was
stable while the amount of ore mined decreased slightly to 336 Kt due to the
increased proportion of stope preparation performed during the current
quarter. At Goltsovoye, the amount of ore mined in Q2 grew 20%
quarter-on-quarter and 6% year-on-year due to tangible improvements in
dilution control and the reduction of mining losses.
After achieving exceptionally strong grades in ore mined and processed in Q1,
silver grades in ore processed at the Omsukchan concentrator returned to their
normalised levels. The decrease in grades was partially offset by further
growth in plant throughput, which increased by 7% quarter-on-quarter to 426
Kt. Average recoveries during the quarter continued to be strong, at 87.7% for
silver and 87.5% for gold, up 2% and 5% year-on-year, respectively.
Open-pit mining at Arylakh was fully completed during the quarter while the
underground development is continuing. The first ore was mined from
underground in the end of Q2. In the meantime additional amounts of ore are
sourced from Lunnoye where ore mined grew by 16% quarter-on-quarter.
At Lunnoye plant, better grinding quality achieved thanks to the ramp-up of
the new SAG mill contributed to a meaningful improvement in silver recoveries
to 92.2% (up 2% quarter-on-quarter) while the amount of ore processed
increased by 15% to 104 Kt. As a result, silver production on Lunnoye was 1.1
Moz, up 12% quarter-on-quarter.
ALBAZINO-AMURSK
3 months ended Jun 30, % change 6 months ended Jun 30, % change
2014 2013 2014 2013
MINING
Waste mined, Kt 4,094 4,404 -7% 7,974 8,297 -4%
Ore mined (open pit), Kt 418 294 +42% 787 579 +36%
PROCESSING
Albazino concentrator
Ore processed, Kt 402 404 -0% 795 722 +10%
Gold head grade, g/t 4.7 5.7 -18% 4.8 6.1 -21%
Gold recovery1 87.7% 86.7% +1% 87.6% 87.7% -0%
Concentrate produced, Kt 35.7 36.9 -3% 63.6 70.6 -10%
Concentrate gold grade, g/t 46.4 54.3 -14% 52.5 54.3 -3%
Gold in concentrate, Koz2 53.2 64.3 -17% 107.4 123.3 -13%
Amursk POX
Concentrate processed, Kt 34.1 25.1 +36% 75.4 46.2 +63%
Gold head grade, g/t 51.5 47.1 +9% 52.9 48.3 +10%
Recovery 93.4% 81.7% +14% 93.4% 78.7% +19%
Gold produced, Koz 53.2 28.4 +88% 115.0 41.3 +179%
TOTAL PRODUCTION
Gold, Koz 53.2 59.5 -11% 115.0 72.4 +59%
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
Gold in concentrate produced at Albazino in Q2 decreased slightly by 2%
quarter-on-quarter and 13% year-on-year as run-of-mine ore grades moved closer
to the reserve average grade. This was partially offset by the debottlenecking
at the processing plant which is now operating at an upgraded 1,600 Mtpa
capacity.
Pre-stripping commenced at the new Olga pit which will supplement ore from the
existing Anfisa pit.
Gold production at Albazino/Amursk in Q2 was 53 Koz, a decrease of 14%
quarter-on-quarter due to work-in-process fluctuations. Throughput and
recoveries were essentially flat at close-to-design levels.
MAYSKOYE
3 months ended Jun 30, % change 6 months ended Jun 30, % change
2014 2013 2014 2013
MINING
Underground development, m 2,630 2,581 +2% 5,158 5,224 -1%
Ore mined (underground), Kt 132 195 -32% 318 340 -6%
PROCESSING
Ore processed, Kt 190 133 +43% 392 133 +194%
Gold head grade, g/t 9.9 5.6 +77% 8.7 5.6 +55%
Gold recovery1 80.9% 55.1% +47% 80.7% 55.1% +47%
Concentrate produced, Kt 25.5 9.4 +172% 46.4 9.4 +396%
Concentrate gold grade, g/t 59.9 43.9 +37% 59.0 43.9 +35%
Gold in concentrate, Koz2 49.1 13.2 +272% 88.1 13.2 +568%
Amursk POX
Concentrate processed, Kt - - NA 1.7 - NA
Gold head grade, g/t - - NA 46.3 - NA
Recovery - - NA 79.5% - NA
Gold produced, Koz - - NA 2.1 - NA
TOTAL PRODUCTION
Gold, Koz - - NA 2.1 - NA
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.
The amounts of ore mined during the quarter were reduced due to the
availability of stockpiles while the underground development at the mine was
up 4% quarter-on-quarter and focused on preparing further stopes for mining.
The average grade processed at the Mayskoye concentrator increased 32%
quarter-on-quarter to 9.9 g/t in Q2, bringing the H1 average in line with the
reserve average due to tighter dilution control. As a result, gold in
concentrate during Q2 was 49 Koz, up 26% quarter-on-quarter.
Average recoveries of 80.9% remain materially below the design level partially
reflecting the adjustment to the off-take contract conditions stipulating
penalties for certain impurities. Recoveries are expected to improve towards
85% in Q3 as the introduction of new custom-developed reagents enhances the
ability to reject these impurities without incurring gold losses.
Contracts with three off-takers in China for Mayskoye concentrate were signed
during the second quarter on terms which were meaningfully improved compared
to 2013 off-take agreements. The contracts allow significant operating
flexibility in terms of tonnage shipped.
65 Kt of Mayskoye concentrate have been delivered to the seaport of Pevek
awaiting the start of the summer navigation period in the end of July. It is
expected that the volume shipped out in the current year will be approximately
evenly split between Amursk POX and off-take sales.
OMOLON OPERATIONS
MINING
Sopka
Waste mined, Kt 1,218 2,377 -49% 2,457 4,122 -40%
Ore mined (open pit), Kt 272 71 +286% 501 464 +8%
Dalneye
Waste mined, Kt - 152 -100% 879 152 +480%
Ore mined (open pit), Kt - - NA 176 - NA
Tsokol
Waste mined, Kt 1,327 1,272 +4% 2,380 1,855 +28%
Ore mined (open pit), Kt 45 62 -28% 125 112 +11%
Birkachan
Waste mined, Kt 329 1,041 -68% 528 1,932 -73%
Ore mined (open pit), Kt 630 217 +190% 695 586 +19%
TOTAL HUB
Waste mined, Kt 2,874 4,841 -41% 6,244 8,061 -23%
Ore mined (open pit), Kt 948 350 +171% 1,497 1,162 +29%
PROCESSING
Birkachan Heal Leach
Gold production, Koz 1.2 - NA 1.2 - NA
Kubaka Mill
Ore processed, Kt 203 173 +17% 400 357 +12%
Grade
Gold, g/t 8.6 6.9 +24% 7.3 5.1 +43%
Silver, g/t 266 260 +2% 146 129 +13%
Recovery1
Gold 95.5% 96.7% -1% 94.9% 95.7% -1%
Silver 84.5% 88.3% -4% 84.3% 87.8% -4%
Gold production, Koz 55.7 36.7 +52% 90.9 56.0 +62%
Silver production, Moz 1.4 1.2 +15% 1.4 1.2 +16%
TOTAL PRODUCTION
Gold, Koz 56.9 36.7 +55% 92.0 56.0 +64%
Silver, Moz 1.4 1.2 +15% 1.4 1.2 +16%
92.0
56.0
+64%
Silver, Moz
1.4
1.2
+15%
1.4
1.2
+16%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
At Omolon, gold and silver production for the six months increased by 64% and
16% year-on-year, respectively, driven by higher grade profile in ores from
Tsokol and Sopka, as well as a 12% increase in throughput.
At Tsokol, the amount of ore mined declined by 43% quarter-on-quarter as the
Kubaka plant has seasonally switched to processing ores from Sopka and Dalniy.
In the meantime, stripping works are intensified.
At Sopka, the amount of ore mined increased further by 19% quarter-on-quarter
due to re-allocation of mining fleet from Dalneye where mining will be resumed
in Q4 2014 - Q1 2015. Open-pit mining at Sopka is expected to be completed in
Q4 2014.
At the Birkachan open pit, 630 Kt of ore was mined during the quarter at a
very low stripping ratio as the mining in the Eastern pit was completed in
June. Underground development at Birkachan is expected to start in Q1 2015. At
the Birkachan heap leach, irrigation of the existing leach pads has commenced
in the quarter and first 1.2 Koz of gold were recovered from the solution.
VORO
MINING
Voro
Waste mined, Kt 2,707 2,659 +2% 5,221 5,813 -10%
Ore mined (open pit), Kt 655 466 +40% 887 731 +21%
- primary 246 201 +22% 477 405 +18%
- oxidised 409 265 +54% 409 326 +26%
PROCESSING
Voro Heap Leach
Ore stacked, Kt 310 262 +18% 310 262 +18%
Gold head grade, g/t 1.5 1.4 +8% 1.5 1.4 +8%
Gold production, Koz 4.5 4.7 -4% 10.6 8.8 +20%
Voro CIP
Ore processed, Kt 236 232 +2% 459 447 +3%
Gold head grade, g/t 6.3 6.2 +1% 5.9 6.1 -4%
Gold recovery 84.3% 79.1% +7% 82.5% 79.6% +4%
Gold production, Koz 31.5 33.9 -7% 63.4 67.6 -6%
TOTAL PRODUCTION
Gold, Koz1 35.9 38.6 -7% 74.0 76.4 -3%
Silver, Moz 0.021 0.028 -25% 0.043 0.048 -11%
74.0
76.4
-3%
Silver, Moz
0.021
0.028
-25%
0.043
0.048
-11%
Note: (1) Including the effect of rounding
Gold production at Voro in during six months 2014 decreased slightly by 3%
year-on-year to 74 Koz due to a scheduled decrease in grades at the CIP
circuit, which was partially offset by increased grades and throughput at the
heap leach facility.
The amounts of ore mined during six months 2014 were 21% higher year-on-year,
with the majority of the increase attributable to oxidised ore for heap
leaching.
VARVARA
MINING
Waste mined, Kt 8,572 7,899 +9% 15,946 15,912 +0%
Ore mined (open pit), Kt 877 412 +113% 1,512 927 +63%
PROCESSING
Flotation
Ore processed, Kt 251 254 -1% 493 505 -2%
Grade
Gold, g/t 1.1 1.1 +1% 1.1 1.1 -6%
Copper 0.43% 0.69% -38% 0.40% 0.67% -40%
Recovery1
Gold 46.4% 57.6% -19% 46.4% 58.4% -21%
Copper 80.2% 91.0% -12% 81.2% 90.4% -10%
Production
Gold (in concentrate), Koz 3.5 4.9 -28% 6.9 9.8 -30%
Copper (in concentrate), t 818 1,483 -45% 1,527 2,838 -46%
Leaching
Ore processed, Kt 628 679 -8% 1,297 1,346 -4%
Gold head grade, g/t 1.1 1.2 -5% 1.2 1.2 -2%
Gold recovery1 76.8% 83.4% -8% 76.6% 82.2% -7%
Gold production (in dore), Koz 17.8 21.2 -16% 38.3 40.9 -6%
TOTAL PRODUCTION
Gold, Koz 21.3 26.1 -18% 45.1 50.7 -11%
Copper, t 818 1,483 -45% 1,527 2,838 -46%
45.1
50.7
-11%
Copper, t
818
1,483
-45%
1,527
2,838
-46%
Note: (1) Technological recovery, includes gold and copper within
work-in-progress inventory
At Varvara, gold production in Q2 in declined 11% quarter-on-quarter while
copper production grew by 15% as grades and throughput increased moderately at
the float circuit after the plant switched to the run-of-mine ore from
processing stockpiles.
The current weakness in the copper concentrate market led to the accumulation
of excess concentrate stockpiles at Varvara. To prevent further increases in
working capital, the flotation circuit was temporarily switched off in July
with freed grinding capacity diverted to leaching circuit. Copper concentrate
production will be resumed shortly after the current stockpile is sold in
full.
Medium-term mine plan for Varvara has been modified to accommodate increased
processing of leach material with heavy emphasis placed on accelerated
stripping of the South pit.
KHAKANJA
3 months ended Jun 30, % change 6 months ended Jun 30, % change
2014 2013 2014 2013
MINING
Khakanja + Yurievskoye
Waste mined, Kt 1,163 952 +22% 2,377 1,245 +91%
Ore mined, Kt 75 6 NM 82 293 -72%
Open-pit 75 6 NM 82 288 -71%
Underground - - NA - 5 -100%
Avlayakan
Waste mined, Kt - 402 -100% - 783 -100%
Underground development, m 919 - NA 1,985 - NA
Ore mined, Kt 5 26 -80% 8 41 -81%
Open-pit - 26 -100% - 41 -100%
Underground 5 - NA 8 - NA
Ozerny
Waste mined, Kt 1,169 1,192 -2% 2,333 2,203 +6%
Ore mined (open pit), Kt 25 29 -15% 345 140 +148%
TOTAL HUB
Ore mined (open pit), Kt 105 61 +71% 435 473 -8%
PROCESSING
Ore processed, Kt 158 151 +4% 307 302 +2%
Grade
Gold, g/t 3.4 4.1 -17% 3.6 3.9 -8%
Silver, g/t 125 159 -22% 122 167 -27%
Recovery1
Gold 94.9% 95.0% -0% 90.0% 95.1% -5%
Silver 73.9% 84.4% -12% 76.6% 82.9% -8%
TOTAL PRODUCTION
Gold, Koz 16.9 18.8 -10% 32.1 35.3 -9%
Silver, Moz 0.5 0.6 -26% 0.9 1.3 -30%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory (precipitate)
Gold production at Khakanja in Q2 2014 decreased 10% year-on-year to 16.9 Koz,
while silver production was 0.5 Moz, down 26% year-on-year. These decreases
were driven by planned grade declines as the Khakanja mine is nearing
depletion and the feed is complemented by material from lower-grade
stockpiles.
Mining at Ozerny concentrated on waste removal in the preparation for the ore
mining campaign during the winter road operating season.
At Avlayakan, underground development is continuing at a stable pace of
approx. 1 km per quarter and active ore mining from stopes will commence in
Q3. High-grade ore shipment from Avlayakan resumed in July; this should result
in stronger half-on-half gold production in H2 2014.
HEALTH AND SAFETY
The comprehensive safety review the Company launched in response to recent
deterioration in its safety performance is ongoing. SRK Consulting was engaged
to assist Polymetal in assessing the geomechanical aspects at our underground
mines, with actionable recommendations expected to be compiled by the end of
Q3.
OTHER DEVELOPMENTS
On 14 July 2014, Polymetal mailed the circular to shareholders on proposed
acquisition of Kyzyl Project and the General Meeting of Shareholders will take
place on 14 August 2014. In the meantime, Polymetal is making progress on
obtaining the regulatory approvals for the transaction in Kazakhstan and other
conditions precedent to closing of the transaction.
This information is provided by RNS
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