REG-Polymetal International plc Polymetal: Q2 2019 production results
24/07/2019 07:05
============
Polymetal International plc (POLY)
Polymetal: Q2 2019 production results
24-Jul-2019 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Release IMMEDIATE
time LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 24 July 2019
Polymetal International plc
Q2 2019 production results
Polymetal reports strong production for the second quarter and the six
months ended June 30, 2019.
"Excellent results from Kyzyl drove our production growth while other
operations delivered strong performances", said Vitaly Nesis, Group CEO of
Polymetal."
HIGHLIGHTS
• The Company's Q2 gold equivalent ("GE") production grew 19%
year-on-year to 384 Koz as Kyzyl delivered at full capacity with 81
Koz of gold produced in the quarter. GE production from continuing
operations was up 29% year-on-year.
• Q2 gold production was up 30% over the previous year at 302 Koz.
Silver production was down 11% at 6.0 Moz on the back of asset
disposals.
• GE production for H1 2019 was 756 Koz, up 22% year-on-year. We expect
stronger production in 2H driven by seasonal concentrate
de-stockpiling at Mayskoye.
• Revenue for Q2 increased 13% year-on-year to US$ 492 million, with
gold sales rising 31% on strong production. Silver sales fell 22% due
to a temporary logistical lag between production and sales to be
eliminated in H2.
• The Company is well positioned to meet its full-year 2019 production
guidance of 1.55 Moz of GE and reiterates its cost guidance: TCC of
US$ 600-650/ GE oz and AISC of US$ 800-850/ GE oz1.
• Polymetal generated significant free cash flow in Q2. Net debt
remained unchanged during the quarter at US$ 1,700 million as of 30
June 2019, while the Company paid US$ 146 million of final dividends
for FY 2018 (US$ 0.31 per share). As in previous years, we expect
significantly stronger free cash flow generation in the second half of
the year on the back of higher production volumes and seasonal working
capital drawdown.
• We are saddened to report a fatal accident that occurred on 10 May
2019. A pump station operator died at Omolon. The Company's risk
management activities increasingly focus on behavioral and cultural
issues underpinning unsafe labor practices. We remain committed to our
strategic objective of zero fatalities.
• At Nezhda, mining activities focused on constructing pit access roads.
Construction proceeded according to schedule with the concentrator
building comfortably on track for full winterization by the time the
cold season starts in November. The project is expected to start up in
Q4 2021.
• At POX-2, detailed engineering of the facility is in full swing. All
long-lead equipment has been contracted. Site preparation activities
including deforestation and topsoil removal are in progress. The
project is on track for launch in H2 2023.
Note: (1) The cost guidance remains contingent on the Russian rouble and
Kazakh tenge exchange rate dynamics, which has a significant effect on the
Group's operating costs.
3 months ended 6 months ended
June 30, % change1 June 30, % change1
2019 2018 2019 2018
Waste mined, Mt 40.0 32.1 +25% 77.6 60.9 +27%
Underground 26.1 31.8 -18% 54.3 64.4 -16%
development, km
Ore mined, Mt 4.3 3.4 +30% 8.6 6.5 +31%
Open-pit 3.3 2.2 +53% 6.5 4.2 +55%
Underground 1.0 1.2 -13% 2.1 2.4 -12%
Ore processed, Mt 4.1 3.7 +11% 7.6 7.0 +8%
Production
Gold, Koz 302 232 +30% 602 446 +35%
Silver, Moz 6.0 6.8 -11% 11.0 12.7 -14%
Copper, Kt 0.6 0.9 -38% 1.4 1.6 -13%
Gold equivalent, 384 324 +19% 756 619 +22%
Koz2
Sales
Gold, Koz 314 239 +31% 604 445 +36%
Silver, Moz 5.6 7.3 -22% 10.3 12.1 -15%
Copper, Kt 0.7 1.2 -44% 1.0 1.5 -30%
Revenue, US$m3 492 435 +13% 946 789 +20%
Net debt, US$m4 1,700 1,704 -0% 1,700 1,518 +12%
Safety5
LTIFR 0.22 0.17 +29% 0.23 0.16 +44%
Fatalities 1 0 +1 2 1 +1
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, 2:1 Pb/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 31 March 2019 (for the three
months period) and 31 December 2018 (for the six months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
PRODUCTION BY MINE
3 months % 6 months %
ended June 30, change ended June 30, change
2019 2018 2019 2018
GOLD EQ. (KOZ)1
Kyzyl 81 - NA 159 - NA
Dukat 82 76 9% 158 155 2%
Albazino-Amursk 55 63 -13% 136 153 -11%
Omolon 46 54 -16% 99 86 15%
Mayskoye - - NA 5 - NA
Varvara 39 31 24% 76 66 16%
Voro 29 28 3% 57 54 4%
Svetloye 52 45 16% 61 53 15%
TOTAL (continuing operations) 384 297 +29% 751 568 +32%
Okhotsk - 12 -100% - 24 -100%
Kapan - 15 -100% 5 27 -82%
TOTAL (including discontinued 384 324 +19% 756 619 +22%
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au
conversion ratios.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, 24 July
2019 at 12:00 London time (14:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 34668237# (free from Russia), or
+44 203 009 24 80 (free from the UK), or
+1 646 722 49 14 (free from the US), or
follow the link: 1 https://webcasts.eqs.com/polymetal20190724. Please be
prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website
( 2 www.polymetalinternational.com) and at
3 https://webcasts.eqs.com/polymetal20190724. 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 418860357#, from 14:30 Moscow time Wednesday,
24 July, till 14:30 Moscow time Wednesday, 31 July, 2019.
Enquiries
Media Investor Relations
Polymetal
4 ir@polymetalinternational.com
FTI Consulting Eugenia
+44 20 Onuschenko +44 20 7887 1476 (UK)
Leonid Fink 3727 1000
Timofey
Viktor Pomichal Kulakov
+7 812 334 3666 (Russia)
Joint Corporate
Brokers
Morgan Stanley +44 20
7425 8000
Andrew Foster RBC Europe
Limited
Richard Brown
Marcus Jackson +44 20 7653 4000
Panmure Gordon
Jamil Miah
Charles Lesser
+44 20
James Stearns 7886 2500
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 June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 16.5 14.9 +11% 32.3 28.7 +13%
Ore mined (open-pit), 511 323 +58% 1,033 397 +160%
Kt
PROCESSING
Ore processed, Kt 512 74 NM 988 74 NM
Gold grade, g/t 6.6 2.5 +159% 6.7 2.5 +164%
Gold recovery 87.8% 41.7% +111% 87.3% 41.7% +110%
Concentrate produced, 28.5 1.3 NM 58.3 1.3 NM
Kt
Concentrate gold 104.2 46.5 +124% 100.0 46.5 +115%
grade, g/t
Gold in concentrate, 95.5 2.0 NM 187.4 2.0 NM
Koz1
Concentrate shipped, 17.3 - NA 36.9 - NA
Kt
Payable gold shipped, 40.4 - NA 91.2 - NA
Koz
Amursk POX
Concentrate 12 - NA 20 - NA
processed, Kt
Gold grade, g/t 128.9 - NA 124.7 - NA
Gold recovery 93.4% - NA 93.8% - NA
Gold produced, Koz 40.9 - NA 68.3 - NA
TOTAL PRODUCTION
Gold, Koz 81.4 - NA 159.5 - 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 continued to outperform in Q2. The operation continued to benefit
from high-grade softer ore and exceeded design specifications on
throughput, grade and production. Half-year gold production came in at
159.5 Koz of gold with 187.4 Koz of gold produced in concentrate.
The average concentrate recovery rate increased to 87.8% despite low mass
pulls achieved to improve transportation economics and attractiveness of
concentrate for Chinese off-takers. Share of gold in low-carbon
concentrate processed at the Amursk POX exceeded 50%.
The processing plant is now running at a rate of 2 Mt per annum - above
its nameplate capacity of 1.8 Mtpa. Recent performance tests demonstrate
that further improvement in throughput can be achieved with US$ 3 million
investment in hydrocyclones and concentrate filtering area.
Open-pit mining continued at a stable pace. A detailed technical study is
under way to re-optimize the open pit under updated operational and
economic assumptions with the results, including the updated Ore Reserves
estimate, to be presented in Q4 2019.
DUKAT OPERATIONS
3 months ended June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
MINING
Underground 14.9 15.2 -2% 30.0 29.4 +2%
development, km
Ore mined, Kt 649 626 +4% 1,252 1,221 +3%
PROCESSING
Omsukchan
concentrator
Ore processed, Kt 516 513 +1% 1,029 996 +3%
Grade
Gold, g/t 0.5 0.5 -1% 0.5 0.5 +0%
Silver, g/t 306 291 +5% 295 302 -2%
Recovery1
Gold 85.3% 87.0% -2% 85.7% 86.6% -1%
Silver 86.6% 88.2% -2% 86.9% 88.0% -1%
Production
Gold, Koz 7.0 7.1 -1% 14.4 14.3 +1%
Silver, Moz 4.3 4.1 +5% 8.3 8.4 -1%
Lunnoye plant
Ore processed, Kt 117 114 +2% 232 227 +2%
Grade
Gold, g/t 1.3 1.2 +13% 1.4 1.2 +14%
Silver, g/t 264 323 -18% 266 340 -22%
Recovery1
Gold 85.1% 85.4% -0% 85.7% 85.3% +0%
Silver 90.1% 90.2% -0% 90.1% 91.0% -1%
Production
Gold, Koz 4.4 3.6 +22% 9.1 7.6 +20%
Silver, Moz 0.9 1.1 -15% 1.8 2.2 -19%
TOTAL PRODUCTION
Gold, Koz 11.4 10.7 +7% 23.6 21.9 +8%
Silver, Moz 5.3 5.2 +1% 10.1 10.6 -5%
Notes: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
The Dukat hub demonstrated a stable performance in Q2 with silver output
up 1% year-on-year to 5.3 Moz. Silver grades at the Omsukchan concentrator
increased by 5% as it processed high-grade ore from the Terem satellite
underground mine. Stronger performance at Omsukchan has compensated for a
planned decrease in grade at the Lunnoye plant.
Gold output increased 7% year-on-year to 11.4 Koz, driven mainly by
increase in gold grade at Lunnoye.
Underground development declined by 2% as Goltsovoye approaches the end of
its reserves with mining focused on pillar removal.
ALBAZINO
3 months ended June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
MINING
Albazino
Waste mined, Mt 5.6 5.4 +3% 11.1 10.5 +6%
Underground 2.6 2.3 +10% 4.9 4.7 +4%
development, Km
Ore mined, Kt 545 478 +14% 1,026 930 +10%
Open-pit 404 370 +9% 766 715 +7%
Underground 141 108 +31% 259 216 +20%
PROCESSING
Albazino concentrator
Ore processed, Kt 431 441 -2% 856 860 -1%
Gold grade, g/t 4.0 4.8 -18% 4.2 5.0 -17%
Gold recovery1 86.9% 85.0% +2% 85.2% 85.8% -1%
Concentrate produced, 33.7 35.0 -4% 69.3 68.9 +1%
Kt
Concentrate gold 44.1 51.7 -15% 44.3 54.4 -19%
grade, g/t
Gold in concentrate, 47.7 58.1 -18% 98.6 120.3 -18%
Koz2
Amursk POX
Concentrate 38 32 +17% 91 82 +10%
processed, Kt
Gold produced, Koz 55.1 63.0 -13% 136.4 152.8 -11%
TOTAL PRODUCTION
Gold, Koz 55.1 63.0 -13% 136.4 152.8 -11%
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 in concentrate production decreased by 18% to 47.7 Koz
driven by continued processing of a lower grade ore from the Ekaterina-1
open pit. This, in turn, impacted total gold output which fell 13%
year-on-year to 55.1 Koz. Grade decline was partially compensated by an
increase in recoveries from 83.7% in Q1 to 86.9% in Q2.
Underground mine productivity continued to improve with ore mined up 14%
year-on-year as underground development at the Ekaterina-2 underground
mine continues according to plan. Ekaterina-2 should become the main
source of higher-grade ore starting from H2 2020.
AMURSK POX
3 months ended June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
Concentrate 50 32 +55% 111 82 +34%
processed, Kt
Albazino 36 27 +32% 81 71 +14%
Kyzyl 12 - NA 20 - NA
Other1 2 5 -66% 10 11 -14%
Gold recovery 93.4% 96.7% -3% 94.3% 97.1% -3%
Average gold grade, 67.7 59.3 +14% 63.7 58.1 +10%
g/t
Average sulphur grade 12.6% 8.8% +43% 12.6% 8.4% +50%
Total gold produced2, 96.0 63.0 +52% 204.7 152.8 +34%
Koz
Albazino 49.5 50.6 -2% 116.0 130.5 -11%
Kyzyl 40.9 - NA 68.3 - NA
Other1 5.6 12.3 -55% 20.4 22.4 -9%
Notes: (1) Veduga and purchased concentrates which are included in
reportable production in the Albazino segment
(2) For information only. Already accounted for in
production at operating mines.
Quarterly gold production at the Amursk POX increased 52% to 96 Koz on the
back of the increased volume of concentrate processed and Kyzyl-driven
higher average concentrate grade.
The introduction of large quantities of Kyzyl concentrate to the feed
significantly changed operating parameters and led to a temporary decline
in recoveries by 3 percentage points from 96.7% to 93.4%. Over the last
two months, the POX team successfully introduced new operating procedures
that resulted in recoveries climbing back up over 95%. The changes focus
on tighter control of feed variability.
The Amursk POX underwent a planned 15-day shutdown, the first one since
the launch of the debottlenecked facility in November. No material issues
have been identified.
OMOLON OPERATIONS
3 months ended June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 1.9 1.6 +13% 3.2 2,.7 +20%
Underground 3.3 3.2 +5% 6.5 6.3 +3%
development, Km
Ore mined, Kt 730 97 +650% 1,378 482 +186%
Open-pit 625 5 NM 1,159 298 +289%
Underground 105 92 +13% 220 184 +19%
PROCESSING
Birkachan Heap Leach
Ore stacked, Kt 493 472 +4% 546 472 +16%
Gold grade, g/t 1.2 1.1 +6% 1.2 1.1 +6%
Gold production, Koz 2.1 1.0 +101% 2.1 1.0 +101%
Kubaka Mill
Ore processed, Kt 208 216 -4% 428 422 +1%
Grade
Gold, g/t 5.0 5.2 -4% 6.5 5.0 +30%
Silver, g/t 125 171 -27% 72 102 -29%
Recovery1
Gold 97.1% 95.7% +1% 95.5% 95.4% +0%
Silver 88.8% 88.2% +1% 79.1% 81.7% -3%
Gold production, Koz 34.9 39.7 -12% 86.4 70.1 +23%
Silver production, 0.7 1.1 -37% 0.8 1.2 -31%
Moz
TOTAL PRODUCTION
Gold, Koz 37.0 40.7 -9% 88.4 71.1 +24%
Silver, Moz 0.7 1.1 -37% 0.8 1.2 -31%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
In Q2, gold and silver production decreased by 9% and 37% respectively on
the back of lower grades at Kubaka Mill which processed ore from Sopka
low-grade stockpiles. H1 gold output increased 24% year-on-year as
higher-grade ore from Olcha was introduced to the feed in Q1.
At Birkachan, open-pit mining rate achieved 500 Kt per in Q2, while heap
leach operation has doubled production on the back of higher stacking
volumes and higher gold grade.
Open-pit mining at Sopka is completed. The mining fleet has re-located to
a new satellite deposit, Yolochka (80 km from the Kubaka mill), where
mining commenced and will continue for 12 months.
MAYSKOYE
3 months ended 6 months ended
June 30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 1.4 1.4 +3% 2.6 1.9 +33%
Underground development, 5.3 6.0 -12% 10.8 12.1 -11%
km
Ore mined, Kt 220 285 -23% 438 463 -5%
Open-pit 70 110 -36% 134 132 +2%
Underground 150 174 -14% 305 331 -8%
PROCESSING
Ore processed, Kt 207 213 -3% 426 416 +2%
Gold grade, g/t 6.6 8.3 -21% 6.1 6.7 -9%
Gold recovery 69.9% 71.4% -2% 76.5% 77.5% -1%
Gold in concentrate, Koz2 25.2 26.2 -4% 58.6 55.0 +7%
Gold produced in dore from - - NA - - NA
concentrate (POX), Koz
Gold produced in dore from - - NA 4.6 - +100%
carbon, Koz3
Payable gold in
concentrate shipped to - - NA - - NA
offtakers, Koz
TOTAL PRODUCTION
Gold, Koz - - NA 4.6 - 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 dore production at Amursk POX
(3) Gold produced from carbon at Amursk POX
At Mayskoye, gold in concentrate decreased by 4% year-on-year to 25.2 Koz
on the back of lower processing volumes and reduced grades in ore from the
open-pit as the processing plant at Mayskoye switched over to the seasonal
treatment of oxide feed.
The management selected conveyor ore haulage for the long-term upgrade of
the underground mine materials handling system. The key considerations in
the decision included lower capital intensity, lower execution risk and
greater flexibility (compared with the conventional shaft). Total
investment in the project is estimated at approximately US$45m in
2020-2022. The project is expected to yield US$150/oz cost savings in
diesel fuel, electricity and maintenance as well as to reduce operation's
carbon footprint. The expected IRR is 45%.
In parallel, Polymetal selected Paterson & Cooke, a UK engineering firm,
to evaluate options regarding conversion from conventional tailings to
cemented paste backfill. Potential benefits include lower dilution in
flat-dipping ore bodies and the reduction of surface waste disposal.
Detailed study results are expected in Q4 2019.
VARVARA
3 months ended 6 months ended
June 30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 11.6 7.6 +53% 22.7 14.7 +55%
Ore mined, Kt 977 711 +38% 1,938 1,386 +40%
PROCESSING
Flotation
Ore processed, Kt 130 104 +25% 277 180 +54%
Grade
Gold, g/t 1.1 1.4 -20% 1.1 1.3 -13%
Copper 0.52% 0.51% +1% 0.55% 0.53% +3%
Recovery1
Gold 51.1% 71.8% -29% 60.3% 67.7% -11%
Copper 90.8% 92.6% -2% 91.4% 91.5% -0%
Production
Gold (in concentrate), Koz 1.9 2.6 -27% 4.5 4.2 +8%
Copper (in concentrate), 0.6 0.5 +16% 1.3 0.9 +48%
Kt
Veduga ore toll processed, 31 32 -3% 63 43 +46%
Kt2
Leaching
Ore processed, Kt 784 723 +8% 1,535 1,498 +3%
Gold grade, g/t 1.4 1.3 +8% 1.4 1.4 +2%
Gold recovery1 87.7% 87.5% +0% 86.5% 86.9% -0%
Gold production (in dore), 34.1 26.3 +30% 65.5 57.5 +14%
Koz
Total ore processed, Kt 945 858 +10% 1,875 1,721 +9%
TOTAL PRODUCTION
Gold, Koz 35.9 28.9 +25% 69.9 61.7 +13%
Copper, Kt 0.6 0.5 +16% 1.3 0.9 +48%
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.
In Q2, Varvara delivered a solid gold production increase of 25% to 35.9
Koz. The jump was driven by increases in throughput, gold grade and
recovery at the leaching circuit, all benefiting from higher Komar ore
tonnage.
Flotation circuit production declined as it did not process high-grade
3rd-party material available in 2018.
Varvara continued to toll-treat high-grade ore from Veduga and plans to
process more than 100 Kt in 2019.
VORO
3 months ended June 6 months ended
30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 0.4 0.9 -58% 0.8 1,.9 -59%
Ore mined, Kt 210 272 -23% 479 575 -17%
PROCESSING
Voro Heap Leach
Ore stacked, Kt - 1.8 -100% - 1.8 -100%
Gold grade, g/t - 1.5 -100% - 1.5 -100%
Gold production, 6.4 2.1 +202% 11.1 3.7 +201%
Koz
Voro CIP
Ore processed, Kt 270 252 +7% 519 498 +4%
Gold grade, g/t 3.5 4.2 -16% 3.5 4.0 -14%
Gold recovery1 85.7% 81.1% +6% 86.3% 80.8% +7%
Gold production, 22.6 26.2 -14% 44.9 50.8 -11%
Koz
TOTAL PRODUCTION
Gold, Koz 29.0 28.3 +2% 56.0 54.5 +3%
Note: (1) Technological recovery, includes gold within work-in-progress
inventory
Q2 gold production at Voro increased 2% year-on-year to 29.0 Koz driven by
seasonal contributions from the residual heap leach operation. Higher gold
recoveries partially offset a planned decline in grade at the CIP plant.
Ore mined volume continued to decrease as the open pit nears the end of
its life in Q3 2019. Exploration drilling identified substantial
mineralisation below the open pit with technical studies currently under
way to determine the feasibility of underground mining.
SVETLOYE
3 months ended 6 months ended
June 30, % change June 30, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 0.4 0.1 +222% 0.8 0.2 +251%
Ore mined (open 453 335 +35% 867 661 +31%
pit), Kt
PROCESSING
Ore stacked, Kt 414 434 -4% 598 653 -8%
Gold grade, g/t 3.5 3.8 -7% 4.0 3.8 +4%
Gold production, Koz 51.8 44.7 +16% 61.0 53.0 +15%
TOTAL PRODUCTION
Gold, Koz 51.8 44.7 +16% 61.0 53.0 +15%
At Svetloye, gold production increased 16% to 51.8 Koz as the operation
has achieved the third full year of operation. However, rainy weather in
Q2 impacted the pace of stacking and availability of high-grade material.
DEVELOPMENT UPDATE
At Nezhda, mining and construction activities proceeded according to plan.
Pouring of concrete for the concentrator building and mill is complete.
Construction of the mine camp and storage facilities is complete. The
construction of the haulage road between the mine and the concentrator
commenced in May.
Statutory permitting process entered its final phase with the submission
of full design documentation to the Chief Environmental Expertise, a
government agency in charge of environmental permitting.
At POX-2, Polymetal signed comprehensive contract for the detailed
engineering of high-pressure sections of the facility with Hatch.
Equipment for the concentrate preparation section (roll crushers,
acid-resistant mills, steep-angle conveyors) and intensive cyanidation
unit has been contracted. The land use rights for construction have now
been received. Construction of a new concentrate storage facility is under
way.
At Veduga, Polymetal published an updated JORC-compliant Ore Reserve
estimate which comprised 18.9 Mt of ore with an average grade of 4.6 g/t
containing 2.8 Moz of gold (a 111% increase in gold contained).
Exploration drilling is ongoing with further resource and reserve upgrade
expected in Q1 2020.
SUSTAINABILITY, HEALTH AND SAFETY
In Q2, our LTIFR stood at 0.22 (versus 0.17 in Q2 2018) with a total of 6
work-related incidents recorded across the Group (5 incidents in Q2 2018).
The increase is driven by minor incidents that occurred on site but not
during the production process.
We regret to report a fatality that occurred on 10 May 2019 at our Omolon
operation. A pump station operator died at the Kubaka pit. We extend our
sincere condolences to the family, friends and colleagues of the deceased
employee.
Earlier in Q2, Polymetal provided full disclosure on its tailings storage
facilities management in response to public investor enquiries to mining
companies, while two of Polymetal gold production operations, Voro and the
Amursk POX plant, became certified as being in full compliance with the
International Cyanide Management Code.
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ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
Sequence No.: 14439
EQS News ID: 845725
End of Announcement EQS News Service
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