REG-Polymetal International plc Polymetal International plc: Q4 and full year 2018 production results
31/01/2019 07:05
============
Polymetal International plc (POLY)
Polymetal International plc: Q4 and full year 2018 production results
31-Jan-2019 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Release IMMEDIATE
time LSE, MOEX: POLY / ADR: AUCOY
Date 31 January 2019
Polymetal International plc
Q4 and full year 2018 production results
Polymetal International plc reports record production for the fourth quarter and
twelve months ended December 31, 2018.
"The Company had a very strong Q4. Full-year production of 1.56 Moz of gold
equivalent (GE) exceeded the original guidance for the seventh year in a row",
said Vitaly Nesis, Group CEO of Polymetal. "Successful execution at Kyzyl and
the POX debottleneck have already translated into significant production and
free cash flow generation".
HIGHLIGHTS
• The Company's Q4 production jumped 23% year-on-year to a record 497 Koz of
GE on the back of the full ramp-up at Kyzyl. FY2018 GE production of 1,562
Koz was up 9% year-on-year exceeding our original production guidance of
1,550 Koz.
• Following a very smooth ramp-up, Kyzyl delivered a total of 96 Koz of gold
following its launch in June, well above the original 80 Koz guidance. 2019
will be the mine's first full-year of operation at full capacity, with
targeted production of more than 300 Koz.
• In Q4 net debt fell by US $301 million to US$ 1,518 million. Strong cash
flow from seasonal de-stockpiling at Mayskoye supported first revenues from
Kyzyl as well as proceeds from the disposal of non-core assets.
• Following Board approval and the receipt of all necessary government
approvals, open-pit mining and construction have commenced at Nezhda. First
production is expected in Q4 2021.
• Polymetal had no fatalities or major accidents in Q4. Full year safety
statistics also demonstrate a meaningful improvement year-on-year.
• Based on the actual 2018 average Rouble and Tenge exchange rates against the
US dollar, the Company expects full year costs to come in close to the
bottom of the range of its initial cost guidance of US$ 650-700/GE oz for
Total Cash Costs ("TCC") and US$ 875-925/GE oz for All-in Sustaining Cash
Costs ("AISC").
• The Board has decided that there will be no special dividend for 2018 as
free cash flow will be fully distributed to shareholders through the regular
dividend at a payout ratio of 50% of underlying net income. A final dividend
for 2018 will be proposed by the Board in March 2019 based on full-year
financial results.
• The Company will host a POX workshop on 11 February 2019 in London to
provide an update on the Amursk POX-2 project and an overview of the POX
technology.
2019 OUTLOOK
• The Company reiterates its current production guidance of 1.55 Moz and 1.6
Moz of GE for 2019 and 2020, respectively. The first full year of production
at Kyzyl and an increase in grades at Omolon are expected to offset planned
grade declines at Albazino, Voro and Dukat. Traditionally, production in
both years will be weighted towards 2H due to seasonality.
• TCC in 2019 is expected to be in the range of US$ 600-650/ GE oz while AISC
is expected to average US$ 800-850/ GE oz. The anticipated decrease in costs
will primarily be driven by the increasing share of low-cost production from
Kyzyl, as well as the disposal of high-cost Kapan and Okhotsk. The cost
guidance is contingent on the Rouble/Dollar exchange rate and Brent oil
price.
• Capital expenditures in 2019 are expected to be approximately US$ 380
million, in line with the previous guidance. Nezhda and POX-2 (subject to
Board approval) will consume roughly half of the capex budget with the
second half assigned to maintenance capital, capitalised stripping and
exploration.
3 months ended Dec 12 months ended
31, % change1 Dec 31, % change1
2018 2017 2018 2017
Waste mined, Mt 32.2 29.3 +10% 126.7 114.0 +11%
Underground 33.2 31.5 +5% 130.0 115.4 +13%
development, km
Ore mined, Mt 3.8 2.9 +29% 14.0 12.6 +11%
Open-pit 2.6 1.9 +42% 9.3 8.2 +13%
Underground 1.1 1.1 +6% 4.7 4.3 +7%
Ore processed, Mt 3.7 3.0 +24% 15.2 13.0 +16%
Production
Gold, Koz 414 317 +31% 1,216 1,075 +13%
Silver, Moz 5.9 6.6 -11% 25.3 26.8 -6%
Copper, Kt 1.3 0.8 +65% 3.9 2.7 +43%
Zinc, Kt 1.0 1.2 -12% 5.4 4.8 +12%
Gold equivalent, 497 405 +23% 1,562 1,433 +9%
Koz2
Sales
Gold, Koz 432 356 +21% 1,198 1,099 +9%
Silver, Moz 8.3 8.3 +0% 25.7 26.5 -3%
Copper, Kt 1.4 1.3 +11% 3.3 2.6 +30%
Zinc, Kt 1.2 1.2 -3% 5.6 4.7 +20%
Revenue, US$m3 652 586 +11% 1,882 1,815 +4%
Net debt, US$m4 1,518 1,819 -17% 1,518 1,421 +7%
Safety5
LTIFR 0 0.18 -100% 0.09 0.15 -40%
Fatalities 0 1 -100% 1 2 -50%
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 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts.
Comparative information is presented for 30 September 2018 (for the three months
period) and 31 December 2017 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
PRODUCTION BY MINE
3 months % 12 months %
ended Dec 31, change ended Dec 31, change
2018 2017 2018 2017
GOLD EQ. (KOZ)1
Kyzyl 86 - NA 96 - NA
Dukat 75 81 -7% 306 322 -5%
Albazino-Amursk 67 71 -5% 308 269 +15%
Omolon 58 64 -8% 195 202 -4%
Mayskoye 70 35 +102% 117 124 -6%
Varvara 39 42 -8% 142 130 +9%
Voro 29 31 -6% 107 120 -10%
Svetloye 23 22 +7% 136 106 +28%
Okhotsk 35 48 -25% 104 111 -7%
Kapan 13 13 +6% 51 50 +3%
TOTAL 497 405 +23% 1,562 1,433 +9%
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Thursday, 31 January 2019
at 9:00 London time (12:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 58246440# (free from Russia), or
+ 44 203 009 24 83 (free from the UK), or
+ 1 646 502 51 26 (free from the US), or
follow the link: http://polymetal310119-live.audio-webcast.com. Please be
prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website
( 1 www.polymetalinternational.com) and at
http://polymetal310119-live.audio-webcast.com. A recording of the call will be
available immediately after the call at +44 20 3364 51 47 (from within the UK),
+1 646 722 49 69 (USA Toll Free) and +7 495 249 16 71 (from within Russia),
access code 418825014#, from 12:30 Moscow time Thursday, 31 January, till 12:30
Moscow time Thursday, 7 February, 2019.
Enquiries
Media Investor Relations
FTI Polymetal
Consulting 2 ir@polymetalinternational.com
+44 20 Eugenia Onuschenko
Leonid Fink 3727 +44 20 7016 9505 (UK)
1000 Michael
Viktor Vasiliev +7 812 334 3666 (Russia)
Pomichal
Joint
Corporate
Brokers
Morgan
Stanley
+44 20
Andrew 7425
Foster 8000
Richard RBC Europe Limited
Brown
Tristan Lovegrove +44 20 7653 4000
Panmure
Gordon Marcus Jackson
Charles +44 20
Lesser 7886
2500
James
Stearns
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
KYZYL
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Waste mined, Mt 16.1 12.6 +28% 60.9 48.5 +25%
Ore mined (open-pit), 416 - NA 1,249 - NA
Kt
Gold grade, g/t 5.5 - NA
PROCESSING
Ore processed, Kt 478 - NA 914 - NA
Gold grade, g/t 6.6 - NA 5.7 - NA
Gold recovery 85.5% - NA 81.5% - NA
Concentrate produced, 34 - NA 56 - NA
Kt
Concentrate gold grade, 79 - NA 75 - NA
g/t
Gold in concentrate, 86.4 - NA 133.6 - NA
Koz1
Concentrate shipped, Kt 40 - NA 45 - NA
Payable gold shipped, 79.3 - NA 89.3 - NA
Koz
Amursk POX
Concentrate processed, 2 - NA 2 - NA
Kt
Gold grade, g/t 127 - NA 127 - NA
Gold recovery 95.5% - NA 95.5% - NA
Gold produced, Koz 7.0 - NA 7.0 - NA
TOTAL PRODUCTION
Gold, Koz 86.3 - NA 96.3 - NA
Note: (1) For information only; not considered as gold produced and therefore
not reflected in the table representing total production. It will be included in
total production upon shipment to off-taker or dore production at Amursk POX.
Kyzyl delivered a robust performance in Q4, exceeding the initial plan on grade,
throughput and production. Full-year gold production came in at 96 Koz of gold
while gold in concentrate amounted to 134 Koz. The outperformance is mainly
attributable to the softer nature of the rock, as well as the presence of small
high-grade ore pods.
The new railway spur was successfully commissioned on October 19th, with the
pace of railway shipments now running at full capacity.
Offtake agreements for all concentrate production for 2019 successfully secured
despite noticeable tightening of markets in China.
DUKAT OPERATIONS
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Dukat
Waste mined, Mt - - NA - 0.3 -100%
Underground 8.9 8.9 +1% 35.6 33.8 +5%
development, km
Ore mined, Kt 404 393 +3% 1,660 1,652 +0%
Open-pit - - NA - 48 -100%
Underground 404 393 +3% 1,660 1,605 +3%
Grade
Gold, g/t 0.5 0.4 +23%
Silver, g/t 274 306 -10%
Goltsovoye
Underground 1.5 1.8 -18% 6.8 6.9 -2%
development, km
Ore mined 49 47 +5% 193 190 +1%
(underground), Kt
Silver grade, g/t 321 366 -12%
Lunnoye
Underground 3.7 3.3 +11% 13.5 10.3 +31%
development, km
Ore mined 141 143 -1% 568 573 -1%
(underground), Kt
Grade
Gold, g/t 1.6 1.4 +18%
Silver, g/t 284 334 -15%
Perevalnoye
Underground 0.9 1.0 -6% 3.6 3.2 +11%
development, km
Ore mined 1 - NA 5 - NA
(underground), Kt
Silver grade, g/t 152 - NA
TOTAL HUB
Waste mined, Mt - - NA - 0.3 -100%
Underground 15.0 15.0 +0% 59.6 54.3 +10%
development, km
Ore mined, Kt 595 583 +2% 2,426 2,416 +0%
Open-pit - - NA - 48 -100%
Underground 595 583 +2% 2,426 2,368 +2%
PROCESSING
Dukat
Ore processed, Kt 500 517 -3% 1,995 1,979 +1%
Grade
Gold, g/t 0.5 0.5 +8% 0.5 0.4 +24%
Silver, g/t 288 316 -9% 297 321 -7%
Recovery1
Gold 86.7% 86.6% +0% 86.7% 86.3% +0%
Silver 88.0% 88.4% -0% 88.2% 88.6% -0%
Production
Gold, Koz 7.0 6.5 +7% 29.5 24.2 +22%
Silver, Moz 4.0 4.5 -11% 16.4 17.7 -7%
Lunnoye
Ore processed, Kt 116 114 +1% 463 460 +1%
Grade
Gold, g/t 1.5 1.2 +22% 1.3 1.2 +7%
Silver, g/t 318 320 -1% 327 352 -7%
Recovery1
Gold 84.2% 87.5% -4% 85.1% 90.3% -6%
Silver 91.7% 93.3% -2% 91.3% 92.8% -2%
Production
Gold, Koz 4.6 4.0 +13% 16.7 16.8 -0%
Silver, Moz 1.1 1.1 -6% 4.4 4.8 -9%
TOTAL PRODUCTION
Gold, Koz 11.5 10.5 +10% 46.2 41.0 +13%
Silver, Moz 5.1 5.6 -10% 20.8 22.5 -8%
Underground mines at Dukat, Goltsovoye and Lunnoye continued to operate at full
capacity during the quarter, which translated into a slight increase in ore
mined volumes year-on-year.
Q4 gold production at the Dukat hub was up 10% over the prior year period, while
full-year production was up 13% as the Omsukchan concentrator continued to
process ore from gold-rich veins at the deeper levels of Dukat and from Lunnoye.
Quarterly silver production fell 10% year-on-year, while full-year production
was down 8% on the back of planned grade declines at the underground mine.
At Lunnoye, quarterly processing volumes remained flat, while gold production
increased by 13% year-on-year as higher grade material from Zone 5 was processed
through the mill, making up for the decline in recovery levels. Silver
production on the other hand, was down 6% to 1.1 Moz, which is mostly
attributable to depletion of high-grade areas of Zone 7.
Goltsovoye mine is approaching the end of its economic life with underground
development expected to cease in Q3 2019 and ore mining to end in early 2020.
At Perevalnoye, positive exploration results led to a significant increase in
average ore body widths and reserve tonnage. This prompted a re-consideration of
the previously proposed underground mining method. As a result, the start of
stoping has been delayed and will commence in Q4 2019.
ALBAZINO-AMURSK
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Waste mined, Mt 5.4 5.0 +8% 21.3 19.6 +9%
Underground 2.3 2.2 +8% 9.2 7.8 +19%
development, Km
Ore mined, Kt 412 365 +13% 1,784 1,832 -3%
Open-pit 317 295 +7% 1,379 1,512 -9%
Underground 95 70 +36% 405 320 +27%
Gold grade, g/t 5.2 4.7 +10%
Open-pit 5.2 4.7 +12%
Underground 5.0 4.9 +0%
PROCESSING
Albazino concentrator
Ore processed, Kt 432 434 NA 1,724 1,725 -0%
Gold grade, g/t 5.6 5.1 +8% 5.3 4.9 +8%
Gold recovery1 86.2% 87.5% -1% 85.7% 87.5% -2%
Concentrate produced, 37.4 35.2 +6% 143.1 140.9 +2%
Kt
Concentrate gold grade, 55.2 54.8 +1% 54.5 52.3 +4%
g/t
Gold in concentrate, 66.4 62.0 +7% 250.7 237.2 +6%
Koz2
Amursk POX
Concentrate processed, 39 40 -3% 170 154 +11%
Kt
Gold grade, g/t 55.2 58.6 -6% 56.9 58.3 -2%
Gold recovery 96.2% 97.2% -1% 96.7% 96.4% +0%
Gold produced, Koz 67.5 71.2 -5% 307.9 268.5 +15%
TOTAL PRODUCTION
Gold, Koz 67.5 71.2 -5% 307.9 268.5 +15%
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 after dore production at the Amursk POX
At Albazino, waste stripping started at the new Ekaterina-2 open pit.
Underground mine productivity continued to improve following the full transition
to partially cemented waste backfill. The new mining method had a positive
impact on grades that offset slightly lower recovery levels impacted by
near-surface partially oxidized ore from Ekaterina-1. As a result, both
quarterly and yearly gold in concentrate volumes were up 7% and 6%,
respectively.
Full-year production was up 15% to a record 308 Koz of gold on the back of
higher processing volumes. The downtick in quarterly gold production is due to
the 20-day debottlenecking and maintenance shutdown that was successfully
completed early in Q4.
Underground development started at the new Ekaterina-2 underground mine. Ore
mining is expected to commence in Q4 2019.
AMURSK POX
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
Concentrate processed, 45 40 +12% 176 160 +10%
Kt
Albazino 31 36 -12% 147 137 +7%
Purchased 8 5 +68% 23 16 +43%
feedstock1
Mayskoye 4 - NA 5 6 -26%
Kyzyl 2 - NA 2 - NA
Total gold produced2, 81.2 71.2 +14% 322.3 279.6 +15%
Koz
Notes: (1) Included in reportable production at Albazino
(2) For information only. Already accounted for in production at
operating mines.
At Amursk POX, the debottlenecking project was successfully completed with all
new sections now operating at full capacity. Low-carbon Kyzyl concentrate was
introduced to the feed during the quarter, achieving recovery of 96%, in line
with design parameters.
OMOLON OPERATIONS
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Sopka
Waste mined, Mt 1.5 2.2 -28% 6.1 6.4 -5%
Ore mined (open pit), 227 37 +511% 627 261 +140%
Kt
Grade
Gold, g/t 2.7 3.7 -26%
Silver, g/t 104 117 -12%
Tsokol
Underground 1.0 0.9 +6% 3.5 3.8 -7%
development, Km
Ore mined 43 47 -7% 152 153 -0%
(underground), Kt
Gold grade, g/t 7.3 10.4 -29%
Birkachan
Underground 1.3 1.1 +18% 5.0 4.5 +11%
development, Km
Ore mined 49 31 +60% 143 114 +25%
(underground), Kt
Gold grade, g/t 9.7 7.6 +28%
Oroch
Waste mined, Mt - - NA - 0.1 -100%
Ore mined (open pit), - - NA - 81 -100%
Kt
Grade
Gold, g/t - 2.3 -100%
Silver, g/t - 164 -100%
Olcha
Waste mined, Mt - - NA - 0.2 -100%
Underground 0.9 0.9 +4% 4.3 3.2 +36%
development, Km
Ore mined, Kt 36 10 +264% 92 83 +11%
Open pit - - NA - 73 -100%
Underground 36 10 +264% 92 10 +818%
Gold grade, g/t 9.7 5.6 +74%
TOTAL HUB
Waste mined, Mt 1.5 2.2 -28% 6.1 6.7 -9%
Underground 3.2 2.9 +10% 12.9 11.5 +12%
development, Km
Ore mined, Kt 356 125 +186% 1,014 692 +47%
Open-pit 227 37 +511% 627 415 +51%
Underground 129 88 +47% 387 277 +40%
PROCESSING
Birkachan Heap Leach
Ore stacked, Kt 39 96 -60% 997 459 +117%
Gold grade, g/t 1.1 1.3 -17% 1.1 1.3 -13%
Gold recovery 84.8% 90.1% -6%
Gold production, Koz 3.0 1.0 +193% 12.9 4.4 +190%
Kubaka Mill
Ore processed, Kt 220 212 +4% 862 858 +1%
Grade
Gold, g/t 8.2 9.2 -11% 5.7 6.7 -15%
Silver, g/t 37 46 -21% 98 90 +9%
Recovery1
Gold 95.7% 94.4% +1% 95.5% 94.2% +1%
Silver 75.4% 79.1% -5% 86.4% 83.9% +3%
Gold production, Koz 52.9 58.6 -10% 152.7 172.0 -11%
Silver production, Moz 0.2 0.3 -33% 2.3 2.1 +14%
TOTAL PRODUCTION
Gold, Koz 55.8 59.6 -6% 165.5 176.4 -6%
Silver, Moz 0.2 0.3 -33% 2.3 2.1 +14%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
Full-year gold production at Omolon was 166 Koz, down 6% over 2017 on the back
of grade declines at the Kubaka mill which were partially offset by ramp-up to
full capacity at the Birkachan heap leach. The grade dynamics is largely driven
by the increased share of lower grade ore from the Sopka open pit as the Tsokol
underground mine is winding down ahead of the expected pillar removal operations
in 2019-2020.
Mining activities at the Birkachan underground mine ramped up with ore mined
volumes up year-on-year. A trial run of an underground digital fleet management
system commenced at Birkachan. The system enables the analysis of operating data
from trucks, loaders, and drill rigs in real time.
At the Yolochka satellite deposit (80 km from the Kubaka mill) mining from the
open pit is expected to start in Q2.
MAYSKOYE
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Waste mined, Mt 1.4 0.4 +291% 5.0 4.4 +13%
Underground 6.4 5.3 +20% 23.9 19.7 +21%
development, km
Ore mined, Kt 239 178 +34% 1,005 944 +7%
Open-pit 91 17 +436% 372 225 +65%
Underground 148 161 -8% 633 719 -12%
Grade, g/t 6.4 6.3 +1%
Open-pit 8.0 9.6 -17%
Underground 5.5 5.3 +4%
PROCESSING
Ore processed, Kt 221 62 +254% 861 711 +21%
Sulphide ore 221 62 +254% 491 632 -22%
Oxide ore - - NA 370 79 +367%
Gold grade, g/t 5.9 5.3 +11% 7.1 5.9 +21%
Sulphide ore 5.9 5.3 +11% 5.5 5.4 +3%
Oxide ore - - NA 9.2 9.9 -7%
Gold recovery 85.2% 90.0% -5% 76.8% 87.0% -12%
Sulphide ore 85.2% 90.0% -5% 86.6% 87.7% -1%
Oxide ore - - NA 69.0% 46.9% +49%
Gold in concentrate, 35.6 9.6 +270% 119.8 96.4 +24%
Koz2
Concentrate shipped, Kt 25.4 23.6 +8% 55.2 62.9 -12%
Amursk POX
Concentrate processed, 4.0 - NA 4.6 6.1 -26%
Kt
Gold grade, g/t 53.0 - NA 52.7 49.6 +6%
Gold recovery 96.1% - NA 96.1% 96.2% -0%
Gold produced in dore
from concentrate (POX), 6.7 - NA 7.4 11.1 -33%
Koz
Gold produced in dore 23.5 - NA 24.6 - NA
from carbon, Koz3
Payable gold in
concentrate shipped, 39.6 34.6 +14% 84.9 101.7 -17%
Koz
TOTAL PRODUCTION
Gold, Koz 69.8 34.6 +102% 116.9 124.1 -6%
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 dore production at Amursk POX
(3) Gold produced from carbon at Voro and Amursk POX
Underground development at Mayskoye continued to increase as the new mine level
(400 m below surface) is prepared for the start of stoping in Q1 2019.
Oxide ore processing through the combined float-leach circuit delivered solid
full-year results with a significant improvement over the previous year.
Recoveries were in line with the metallurgical test work. Oxide ore treatment
will re-commence in Q2 2019.
VARVARA
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Varvara
Waste mined, Mt 1.9 1.5 +27% 7.2 9.6 -25%
Ore mined, Kt 303 191 +58% 870 1,261 -31%
Grade
Gold, float ore, g/t 1.2 1.0 +26%
Copper, float ore, % 0.59% 0.52% +15%
Gold, leach ore, g/t 1.2 1.0 +27%
Komarovskoye
Waste mined, Mt 5.0 5.1 -3% 21.5 14.2 +51%
Ore mined, Kt 561 619 -9% 2,268 1,982 +14%
Gold grade, g/t 1.4 1.5 -9%
PROCESSING
Flotation
Ore processed, Kt 159 96 +65% 456 288 +58%
Grade
Gold, g/t 2.6 1.3 +96% 3.3 1.9 +70%
Copper 0.59% 0.52% +14% 0.48% 0.61% -22%
Recovery1
Gold 78.5% 52.2% +50% 72.5% 64.3% +13%
Copper 92.5% 84.0% +10% 92.2% 83.1% +11%
Production
Gold (in concentrate), 4.3 2.0 +119% 11.7 9.2 +28%
Koz
Copper (in 0.9 0.4 +121% 2.4 1.4 +68%
concentrate), Kt
Veduga ore toll 22 11 +100% 108 102 +6%
processed, Kt2
Leaching
Ore processed, Kt 755 749 +1% 3,079 2,890 +7%
Gold grade, g/t 1.4 1.9 -28% 1.4 1.4 -3%
Gold recovery1 89.1% 85.8% +4% 88.1% 83.4% +6%
Gold production (in 29.7 38.1 -22% 118.2 113.9 +4%
dore), Koz
Total ore processed, Kt 936 856 +9% 3,642 3,279 +11%
TOTAL PRODUCTION
Gold, Koz 34.0 40.1 -15% 129.9 123.1 +6%
Copper, Kt 0.9 0.4 +121% 2.4 1.4 +68%
Note: (1) Technological recovery, includes gold and copper within
work-in-progress inventory. Does not include toll-treated ore
(2) To be further processed at Amursk POX.
Full-year production at Varvara totalled 130 Koz of gold, an increase of 6%
year-on-year. This was primarily driven by growing processing volumes as Komar
railing capacity continues to improve.
Waste stripping started at the new Riverside pit at Varvara with first ore
expected in Q2 2019.
Gold recoveries in the leaching circuit continued to improve thanks to the
detailed geo-metallurgical mapping of Komar ore followed by the introduction of
flexible reagent additions earlier in the year. Copper float recoveries jumped
dramatically as less oxidized ore from lower levels of the Central pit
substituted for material from North-Eastern pit.
VORO
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Voro
Waste mined, Mt 0.6 2.6 -78% 3.4 10.3 -67%
Ore mined, Kt 371 394 -6% 1,150 1,553 -26%
Gold grade
Primary, g/t 3.5 3.4 +5%
Oxidised, g/t 3.2 1.4 +121%
PROCESSING
Voro Heap Leach
Ore stacked, Kt - 55 -100% 62 358 -83%
Gold grade, g/t - 1.1 -100% 1.4 1.2 +19%
Gold recovery 73.2% 73.0% +0%
Gold production, 1.8 5.2 -65% 7.6 16.8 -55%
Koz
Voro CIP
Ore processed, Kt 251 250 +0% 1,003 1,002 +0%
Gold grade, g/t 3.7 3.5 +6% 3.9 4.0 -4%
Gold recovery1 81.8% 77.9% +5% 81.0% 80.1% +1%
Gold production, 26.6 25.1 +6% 98.8 101.6 -3%
Koz
TOTAL PRODUCTION
Gold, Koz 28.4 30.3 -6% 106.4 118.4 -10%
Note: (1) Technological recovery, includes gold within work-in-progress
inventory
Gold production at Voro in Q4 decreased 6% year-on-year due to lower ore grades
and smaller contributions from the heap leach operation that shifted to residual
leaching.
Mining volumes continued to decline as the open pit nears depletion, which is
expected in Q3 2019. Exploration drilling identified substantial mineralization
below the open pit with technical studies currently underway to determine the
feasibility of underground mining.
SVETLOYE
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Waste mined, Mt 0.2 0.1 +104% 0.7 0.4 +59%
Ore mined (open pit), 339 311 +9% 1,317 1,246 +6%
Kt
Gold grade, g/t 3.8 3.7 +2%
PROCESSING
Ore stacked, Kt 234 132 +77% 1,378 1,054 +31%
Gold grade, g/t 3.5 2.8 +24% 3.7 4.4 -15%
Gold recovery 80.7% 80.7% +0%
Gold production, Koz 23.3 21.9 +7% 135.3 105.6 +28%
TOTAL PRODUCTION
Gold, Koz 23.3 21.9 +7% 135.3 105.6 +28%
Svetloye delivered a solid set of both quarterly and yearly results on the back
of higher stacking volumes that offset minor grade declines. Gold production in
Q4 was up 7% at 23.3 Koz, while full-year production jumped 28% to 135 Koz.
Successful step-out drilling at the Emy pit and positive metallurgical test work
for the material from the nearby Levoberezhny property indicate potential to
extend the life-of-mine of Svetloye by approximately four years to 2028.
OKHOTSK OPERATIONS (sold in December 2018)
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2018 2017 2018 2017
MINING
Avlayakan
Underground - 1.4 -100% 2.2 5.2 -57%
development, km
Ore mined - 39 -100% 131 137 -4%
(underground), Kt
Grade
Gold, g/t 13.7 15.9 -14%
Silver, g/t 101 147 -31%
Khotorchan
Waste mined, Mt 0.1 - NA 0.6 - NA
Ore mined (open pit), 15 - NA 86 - NA
Kt
Gold grade, g/t 8.6 - NA
PROCESSING
Khakanja
Ore processed, Kt 156 155 +0% 625 623 +0%
Grade
Gold, g/t 6.1 7.9 -22% 4.4 4.7 -7%
Silver, g/t 111 124 -10% 101 111 -9%
Recovery1
Gold 96.8% 97.2% -0% 97.1% 97.0% +0%
Silver 84.4% 84.1% +0% 80.3% 78.6% +2%
Gold production, Koz 29.8 41.7 -28% 83.4 90.4 -8%
Silver production, Moz 0.5 0.5 -7% 1.6 1.7 -1%
TOTAL PRODUCTION
Gold, Koz 29.8 41.7 -28% 83.4 90.4 -8%
Silver, Moz 0.5 0.5 -7% 1.6 1.7 -1%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory (precipitate)
At Okhotsk, Q4 gold production levels were down 28% year-on-year, with full-year
production down 8%. The decrease is primarily due to declining grades as the
Khakanja mill processed remaining material.
In December, Okhotsk was sold for a total consideration of US$ 30 million. For
more details, please refer to the transaction announcement dated 17 December
2018.
KAPAN (sold in January 2019)
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2018 2017 2018 2017
MINING
Kapan
Underground 5.7 4.7 +22% 19.9 16.9 +17%
development, km
Ore mined 168 140 +19% 637 527 +21%
(underground), Kt
Grade
Gold, g/t 1.8 2.2 -19%
Silver, g/t 30 39 -22%
Copper, % 0.30% 0.30% -0%
Zinc, % 1.32% 1.31% +0%
Lichkvaz
Underground 0.6 - NA 2.3 - NA
development, km
Ore mined 12 - NA 40 - NA
(underground), Kt
Grade
Gold, g/t 2.9 - NA
Silver, g/t 23.1 - NA
Copper, % 0.42% - NA
PROCESSING
Ore processed, Kt 166 141 +18% 636 530 +20%
Grade
Gold, g/t 2.0 2.2 -9% 1.9 2.2 -13%
Silver, g/t 25 33 -23% 30 39 -23%
Copper, % 0.31% 0.34% -10% 0.30% 0.30% -1%
Zinc, % 1.07% 2.41% -56% 1.29% 1.30% -1%
Recovery
Gold 67.1% 79.8% -16% 78.2% 83.6% -6%
Silver 76.7% 82.1% -6% 81.7% 83.0% -2%
Copper 87.5% 93.6% -7% 93.0% 92.3% +1%
Zinc 81.5% 85.5% -5% 85.3% 89.1% -4%
TOTAL PRODUCTION
Gold, Koz 7.8 6.9 +13% 27.8 28.0 -1%
Silver, Moz 0.1 0.1 +0% 0.4 0.5 -7%
Copper, Kt 0.4 0.4 +6% 1.5 1.3 +15%
Zinc, Kt 1.0 1.2 -12% 5.4 4.8 +12%
Q4 gold production at Kapan increased 13% year-on-year to 7.8 Koz due to higher
processing volumes that largely offset lower recoveries and grade declines as
the plant was treating third-party purchased ore and trialled the processing of
feed from Lichkvaz. Full-year production remained relatively flat at 28 Koz,
while gold equivalent production was up 3% year-on-year at 51 Koz.
The previously announced sale of Kapan has been completed on 30 January 2019.
NEZHDA
At Nezhda, construction activities have commenced and are currently focused on
auxiliary infrastructure, including the fuel depot, explosives depot, process
and potable water boreholes, as well as the warm warehouse. Earthworks for the
processing plant have also started while the Company has completed the
construction of two new dormitories and an administrative building.
Mining activities in the wintertime are limited to pit access road construction
which requires significant amount of overburden removal.
SUSTAINABILITY, HEALTH AND SAFETY
Our LTIFR in Q4 stood at 0 (versus 0.18 in Q4 2017), which is an important
achievement for the Company. At the same time, our full-year LTIFR decreased by
40% over 2017 with a total of 11 incidents recorded across the Group (16
incidents in 2017).
The Company has also advanced in transiting its environmental management system
to the new ISO 14001:2015 standard, which has gone through an external audit in
2018. There were zero material environmental incidents in 2018.
Safety remains a top priority for Polymetal and the Company reaffirms its
commitment to further improvements across health and safety metrics to achieve
our zero harm target in relation to our employees, as well as our suppliers and
contractors. Polymetal continues to invest in digital technologies and
innovative practices to achieve greater levels of safety, efficiency, and
productivity. Details of the implemented safety and employee welfare initiatives
are set out in the Sustainability Report, which can be found on our website.
PERSONNEL
Vasilina Tarabarova (37) assumed the position of Managing Director at Svetloye
after Konstantin Lemanov (41) stepped down for personal reasons. Ms. Tarabarova
has been with Polymetal since 2005, most recently as VP-Finance for the combined
Okhotsk operations (Svetloye and Khakanja). She is the first female Managing
Director of an operating asset in Polymetal's history.
Yury Ovchinnikov (47) was appointed as EVP of Supply Chain Management (SCM) at
Polymetal, effective January 2019, Yury has been with the Company from 2006 and
worked at our Voro, Amursk and Varvara operations in the SCM roles. He assumed
the position of Managing Director at Kyzyl in 2014 and successfully led the
on-site development team.
Kenbeyil Isaev (54) succeeded Yuriy Ovchinnikov as Managing Director at Kyzyl.
Before joining Polymetal in 2014 as Chief Engineer at Kyzyl, Mr. Isaev held
various senior positions at Kazakhmys starting from 1997.
Vladimir Bloshkin (60) was appointed Director of Polymetal's Magadan regional
office after Gennadiy Kuzmenko (47) stepped down for personal reasons. Mr.
Bloshkin joined Polymetal in 2007 as an underground mine superintendent at
Lunnoye (Dukat operations). In 2012 Vladimir assumed the Managing Director
position at Omolon.
Samat Kozhakaev (43) succeeded Vladimir Bloshkin as Managing Director at Omolon.
Samat joined Polymetal in 2012 as Chief Engineer at Lunnoye and in 2014 was
promoted to Site Director at Dukat. Prior to Polymetal, Samat spent many years
working in various engineering positions in the mining industry in Kazakhstan.
════════════════════════════════════════════════════════════════════════════════
ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
Sequence No.: 7303
EQS News ID: 771221
End of Announcement EQS News Service
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