REG-Polymetal International plc Polymetal: Q1 2023 production results
10/05/2023 07:15
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Polymetal International plc (POLY)
Polymetal: Q1 2023 production results
10-May-2023 / 09:01 MSK
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Release time IMMEDIATE LSE, MOEX, AIX: POLY
Date 10 May 2023 ADR: AUCOY
Polymetal International plc
Q1 2023 production results
Polymetal reports production results for the first quarter ended March 31,
2023.
“Q1 saw continued metal inventory release and positive revenue dynamics.
Management is optimistic that the unwinding of saleable inventory will be
substantially completed by the end of Q2 2023. Quarterly production was in
line with our plan and we confirm our full-year guidance of 1.7 Moz of
GE”, said Vitaly Nesis, Group CEO of Polymetal.
HIGHLIGHTS
• No fatal accidents occurred among the Group’s workforce and
contractors in Q1 2023 (consistent with Q1 2022). Lost time injury
frequency rate (LTIFR) among the Group’s employees decreased by 10%
year-on-year (y-o-y) to 0.09. During Q1 2023, one medium-severity
incident and two minor incidents were recorded.
• Q1 gold equivalent (“GE”) production decreased by 5% y-o-y to 345 Koz.
Increases at Nezhda and Albazino (Kutyn) were offset by grade-driven
production slump at Dukat as well as the build-up of concentrate
inventory at Kyzyl and Varvara.
• Revenue for the quarter was up by 19% y-o-y to US$ 733 million as
sales channels stabilized, with reduction in stockpiles taking full
advantage of higher gold prices.
• Net Debt was broadly flat during the quarter as the release of
inventory was offset by traditional seasonal payments for winter road
deliveries, fuel supplies, and annual bonuses.
• The Company now expects POX-2 start-up in H2 2024 (previously Q2
2024). Urals flotation and Prognoz (ore mining) are on track to launch
in Q2 2023.
• Polymetal reiterates its 2023 production guidance of 1.7 Moz of GE,
and also maintains the full-year cost guidance of US$ 950-1,000/GE oz
for TCC and US$ 1,300-1,400/GE oz for AISC. The cost guidance remains
contingent on the Russian rouble and Kazakh tenge exchange rate
dynamics.
OPERATING HIGHLIGHTS
3 months ended Mar 31, % change1
2023 2022
Waste mined, Mt 44.1 55.0 -20%
Underground development, km 23.8 23.9 -0%
Ore mined, Mt 3.4 4.3 -21%
Open-pit 2.4 3.3 -28%
Underground 1.0 1.0 +1%
Ore processed, Mt 4.5 4.1 +11%
Average GE grade processed, 3.2 3.5 -7%
g/t
Production
Gold, Koz* 296 306 -3%
Silver, Moz 3.9 4.5 -13%
Gold equivalent, Koz2 345 362 -5%
Sales
Gold, Koz 318 268 +19%
Silver, Moz 6.4 4.4 +48%
Revenue, US$m3 733 616 +19%
Net debt, US$m4 2,428 2,393 +1%
Safety
LTIFR (Employees)5 0.09 0.10 -10%
Fatalities 0 0 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 80:1 Au/Ag conversion ratio and excluding base metals.
Discrepancies in calculations are due to rounding.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts.
Comparative information is presented for 31 December 2022.
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
Company employees only are taken into account.
(6) DIS – days lost due to work-related injuries. Company employees only
are taken into account.
PRODUCTION BY MINE
3 months ended Mar 31, %
2023 2022 change
GOLD EQ. (KOZ)1
Kazakhstan 115 139 -17%
Kyzyl 71 82 -13%
Varvara 44 57 -23%
Russia 229 223 +3%
Albazino 65 56 +16%
Dukat 50 66 -25%
Omolon 46 40 +17%
Nezhda 36 20 +79%
Svetloye 18 19 -3%
Voro 13 20 -23%
Mayskoye 1 3 -69%
TOTAL 345 362 -5%
Notes: (1) Based on 80:1 Au/Ag conversion ratio and excluding base metals.
Discrepancies in calculations are due to rounding.
CONFERENCE CALL AND WEBCAST
The Group’s management will discuss the Q1 2023 production results and the
proposed re-domiciliation during the Analyst and Investor Briefing on
Wednesday, 10 May, 2023, at 10:00 BST (12:00 Moscow time, 15:00 Astana
time) at the etc.venues, 8 Fenchurch Pl, London EC3M 4PB. To join the
webcast please follow the link:
1 https://event.on24.com/wcc/r/4215044/57F84C60B29C3706B85933B505CAF446.
Enquiries
Investor Relations
Polymetal 2 ir@polymetalinternational.com
Evgeny Monakhov +44 20 7887 1475 (UK)
Kirill Kuznetsov +7 812 334 3666 (Russia)
+7 717 261 0222 (Kazakhstan)
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 Mar 31, % change
2023 2022
MINING
Waste mined, Mt 20.0 20.7 -3%
Ore mined (open-pit), Kt 518 584 -11%
PROCESSING
Ore processed, Kt 560 551 +2%
Gold grade, g/t 5.2 4.8 +9%
Gold recovery 88.5% 87.7% +1%
Concentrate produced, Kt 30.0 24.8 +21%
Concentrate gold grade, g/t 86.7 91.6 -5%
Gold in concentrate, Koz1 84 73 +14%
Concentrate shipped, Kt 8.8 10.8 -19%
Payable gold shipped, Koz 16 20 -19%
Amursk POX
Concentrate processed, Kt 14 14 +7%
Gold grade, g/t 125.4 132.6 -5%
Gold recovery 93.6% 94.6% -1%
Gold produced, Koz 55 62 -11%
TOTAL PRODUCTION
Gold, Koz 71 82 -13%
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.
At Kyzyl, reported gold production for the quarter was down by 13% y-o-y
to 71 Koz due to persistent railway congestion in eastward direction. As a
result, concentrate shipments to both Amursk POX and China have been
delayed. The management is evaluating alternative shipment routes and
approaches, including trucking, to resolve the backlog.
Meanwhile, gold in concentrate increased by 14% on the back of
improvements in grade, throughput, and recovery. The Company expects the
annual throughput of the concentrator to reach 2.4 Mtpa this year.
VARVARA
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 10.6 11.0 -3%
Ore mined, Kt 782 957 -18%
PROCESSING
Leaching
Ore processed, Kt 768 769 -0%
Gold grade, g/t 1.4 1.7 -14%
Gold recovery1 89.1% 89.6% -1%
Gold production (in dore), Koz 34 45 -24%
Flotation
Ore processed, Kt 189 179 +6%
Gold grade, g/t 2.2 2.8 -23%
Recovery1 85.1% 88.5% -4%
Gold in concentrate, Koz 10 11 -17%
TOTAL PRODUCTION
Gold, Koz 44 57 -23%
Note:
(1) Technological recovery, includes gold and copper within
work-in-progress inventory. Does not include toll-treated ore.
At Varvara, Q1 gold production contracted by 23% y-o-y to 44 Koz on the
back of the planned decline in Komar ore grade as well as substantial
work-in-progress release in Q1 2022. At the flotation circuit, the output
was also down driven by a lower share of high-grade third-party feed.
ALBAZINO
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 7.3 7.2 +1%
Underground development, km 4.3 4.6 -7%
Ore mined, Kt 634 772 -18%
Open-pit 437 569 -23%
Underground 197 203 -3%
PROCESSING
Albazino concentrator
Ore processed, Kt 441 453 -3%
Gold grade, g/t 3.1 3.2 -5%
Gold recovery1 83.5% 86.7% -4%
Concentrate produced, Kt 33.0 32.3 +2%
Concentrate gold grade, g/t 34.8 39.0 -11%
Gold in concentrate, Koz2 38 41 -7%
Kutyn Heap Leach
Ore stacked, Kt 380 - NA
Gold grade, g/t 2.5 - NA
Gold production, Koz 24 - NA
Amursk POX
Concentrate processed, Kt 36.9 43.2 -15%
Gold grade, g/t 33.3 44.3 -25%
Gold recovery 96.5% 96.5% +0%
Gold produced, Koz 41 56 -27%
TOTAL PRODUCTION
Gold, Koz 65 56 +16%
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, gold production increased by 16% y-o-y to 65 Koz driven by
the contribution from Kutyn Heap Leach launched in the late Q3 2022. Gold
production from Albazino concentrate at Amursk POX alone fell by 27% y-o-y
as the high-grade Anfisa open pit was fully depleted in H2 2022 resulting
in the scheduled grade decline.
Open-pit ore mined decreased as planned due to the completion of mining at
Anfisa and Ekaterina-2.
DUKAT OPERATIONS
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 0.5 0.9 -45%
Underground development, km 11.0 11.6 -5%
Ore mined, Kt 598 633 -6%
Open-pit 68 107 -36%
Underground 530 527 +1%
PROCESSING
Omsukchan concentrator
Ore processed, Kt 491 515 -5%
Grade
Gold, g/t 0.3 0.7 -50%
Silver, g/t 201 249 -19%
Recovery1
Gold 82.6% 83.7% -1%
Silver 85.9% 84.9% +1%
Production
Gold, Koz 4 9 -53%
Silver, Moz 2.6 3.4 -23%
Lunnoye plant
Ore processed, Kt 119 115 +4%
Grade
Gold, g/t 1.5 1.9 -23%
Silver, g/t 170 185 -8%
Recovery1
Gold 91.5% 91.5% +0%
Silver 92.9% 92.7% +0%
Production
Gold, Koz 5 6 -20%
Silver, Moz 0.6 0.7 -6%
TOTAL PRODUCTION
Gold, Koz 9 15 -39%
Silver, Moz 3.2 4.0 -20%
Notes:
(1) Technological recovery, includes gold and silver within
work-in-progress inventory.
Silver and gold production at Dukat decreased driven by declining grades
after the high-grade open pit was fully depleted. There was no reported
production from Primorskoye in the quarter, ore shipment will recommence
following the start of sea navigation in June.
OMOLON
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 1.7 1.8 -5%
Underground development, Km 2.8 3.0 -7%
Ore mined, Kt 218 104 +110%
Open-pit 86 - NA
Underground 133 104 +27%
PROCESSING
Kubaka Mill
Ore processed, Kt 213 212 +1%
Grade
Gold, g/t 6.7 5.8 +16%
Silver, g/t 19 24 -21%
Recovery1
Gold 93.7% 92.9% +1%
Silver 77.6% 75.8% +2%
Gold production, Koz 43 37 +17%
Silver production, Moz 0.1 0.1 -15%
Birkachan Heap Leach
Ore stacked, Kt 55 - NA
Gold grade, g/t 1.1 - NA
Gold production, Koz 2 1 +37%
TOTAL PRODUCTION
Gold, Koz 45 38 +18%
Silver, Moz 0.1 0.1 -14%
Note:
(1) Technological recovery, includes gold and silver within
work-in-progress inventory.
In Q1, gold production at Omolon grew by 18% y-o-y to 45 Koz on the back
of the increased share of higher-grade ore from the Burgali open pit in
the Kubaka mill’s feed.
First ore from the Burgali underground is expected in Q2. Underground
mining at Tsokol was completed. Underground workings will be flooded in
line with a pre-approved reclamation plan.
NEZHDA
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 0.6 4.9 -87%
Ore mined, Kt 137 604 -77%
PROCESSING
Ore processed, Kt 511 484 +5%
Grade
Gold, g/t 3.1 3.7 -17%
Silver, g/t 33.8 30.5 +11%
Recovery1
Gold 70.6% 73.2% -4%
Silver 79.9% 74.7% +7%
Gold in concentrate, Koz 36 42 -14%
Silver in concentrate, Moz 0.5 0.4 +27%
Concentrate shipped, Kt 23 1 NM
Payable gold in concentrate, Koz 24 16 +51%
Payable silver in concentrate, 0.5 0.2 +93%
Moz
Gold produced in dore, Koz 6 1 NM
TOTAL PRODUCTION
Gold, Koz 31 17 +77%
Silver, Moz 0.5 0.2 +93%
Notes:
(1) Includes concentrate produced and stockpiled for future sale, and
excludes low-grade material. Expected 90% gold payable ratio is applied.
At Nezhda, gold grade and recovery declined as processing focused on
previously stockpiled oxidised ore and mining was halted for almost entire
quarter to reduce costs.
However, total production of gold grew by 77% y-o-y to 31 Koz due to
larger volumes of concentrate shipped to off-takers and processed at POX.
Dore from gravity and low-carbon flotation concentrates was produced
in-house at Dukat, Voro, and Amursk POX.
SVETLOYE
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 1.7 1.6 +4%
Ore mined (open pit), Kt 199 369 -46%
PROCESSING
Ore stacked, Kt 312 312 -0%
Gold grade, g/t 2.6 1.9 +38%
Gold production, Koz 18 19 -3%
TOTAL PRODUCTION
Gold, Koz 18 19 -3%
At Svetloye, gold production marginally decreased y-o-y and stood at 18
Koz. Average grade at the heap leach was substantially higher relative to
the low base of Q1 2022, when stacking of stockpiled low-grade ore from
the depleted Lyudmila main pit took place.
VORO
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt 1.7 3.4 -50%
Ore mined, Kt 151 76 +99%
PROCESSING
CIP
Ore processed, Kt 262 246 +6%
Gold grade, g/t 1.9 2.1 -9%
Gold recovery1 78.5% 85.7% -8%
Gold production, Koz 11.9 18 -34%
Heap Leach
Gold production, Koz 1 1 +11%
TOTAL PRODUCTION
Gold, Koz 13 19 -35%
Note:
(1) Technological recovery, includes gold within work-in-progress
inventory.
Voro recorded a 35% y-o-y decline in production on the back of decreasing
volumes of the higher-grade Pesherny ore in the CIP feed, while its lower
recovery also depressed the average recovery at the CIP plant.
Ore mining at Pesherny accelerated in anticipation of the launch of the
Voro flotation plant which is scheduled for June 2023. Wet commissioning
at Voro flotation has already commenced.
MAYSKOYE
3 months ended Mar 31, % change
2023 2022
MINING
Waste mined, Mt - 1.0 -100%
Underground development, km 5.7 4.7 +21%
Ore mined, Kt 162 195 -17%
Open-pit - 13 -100%
Underground 162 183 -11%
PROCESSING
Ore processed, Kt 226 230 -1%
Gold grade, g/t 5.2 5.6 -8%
Gold recovery1 92.0% 90.8% +1%
Gold in concentrate, Koz2 35 38 -8%
Amursk POX
Gold produced in dore from - 2 -100%
concentrate, Koz
Gold produced in dore from 1 1 -28%
carbon, Koz3
TOTAL PRODUCTION
Gold, Koz 1 3 -69%
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 Amursk POX.
At Mayskoye, gold in concentrate produced inQ1 recorded a y-o-y decrease
due to processing of larger volumes of lower grade stockpiles. The Company
expects production to normalise over the course of 2023.
The expansion of the scope of sanctions to include additional materials
and equipment under the tenth EU/UK sanctions package is expected to have
an adverse impact on the Mayskoye backfill project. The estimated start-up
will likely be delayed for up to 9 months from the initial plan of Q3
2024, as some critical items will need to be re-sourced from Asia.
AMURSK POX
3 months ended Mar 31, % change
2023 2022
Concentrate processed, Kt 54 58 -7%
Albazino 37 43 -15%
Kyzyl 14 14 +7%
Nezhda 3 - NA
Gold recovery 94.6% 95.5% -1%
Average gold grade, g/t 58.7 64.9 -10%
Average sulphur grade 15.5% 13.5% +15%
Total gold produced1, Koz 99 120 -18%
Kyzyl 55 62 -11%
Albazino 41 56 -27%
Nezhda 3 1 +127%
Mayskoye - 2 NM
Notes:
(1) For information only. Already accounted for in production at operating
mines.
The decrease in POX production was attributable to the grade decline in
feedstock sourced from Kyzyl and Albazino. The Company increased the
volume of Nezhda concentrate processed, which resulted in a minor decrease
in recovery rate.
At POX-2, construction and installation works at the intensive cyanidation
section and other parts of the downstream circuit were completed. Section
commissioning is underway; start-up is expected in Q2 2023. The
construction of metal frameworks for technological equipment in the High
Bay steam conditioning section is nearing completion. The installation of
piping and equipment in the CIL section continues.
All construction and installation works at the oxygen station are expected
to be completed by the end of May together with the start the complex
commissioning.
The Company now expects POX-2 start-up in H2 2024 (previously Q2 2024) as
more time is required to findreplacements for sanctioned equipment in
China.
SUSTAINABILITY, HEALTH AND SAFETY
No fatal accidents occurred among the Group’s workforce and contractors in
Q1 2023. Lost time injury frequency rate (LTIFR) among the Group’s
employees stood at 0.09 (0.10 in Q1 2022), representing a 10% y-o-y
decline, with three incidents recorded (three in Q1 2022) related to hit
by an object, falling rock, slipping and tripping while walking resulting
in minor lost-time injuries. Additionally, one lost-time injury (person
hit by an object) took place among contractors working on site, classified
as minor (three in Q1 2022).
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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
ISIN: JE00B6T5S470
Category Code: UPD
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 242496
EQS News ID: 1628639
End of Announcement EQS News Service
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