REG-Polymetal International plc Polymetal: Q4 and full year 2019 production results
23/01/2020 07:05
============
Polymetal International plc (POLY)
Polymetal: Q4 and full year 2019 production results
23-Jan-2020 / 10:00 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 time IMMEDIATE LSE, MOEX, AIX: POLY / ADR:
AUCOY
Date 23 January 2020
Polymetal International plc
Q4 and full year 2019 production results
Polymetal International plc reports strong production results for the
fourth quarter and twelve months ended December 31, 2019.
"A strong Q4 allowed Polymetal to exceed both original and updated
guidance for the eighth year in a row. Robust production and positive gold
price dynamics drove strong free cash flow generation", said Vitaly Nesis,
Group CEO of Polymetal. "Stable operating performance should ensure steady
and significant dividend flow while planned progress with execution of
Nezhda and POX-2 projects will enable us to resume production growth in
2022".
HIGHLIGHTS
• The Company's FY2019 gold equivalent ("GE") production amounted to
1,614 Koz, an increase of 3% over 2018 and 4% above the original
production guidance of 1.55 Moz. A strong contribution from Kyzyl more
than compensated for disposals against the backdrop of stable results
from the rest of the portfolio. Production from continuing operations
grew by 14% year-on-year to 1,609 Koz GE.
• Safety performance in 2019 deteriorated both in terms of frequency of
lost-time injuries and the number of fatalities. Management expects
the Board to consider and approve significant safety-related changes
to the remuneration structure for all levels of the Company management
together with a comprehensive action plan focused on impacting the
behavior and attitudes of the employees. Our goal remains zero
fatalities.
• Q4 GE output was 383 Koz, 15% below Q4 2018 production from continuing
operations, mainly as a result of limited throughput at the POX plant
in the reporting quarter due to scheduled downtime which was part of
the POX-2 project activities.
• Gold production for the full year was up 8% while silver output
contracted by 15% on the back of asset disposals and planned grade
decline at Dukat.
• Full-year revenue jumped by 19% to reach US$ 2.2 billion on the back
of higher volumes and metal prices. Q4 revenue increased by 1% to US$
643 million as lower volumes were offset by increasing prices.
• The Company expects full-year costs to be close to the top of the
range of its cost guidance of US$ 600-650/GE oz for Total Cash Costs
("TCC") and US$ 800-850/GE oz for All-in Sustaining Cash Costs
("AISC"). The main factors driving this guidance are: stronger Rouble,
higher royalties driven by higher metal prices, and higher domestic
diesel prices.
• In Q4, Polymetal generated strong free cash flow resulting in Net Debt
reduction to US$ 1.48 billion as at the end of 2019. The Company
expects Net Debt/EBITDA ratio to be lower than the target level of
1.5x.
2020 OUTLOOK
• The Company reiterates its current production guidance of 1.6 Moz of
GE for each of FY2020 and 2021.
• TCC in 2020 is expected to be in the range of US$ 650-700/GE oz while
AISC is expected to average US$ 850-900/GE oz. The expected increase
over 2019 cost levels is driven by the current appreciation of the
Russian rouble and increased domestic diesel fuel price, as well as
increased royalties on the back of continued strong gold and silver
price performance. The guidance remains contingent on the
Rouble/Dollar exchange rate and Brent oil price.
• Capital expenditures in 2020 are expected to be approximately US$ 475
million. The US$ 50 million increase compared to the previous estimate
is driven by accelerated pre-stripping at Nezhda, several
environmentally driven investments, as well as stronger Rouble.
3 months ended 12 months ended
Dec 311, % change2 Dec 311, % change2
2019 2018 2019 2018
Waste mined, Mt 39.7 32.2 +23% 158.6 126.7 +25%
Underground 25.6 33.2 -23% 105.8 130.0 -19%
development, km
Ore mined, Mt 4.2 3.8 +11% 17.2 14.0 +23%
Open-pit 3.1 2.6 +19% 13.0 9.3 +40%
Underground 1.1 1.1 -6% 4.2 4.7 -10%
Ore processed, Mt 3.5 3.7 -6% 15.0 15.2 -1%
Production
Gold, Koz 312 414 -25% 1,316 1,216 +8%
Silver, Moz 5.2 5.9 -11% 21.6 25.3 -15%
Copper, Kt 0.5 1.3 -66% 2.5 3.9 -37%
Gold equivalent, 383 497 -23% 1,614 1,562 +3%
Koz3
Sales
Gold, Koz 374 432 -13% 1,366 1,198 +14%
Silver, Moz 5.7 8.3 -31% 22.1 25.7 -14%
Copper, Kt 0.8 1.4 -42% 2.8 3.3 -15%
Revenue, US$m4 643 634 +1% 2,245 1,882 +19%
Net debt, US$m5 1,479 1,702 -13% 1,479 1,518 -3%
Safety
LTIFR6 0.18 0 NA 0.19 0.09 +111%
Fatalities 0 0 NA 2 1 +100%
Notes: (1) Including discontinued operations.
(2) % 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.
(3) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au conversion
ratios.
(4) Calculated based on the unaudited consolidated management accounts.
(5) Non-IFRS measure based on unaudited consolidated management accounts.
Comparative information is presented for 30 September 2019 (for the three
months period) and 31 December 2018 (for the twelve months period).
(6) 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
2019 2018 2019 2018
GOLD EQ. (KOZ)1
Kyzyl 90 86 +4% 343 96 257%
Dukat 70 75 -7% 302 306 -1%
Albazino-Amursk 30 67 -55% 241 308 -22%
Omolon 57 58 -3% 205 195 5%
Varvara 35 39 -9% 149 142 5%
Mayskoye 52 70 -25% 129 117 10%
Svetloye 27 23 14% 134 136 -1%
Voro 22 29 -23% 107 107 -1%
TOTAL (continuing operations) 383 448 -15% 1,609 1,407 +14%
Okhotsk - 35 NA - 104 NA
Kapan - 13 NA 5 51 -90%
TOTAL (including discontinued 383 497 -23% 1,614 1,562 +3%
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
CONFERENCE CALL AND WEBCAST
The company will hold a conference call and webcast on Thursday, 23
January 2020 at 11:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 330 336 9411 (local access)
0800 279 7204 (toll free)
From the US:
+1 929 477 0324 (local access)
800 458 4121 (toll free)
From Russia:
+7 495 646 9190 (local access)
8 10 8002 867 5011 (toll free)
To participate from other countries, please dial any of the local access
numbers listed above.
Conference code: 9191693
To participate in the webcast follow the link:
https://webcasts.eqs.com/polymetal20200123. Please be prepared to
introduce yourself to the moderator or register.
A recording of the call will be available immediately after the call at
+44 20 7660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10
8002 702 1012 (from Russia), access code 9191693, from 17:30 Moscow time
Thursday, 23 January, till 17:30 Moscow time Thursday, 30 January, 2020.
Webcast replay will be available on Polymetal's website
( 1 www.polymetalinternational.com) and at
https://webcasts.eqs.com/polymetal20200123.
About Polymetal
Polymetal International (LSE, MOEX: POLY, ADR: AUCOY) (together with its
subsidiaries - "Polymetal", the "Company", or the "Group") is the top-20
global gold producer and top-5 global silver producer with assets in
Russia and Kazakhstan. The Company combines strong growth with a robust
dividend yield.
Enquiries
Media Investor Relations
Polymetal
2 ir@polymetalinternational.com
FTI Consulting Evgeny
Monakhov +44 20 7887 1475 (UK)
Leonid Fink +44 20
3727 1000 Timofey
Viktor Pomichal Kulakov
+7 812 334 3666 (Russia)
Kirill
Kuznetsov
Joint Corporate
Brokers
+44 20
Morgan Stanley 7425 8000
RBC Europe
Andrew Foster Limited
Richard Brown Marcus Jackson +44 20 7653 4000
Panmure Gordon Jamil Miah
James Stearns +44 20
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 Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 17.6 16.1 +9% 67.5 60.9 +11%
Ore mined (open-pit), 440 416 +6% 2,000 1,249 +60%
Kt
Gold grade, g/t 7.4 5.5 +33%
PROCESSING
Ore processed, Kt 510 478 +7% 2,000 914 +119%
Gold grade, g/t 7.6 6.6 +16% 7.1 5.7 +26%
Gold recovery 88.0% 85.5% +3% 87.8% 81.5% +8%
Concentrate produced, 35 34 +3% 125 56 +124%
Kt
Concentrate gold 98.6 79.4 +24% 100.8 74.8 +35%
grade, g/t
Gold in concentrate, 110.3 86.4 +28% 403.6 133.6 +202%
Koz1
Concentrate shipped, 13.5 40.0 -66% 67.6 45.4 +49%
Kt
Payable gold shipped, 28.0 79.3 -65% 155.0 89.3 +74%
Koz
Amursk POX
Concentrate 16 2 NM 52 2 NM
processed, Kt
Gold grade, g/t 134.1 127.0 +6% 128.1 127.0 +1%
Gold recovery 91.4% 95.5% -4% 92.4% 95.5% -3%
Gold produced, Koz 62.0 7.0 NM 188.4 7.0 NM
TOTAL PRODUCTION
Gold, Koz 90.0 86.3 +4% 343.5 96.3 +257%
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.
In Q4 and FY2019, Kyzyl outperformed budget on throughput, grade and
production. Management expects the average grade to decrease to open-pit
reserve average in 2020 as the mining will shift to deeper levels with
more uniform distribution of gold in ore.
Concentrator throughput reached the nameplate capacity of 2 Mtpa vs 1.8
Mtpa design capacity. The Company intends to push the throughput further
to 2.1 Mtpa level by H2 2020.
The recovery rates at Amursk POX remained stable quarter-on-quarter though
it decreased in comparison with the previous year as starting from Q3 the
Company increased the share of gold contained in low-carbon concentrate
processed at Amursk POX in response to noticeable tightening of markets in
China.
In the reporting quarter, Polymetal completed a FS-level technical study
to re-optimize the open pit and updated Ore Reserves estimate. The new
estimate comprises 8.5 Moz of gold at an average grade of 6.3 g/t. This
represents 1.5 Moz increase in gold contained in comparison with the
reserves as at the end of 2018, mostly in open pit. Total life of mine
extended by eight years to 2047 with open-pit mining ending in 2031.
DUKAT OPERATIONS
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Underground 14.5 15.0 -3% 59.5 59.6 -0%
development, km
Ore mined, Kt 620 595 +4% 2,515 2,426 +4%
Grade
Gold, g/t 0.6 0.5 +12%
Silver, g/t 278 286 -3%
PROCESSING
Omsukchan
concentrator
Ore processed, Kt 523 500 +5% 2,058 1,995 +3%
Grade
Gold, g/t 0.4 0.5 -16% 0.5 0.5 -8%
Silver, g/t 266 288 -8% 285 297 -4%
Recovery1
Gold 83.8% 86.7% -3% 85.6% 86.7% -1%
Silver 84.6% 88.0% -4% 86.3% 88.2% -2%
Production
Gold, Koz 5.8 7.0 -18% 27.4 29.5 -7%
Silver, Moz 3.7 4.0 -8% 15.8 16.4 -4%
Lunnoye plant
Ore processed, Kt 113 116 -2% 461 463 -0%
Grade
Gold, g/t 1.4 1.5 -7% 1.4 1.3 +5%
Silver, g/t 251 318 -21% 256 327 -22%
Recovery1
Gold 83.9% 84.2% -0% 86.7% 85.1% +2%
Silver 92.9% 91.7% +1% 91.8% 91.3% +1%
Production
Gold, Koz 4.0 4.6 -12% 18.0 16.7 +8%
Silver, Moz 0.8 1.1 -24% 3.5 4.4 -20%
TOTAL PRODUCTION
Gold, Koz 9.8 11.5 -15% 45.4 46.2 -2%
Silver, Moz 4.5 5.1 -11% 19.3 20.8 -7%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory.
At Dukat, quarterly silver and gold production were down 11% and 15%
year-on-year respectively. The decline was primarily driven by the
Omsukchan concentrator processing larger volumes of lower-grade ore as
well as a fall in recoveries due to processing of material from Goltsovoye
crown pillars. Mining at Goltsovoye was completed and the operation has
been transferred to care and maintenance. Grades at Lunnoye plant also
decreased in line with the budget on the back of depletion of higher-grade
Zone 9.
ALBAZINO-AMURSK
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 4.5 5.4 -17% 21.2 21.3 -1%
Underground 3.1 2.3 +32% 10.8 9.2 +17%
development, Km
Ore mined, Kt 536 412 +30% 2,133 1,784 +20%
Open-pit 370 317 +17% 1,555 1,379 +13%
Underground 166 95 +74% 578 405 +43%
Gold grade, g/t 4.0 5.2 -22%
Open-pit 3.9 5.2 -25%
Underground 4.4 5.0 -12%
PROCESSING
Albazino concentrator
Ore processed, Kt 433 432 +0% 1,736 1,724 +1%
Gold grade, g/t 5.1 5.6 -9% 4.6 5.3 -13%
Gold recovery1 88.4% 86.2% +3% 86.6% 85.7% +1%
Concentrate produced, 37.9 37.4 +1% 143.9 143.1 +1%
Kt
Concentrate gold 50.8 55.2 -8% 47.7 54.5 -12%
grade, g/t
Gold in concentrate, 61.8 66.4 -7% 220.8 250.7 -12%
Koz2
Amursk POX
Concentrate 24 39 -38% 159 170 -6%
processed, Kt
Gold grade, g/t 55.5 55.2 +0% 51.2 56.9 -10%
Gold recovery 96.5% 96.2% +0% 95.4% 96.7% -1%
Gold produced, Koz 30.0 67.5 -55% 241.1 307.9 -22%
TOTAL PRODUCTION
Gold, Koz 30.0 67.5 -55% 241.1 307.9 -22%
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, FY2019 performance was affected by processing of lower grade
ore from Ekaterina-1 open pit. As a result, both quarterly and yearly gold
in concentrate volumes were down 7% and 12%, respectively. Mining at
Ekaterina-1 was completed in August and the increased volume of
underground ore from Ekaterina-2 positively contributed to
quarter-on-quarter grade dynamics. The recovery rate increased in Q4
year-on-year as processing of near-surface partial oxidized ore from
Ekaterina-2 pit ended.
The total gold output for the full year amounted to 241 Koz, a 22% decline
year-on-year. Apart from decrease in production from Albazino concentrate,
this was driven by lower volumes of third-party feed processed at the POX
plant. In October, the plant underwent a planned 3-week shutdown.
AMURSK POX
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
Concentrate 41 45 -10% 211 176 +20%
processed, Kt
Albazino 20 31 -37% 142 147 -3%
Mayskoye 0 4 -97% 0 5 -97%
Kyzyl 16 2 NM 52 2 NM
Other1 4 8 -44% 17 23 -26%
Gold recovery 93.3% 96.1% -3% 94.1% 96.7% -3%
Average gold grade, 87.2 58.1 +50% 70.1 57.5 +22%
g/t
Average sulphur grade 17.0% 14.5% +17% 13.4% 10.0% +35%
Total gold produced2, 92.0 74.5 +24% 429.5 314.9 +36%
Koz
Albazino 29.6 53.7 -45% 208.1 256.4 -19%
Kyzyl 62.0 7.0 NM 188.4 7.0 NM
Other1 0.4 13.8 -97% 33.0 51.5 -36%
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.
Gold production at the Amursk POX increased by 24% in Q4 and 36% in 2019
year-on-year driven by the introduction of high-grade Kyzyl concentrate to
the feed. The output from Veduga concentrate amounted to 28 Koz for the
full year.
The 3% year-on-year decline in recovery is attributable to processing of
large volumes of Kyzyl concentrate starting from Q2. In Q4, the recovery
rate slightly contracted in comparison with the previous quarter as
different mixes were tested to include optimal quantities of Kyzyl
concentrate with relatively high carbon content.
OMOLON OPERATIONS
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 1.8 1.5 +19% 7.0 6.1 +14%
Underground 3.0 3.2 -5% 12.9 12.9 +0%
development, Km
Ore mined, Kt 790 356 NM 2,973 1,014 NM
Open-pit 673 227 NM 2,522 627 NM
Underground 117 129 -9% 451 387 +17%
Grade
Gold, g/t 3.0 5.0 -40%
Silver, g/t 18 74 -76%
PROCESSING
Kubaka Mill
Ore processed, Kt 222 220 +1% 834 862 -3%
Grade
Gold, g/t 6.5 8.2 -21% 6.4 5.7 +13%
Silver, g/t 108 37 +194% 95 98 -3%
Recovery1
Gold 95.2% 95.7% -1% 95.5% 95.5% -0%
Silver 77.3% 75.4% +3% 79.0% 86.4% -9%
Gold production, Koz 45.2 52.9 -14% 164.3 152.7 +8%
Silver production, 0.7 0.2 +221% 2.1 2.3 -10%
Moz
Birkachan Heap Leach
Ore stacked, Kt - 39 -100% 897 997 -10%
Gold grade, g/t - 1.1 -100% 1.2 1.1 +5%
Gold production, Koz 3.0 3.0 +1% 14.1 12.9 +9%
TOTAL PRODUCTION
Gold, Koz 48.3 55.8 -14% 178.4 165.5 +8%
Silver, Moz 0.7 0.2 +221% 2.1 2.3 -10%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory
At Omolon, gold production in Q4 was down 14% while silver production was
up three-fold year-on-year driven by processing of stockpiled Oroch ore.
In Q4, there was no heap leach stacking and the gold was produced from the
feed stacked in the previous quarters.
Full-year gold production increased by 8% year-on-year to 178 Koz as the
Kubaka mill processed larger volumes of higher grade ore from Birkachan
and Olcha underground.
Silver grade in ore mined for the full year declined drastically due to
Sopka full depletion, while Birkachan open pit was recommenced and
Yolochka launched in 2019.
VARVARA
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 11.2 6.8 +64% 45.4 28.7 +58%
Ore mined, Kt 991 864 +15% 3,943 3,139 +26%
Grade
Gold, g/t 1.3 1.3 -2%
Copper, float ore, 0.30% 0.59% -50%
%
PROCESSING
Leaching
Ore processed, Kt 723 755 -4% 2,991 3,079 -3%
Gold grade, g/t 1.4 1.4 -1% 1.5 1.4 +5%
Gold recovery1 86.6% 89.1% -3% 86.8% 88.1% -1%
Gold production (in 26.7 29.7 -10% 123.4 118.2 +4%
dore), Koz
Flotation
Ore processed, Kt 148 159 -7% 559 456 +23%
Grade
Gold, g/t 2.3 1.5 +49% 1.5 1.4 +5%
Copper 0.37% 0.67% -45% 0.49% 0.59% -18%
Recovery1
Gold 77.8% 78.5% -1% 69.5% 72.5% -4%
Copper 87.0% 92.5% -6% 90.5% 92.2% -2%
Production
Gold (in 6.1 4.3 +41% 13.3 11.7 +14%
concentrate), Koz
Copper (in 0.5 0.9 -51% 2.3 2.4 -4%
concentrate), Kt
Veduga ore toll 14 22 -35% 113 108 +4%
processed, Kt2
Total ore processed, 885 936 -5% 3,663 3,642 +1%
Kt
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2019 2018 2019 2018
TOTAL PRODUCTION
Gold, Koz 32.8 34.0 -4% 136.7 129.9 +5%
Copper, Kt 0.5 0.9 -51% 2.3 2.4 -4%
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.
At Varvara, full-year gold output increased by 5% to reach 137 Koz driven
by higher mining and railing volumes at Komar.
Quarterly production was down 4% on the back of introduction of ore with
lower grade and recovery from Komar into feed at the leaching circuit. In
the meantime, gold production in concentrate at the flotation circuit was
up 41% as the concentrator was processing higher grade third party ore.
MAYSKOYE
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 1.4 1.4 -3% 5.4 5.0 +8%
Underground 5.0 6.4 -22% 20.5 23.9 -14%
development, km
Ore mined, Kt 175 239 -27% 813 1,005 -19%
Open-pit 3 91 -97% 178 372 -52%
Underground 172 148 +16% 635 633 +0%
Gold grade, g/t 6.1 6.4 -5%
Open-pit 7.0 8.0 -13%
Underground 5.9 5.5 +7%
PROCESSING
Ore processed, Kt 220 221 -1% 878 861 +2%
Gold grade, g/t 5.8 5.9 -2% 6.1 7.1 -14%
Gold recovery 90.3% 85.2% +6% 82.1% 79.1% +4%
Gold in concentrate, 36.8 35.6 +3% 131.6 119.8 +10%
Koz2
Gold produced in dore
from concentrate - 6.7 -100% - 7.4 -100%
(POX), Koz
Gold produced in dore 8.2 23.5 -65% 14.2 24.6 -42%
from carbon, Koz3
Payable gold in
concentrate shipped 44.2 39.6 +12% 114.5 84.9 +35%
to off-takers, Koz
TOTAL PRODUCTION
Gold, Koz 52.4 69.8 -25% 128.7 116.9 +10%
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
In Q4, the Mayskoye plant was processing sulfide ore only, hence the
production was positively impacted by higher recoveries. Gold in
concentrate produced during the quarter increased by 3%, while full-year
gold in concentrate produced was up 10%. Full-year gold production totaled
129 Koz, a 10% increase over 2018.
SVETLOYE
3 months ended 12 months ended Dec
Dec 31, % change 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 0.3 0.2 +42% 1.4 0.7 +111%
Ore mined (open pit), 300 339 -11% 1,573 1,317 +19%
Kt
Gold grade, g/t 3.8 3.8 +0%
PROCESSING
Ore stacked, Kt 333 234 +42% 1,301 1,378 -6%
Gold grade, g/t 3.2 3.5 -9% 3.8 3.7 +2%
Gold recovery 80.7% 80.7% +0%
TOTAL PRODUCTION
Gold, Koz 26.5 23.3 +14% 133.5 135.3 -1%
At Svetloye, quarterly production grew by 14% year-on-year on the back of
higher stacking volumes following extension of the stacking season until
December due to poor weather conditions in the first nine months of 2019.
VORO
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2019 2018 2019 2018
MINING
Waste mined, Mt 0.2 0.6 -71% 1.3 3.4 -60%
Ore mined, Kt 285 371 -23% 946 1,150 -18%
Gold grade
Primary, g/t 3.2 3.5 -9%
Oxidised, g/t 1.6 3.2 -51%
PROCESSING
Voro CIP
Ore processed, Kt 267 251 +6% 1,050 1,003 +5%
Gold grade, g/t 2.9 3.7 -22% 3.5 3.9 -10%
Gold recovery1 85.4% 81.8% +4% 86.3% 81.0% +7%
Gold production, 19.9 26.6 -25% 91.2 98.8 -8%
Koz
Voro Heap Leach
Ore stacked, Kt 29 - NA 87 62 +42%
Gold grade, g/t 1.1 - NA 1.3 1.4 -7%
Gold recovery 76.6% 73.2% +5%
Gold production, 2.0 1.8 +8% 14.6 7.6 +93%
Koz
TOTAL PRODUCTION
Gold, Koz 21.8 28.4 -23% 105.9 106.4 -0%
Note: (1) Technological recovery, includes gold within work-in-progress
inventory
Open-pit mining at Voro is completed. The technical studies to determine
the feasibility of underground mining are under way and expected to be
finalized in Q1 2021.
The company is currently preparing the initial Ore Reserves estimate for
Saum and Pescherny satellite deposits with the results of both to be
presented in Q2 2020. Mining of oxide ore at Saum will start in 2020 for
processing at Voro CIP circuit.
DEVELOPMENT UPDATE
At Nezhda, mining and construction proceeded according to schedule. The
concentrator building was fully winterized, equipment installation will
start in January. Construction of foundations for flotation and thickening
sections is under way, tails thickener foundation completed. The haulage
road between the mine and the concentrator was built, the construction of
the two bridges on this road continues.
At POX-2, detailed engineering and contracting is ongoing. In Q4, the
front-end section of the water treatment plant was contracted
(conventional filters from Coralina Engineering, South Africa and reverse
osmosis system from Hydrotech, Russia). The autoclave foundation was
completed. The vessel to carry the autoclave from the port of Antwerp to
the mouth of Amur river was chartered and expected to sail in late July.
SUSTAINABILITY, HEALTH AND SAFETY
In Q4, Polymetal had five work-related incidents, which include four minor
injuries and one severe injury. No fatalities occurred in the second half
of the year. Overall LTIFR in 2019 amounted to 0.19 (versus 0.09 in 2018).
The increase was driven by minor incidents of slipping and tripping that
occurred on site.
Safety remains a top priority for Polymetal and we continue focusing on
further improvements across health and safety metrics and target zero
fatalities in relation to our employees and contractors on our sites.
In line with the Company's continued emphasis on sustainability and
corporate social responsibility, management expects the Board to consider
and approve the following changes to safety-related CEO and relevant
senior managements' KPIs for 2020:
• Switch from LTIFR to days lost due to work-related injuries
(Disability) as a Health and Safety KPI while penalty factor of up to
50% of the annual bonus earned for non-safety-related KPIs in case of
fatal/severe accidents remains unchanged.
• Inclusion of long-term disabilities and fatalities occurring at our
contractors into KPI calculation (a 50% penalty factor in case of
fatalities/severe injuries will also be applied).
• Introduction of an additional ESG KPI in the Group CEO bonus structure
with a total weight of 10%.
According to the updated remuneration structure, the share of the two
sustainability related KPIs (health & safety and ESG) in the annual bonus
structure will constitute 35%.
All the changes will be cascaded down to the operational management level.
PERSONNEL
Dmitry Galchuk (35) succeeded Mikhail Yegorov (60) as Managing Director of
Dukat effective from January 1, 2020. Dmitry joined Polymetal in 2011 as
the Chief Engineer at Lunnoye and was most recently the head of Lunnoye
plant. He graduated from Norilsk Industrial Institute with the degree in
Underground mining.
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ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
Sequence No.: 42113
EQS News ID: 959171
End of Announcement EQS News Service
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