REG-Polymetal International plc Polymetal: Q4 and full year 2020 production results
29/01/2021 07:05
============
Polymetal International plc (POLY)
Polymetal: Q4 and full year 2020 production results
29-Jan-2021 / 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 IMMEDIATE
time LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 29 January 2021
Polymetal International plc
Q4 and full year 2020 production results
Polymetal reports strong production results for the fourth quarter and
twelve months ended December 31, 2020.
"2020 was a successful year for Polymetal despite the COVID pandemic. We
improved our safety performance and, crucially, achieved zero fatalities.
The Company beat production guidance, enjoyed record free cash flow and
continued to execute development projects on schedule", said Vitaly Nesis,
Group CEO of Polymetal. "In 2021, we expect first ounces from Nezhda and
will make every effort to minimize the impact of the second wave of the
pandemic on our safety, production, and cash flows".
HIGHLIGHTS
• No fatal accidents among Group workforce or its contractors occurred
in 2020 (compared with two employee fatalities and one contractor
fatality in 2019). Lost time injury frequency rate (LTIFR) among the
Group's employees decreased by 37% year-on-year (y-o-y) to 0.12.
• In 2020, the Company started to use the DIS metric (days lost due to
work-related injuries) as the main Health and Safety KPI. For the full
year, DIS amounted to 1,583 days, a 10% decrease compared to 2019.
Polymetal will also continue to report its LTIFR going forward.
• The Company's FY2020 gold equivalent ("GE") output amounted to 1,559
Koz, a 4% increase y-o-y and 4% above the original production guidance
of 1.5 Moz. Strong contribution from Kyzyl, Varvara and Albazino
offset planned grade declines at Svetloye and Voro. Q4 GE production
was roughly stable y-o-y and stood at 358 Koz.
• Revenue in 2020 jumped by 28% to reach US$ 2.9 billion while Q4
revenue was up 31% y-o-y to US$ 0.8 billion on the back of higher gold
sales and higher metal prices. The lag between gold production and
sales has been closed.
• The Company expects full-year Total Cash Costs ("TCC") to be below the
original guidance of US$ 650-700/GE oz. Sharp devaluation of domestic
currencies (RUR and KZT) outweighed additional COVID-related costs and
price-driven increase in royalties. All-in Sustaining Cash Costs
("AISC") are expected to be within the guidance range of US$
850-900/GE oz as the Company has accelerated pre-stripping and mine
fleet renewals against the backdrop of higher commodity prices.
• Polymetal generated strong quarterly free cash flow resulting in Net
Debt reduction to US$ 1.35 billion as at the end of 2020, Net
Debt/EBITDA is expected to be below 1x. For the full year, Net Debt
decreased by US$ 128 million and the Company paid US$ 480 million of
dividends implying record annual FCF.
• Construction and development activities at Nezhda and POX-2 progressed
on schedule despite significant challenges posed by COVID-related
disruptions and slowdowns. At Nezhda, processing plant building was
completed and most of the key equipment installed. Ore mining is
ongoing. At POX-2, the autoclave building framework, concentrate
storage facility and the majority of concrete work for
desorption/electrolysis building and oxygen station were completed.
• In 2020, the Board approved construction of the Voro flotation plant
(start-up in Q1 2023) and Kutyn heap leach project, a part of Albazino
operations (start-up in Q2 2023).
• CAPEX for the full year is expected to amount to approximately 10%
higher than guidance at US$ 590 million. The increase is mostly
related to:
◦ Accelerated spending across project portfolio in a bid to
neutralize the impact of the pandemic on project schedules and
◦ Substantial increase in capitalized stripping aimed at ensuring
operational flexibility and production stability against the
backdrop of heightened epidemiological risks.
2021 OUTLOOK
• The Company reiterates its current production guidance of 1.5 Moz of
GE for FY2021 and 1.6 Moz of GE for FY2022.
• TCC in 2021 is expected to be in the range of US$ 700-750/GE oz. The
y-o-y TCC increase will be driven by:
◦ Rouble and Tenge appreciation compared to average 2020 levels.
◦ Increasing domestic diesel fuel price driven by higher Brent oil
prices.
◦ Above-CPI wage inflation in the mining industry.
◦ Full-year impact of COVID-related measures.
The guidance remains contingent on the Rouble/Dollar and Tenge/Dollar
exchange rates and Brent oil price.
• Capital expenditures in 2021 are expected to be approximately US$ 560
million. A US$ 75 million increase compared to the previous guidance
is driven by:
◦ Limited availability and sharp increases in construction labor
costs. This factor is driven by COVID-related travel restrictions
with Central Asian countries, a traditional source of the
majority of construction workforce.
◦ Sharp increases in domestic diesel fuel and steel prices.
◦ Higher EUR/USD exchange rate (imported processing and mining
equipment mainly sourced from the EU).
◦ Construction of on-site observatory facilities for personnel at
remote sites.
As a result, AISC in 2021 is expected to average US$ 925-975/GE oz. The
Company will continue to prioritize timely project execution over cost
optimization in its projects.
COVID-19 UPDATE
• There were 80 active cases of COVID-19 as at 25 January 2021 across
the Group. We regret to report that five of our employees (four in
2020 and one in 2021) died of the disease or its consequences.
• Epidemiological situation in the Company remains under control.
Operations and development projects are unaffected so far.
• Strict precautionary procedures which were previously implemented
including mandatory isolation of new arrivals and restrictions on
meetings and travel, are maintained at all production sites and
offices. These restrictions are currently expected to continue into
full year of 2021.
• Polymetal is prepared to start vaccination of its employees and is
currently awaiting for the Russian Sputnik-V vaccine to become broadly
available.
• Polymetal continues to provide varied financial and operational
support to healthcare facilities across all regions of its presence
with US$ 3.4 million spent in 2020. The main areas of assistance
include purchasing PPE, medical supplies, and specialized diagnostic
equipment.
• The Company estimates COVID-related cash expenses in 2021 at
approximately US$ 5 million per month with the majority recorded as
operating costs. This translates into approximately US$ 35 per GE
ounce in AISC.
COVID-19 STATISTICS AS OF 25.01.2021
Employees Russia Kazakhstan Group
Tests administered 31,679 16,521 48,200
C-19 positive tests 1,120 331 1,451
Active cases 48 32 80
Died 4 1 5
In hospital 1 1 2
Hospitalised since the start of the pandemic 187 20 207
Average headcount 9,432 2,633 12,065
OPERATING HIGHLIGHTS
3 months ended 12 months ended
Dec 31, % change1 Dec 31, % change1
2020 2019 2020 2019
Waste mined, Mt 44.0 39.8 +10% 166.8 158.6 +5%
Underground 22.6 25.6 -12% 90.0 105.8 -15%
development, km
Ore mined, Mt 3.54 4.21 -16% 15.76 17.22 -8%
Open-pit 2.49 3.13 -20% 11.60 13.02 -11%
Underground 1.05 1.07 -2% 4.17 4.20 -1%
Ore processed, Mt 3.7 3.5 +3% 15.4 15.0 +3%
Average GE grade 3.9 4.0 -3% 3.9 3.8 +2%
processed, g/t
Production
Gold, Koz 322 312 +3% 1,402 1,316 +6%
Silver, Moz 4.4 5.2 -16% 18.8 21.6 -13%
Gold equivalent, 358 355 +1% 1,559 1,496 +4%
Koz2
Sales
Gold, Koz 386 374 +3% 1,392 1,366 +2%
Silver, Moz 5.2 5.7 -9% 19.3 22.1 -13%
Revenue, US$m3 846 643 +31% 2,865 2,245 +28%
Net debt, US$m4 1,351 1,610 -16% 1,351 1,479 -9%
Safety5
LTIFR (Employees) 0.16 0.18 -11% 0.12 0.19 -37%
DIS (Employees)6 1,583 1,760 -10%
Fatalities
Employees 0 0 NA 0 2 -100%
Contractors 0 1 -100%
Average headcount 12,065 11,611 +4%
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 120:1 Au/Ag conversion ratio (prior to Q2 2020, Polymetal
used 80:1 Au/Ag ratio) and excluding base metals (previously were
included). Historical comparative data restated accordingly.
(3) Based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts.
Comparative information is presented for 30 Septemeber 2020 (for the three
months period) and 31 December 2019 (for the twelth months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.
(6) DIS - days lost due to work-related injuries.
PRODUCTION BY MINE
3 months ended Dec % 12 months ended Dec %
31, 31,
2020 2019 change 2020 2019 change
GOLD EQ. (KOZ)1
Kyzyl 67 90 -25% 382 343 +11%
Albazino 56 30 +88% 261 241 +8%
Omolon 57 54 +6% 210 196 +7%
Dukat 48 47 +2% 199 206 -3%
Varvara 28 33 -14% 159 137 +16%
Mayskoye 61 52 +16% 139 129 +8%
Svetloye 28 27 +7% 120 134 -11%
Voro 12 22 -46% 89 106 -16%
TOTAL (continuing 358 355 +1% 1,559 1,493 +4%
operations)
Kapan - - NA - 3 -100%
TOTAL (including
358 355 +1% 1,559 1,496 +4%
discontinued
operations)
Notes: (1) Based on 120:1 Au/Ag conversion ratio (prior to Q2 2020,
Polymetal used 80:1 Au/Ag ratio) and excluding base metals (previously
were included). Historical comparative data restated accordingly.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Friday, 29 January
2021 at 11:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 (0) 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 10 800 2867 5011 (toll free)
To participate from other countries, please dial any of the local access
numbers listed above.
Conference code: 3973919
To participate in the webcast follow the link:
1 https://www.webcast-eqs.com/polymetal20210129.
Please be prepared to introduce yourself to the moderator or register.
A recording of the call will be available at +44 207 660 0134 (from the
UK), +1 719 457 0820 (from the USA) and 8 10 800 2702 1012 (from Russia),
access code 3973919, from 17:30 Moscow time Friday, 29 January, till 17:30
Moscow time Friday, 5 February 2021. Webcast replay will be available on
Polymetal's website ( 2 www.polymetalinternational.com) and at
3 https://www.webcast-eqs.com/polymetal20210129.
About Polymetal
Polymetal International plc (together with its subsidiaries - "Polymetal",
the "Company", or the "Group") is a top-10 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
4 ir@polymetalinternational.com
FTI Consulting Evgeny
+44 20 Monakhov +44 20 7887 1475 (UK)
Leonid Fink 3727
1000 Timofey
Viktor Pomichal Kulakov
+7 812 334 3666 (Russia)
Kirill
Kuznetsov
Joint Corporate Brokers
+44 20
Morgan Stanley & Co. 7425
International plc 8000
Andrew Foster RBC Europe
Limited
Richard Brown
Marcus +44 20 7653 4000
Panmure Gordon Jackson
Daniel Norman Jamil Miah
John Prior +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
2020 2019 2020 2019
MINING
Waste mined, Mt 19.7 17.6 +12% 77.7 67.5 +15%
Ore mined (open-pit), 486 440 +10% 2,041 2,000 +2%
Kt
Gold grade, g/t 7.2 7.4 -2%
PROCESSING
Ore processed, Kt 488 510 -4% 2,004 2,000 +0%
Gold grade, g/t 7.8 7.6 +3% 7.9 7.1 +11%
Gold recovery 88.6% 88.0% +1% 88.0% 87.8% +0%
Concentrate produced, 40 35 +16% 151 125 +21%
Kt
Concentrate gold 83.4 98.6 -15% 92.9 100.8 -8%
grade, g/t
Gold in concentrate, 108 110 -2% 450 404 +11%
Koz1
Concentrate shipped, 16 14 +18% 84 68 +25%
Kt
Payable gold shipped, 28 28 -1% 160 155 +3%
Koz
Veduga ore toll 61 - NA 92 - NA
processed, Kt2
Amursk POX
Concentrate 10 16 -42% 53 52 +3%
processed, Kt
Gold grade, g/t 136.8 134.1 +2% 142.6 128.1 +11%
Gold recovery 91.7% 91.4% +0% 92.0% 92.4% -0%
Gold produced, Koz 39 62 -37% 222 188 +18%
TOTAL PRODUCTION
Gold, Koz 67 90 -25% 382 343 +11%
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.
(2) To be further processed at Amursk POX.
Kyzyl Q4 production was down 25% y-o-y to 67 Koz as the planned shutdown
at the Amursk POX delayed some of the ounces to 2021. The Company expects
continued grade normalization towards the reserve average in 2021 as
mining progresses to lower levels. Veduga ore processing will be
discontinued in Q1 2021.
Full-year production increased by 11% y-o-y to 382 Koz and exceeded the
budget on the back of higher grades, particularly in 1H 2020.
In 2021, the Company plans to implement a debottlenecking project at the
concentrator's thickening and drying sections by installing an additional
belt filter, drying drum and second thickener, which will allow it to
achieve 2.2 Mtpa throughput and partially compensate for the expected
grade decline.
Kyzyl Ore Reserves added 2.2 Moz to reach 10.3 Moz of gold following an
initial reserve estimate at East Bakyrcik in November. Mining at East
Bakyrchik is expected to commence in 2031.
ALBAZINO
3 months ended Dec 12 months ended Dec %
31, % change 31, change
2020 2019 2020 2019
MINING
Waste mined, Mt 4.8 4.5 +7% 19.9 21.2 -6%
Underground 3.4 3.1 +11% 12.1 10.8 +12%
development, km
Ore mined, Kt 592 536 +10% 1,993 2,133 -7%
Open-pit 403 370 +9% 1,308 1,555 -16%
Underground 189 166 +14% 686 578 +19%
Gold grade, g/t 4.2 4.0 +5%
Open-pit 4.2 3.9 +7%
Underground 4.4 4.4 -1%
PROCESSING
Albazino
concentrator
Ore processed, Kt 451 433 +4% 1,771 1,736 +2%
Gold grade, g/t 4.6 5.1 -9% 4.6 4.6 +1%
Gold recovery1 88.5% 88.4% +0% 87.2% 86.6% +1%
Concentrate 35 38 -7% 143 144 -1%
produced, Kt
Concentrate gold 51.2 50.8 +1% 49.9 47.7 +5%
grade, g/t
Gold in 58 62 -6% 229 221 +4%
concentrate, Koz2
Amursk POX
Concentrate 32 24 +34% 159 159 -0%
processed, Kt
Gold grade, g/t 53.9 55.5 -3% 52.0 51.2 +1%
Gold recovery 96.2% 96.5% -0% 96.4% 95.4% +1%
Gold produced, Koz 56 30 +88% 261 241 +8%
TOTAL PRODUCTION
Gold, Koz 56 30 +88% 261 241 +8%
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, quarterly gold production jumped by 88% y-o-y to 56 Koz
thanks to the low-base effect (concentrate processed at the Amursk POX in
Q4 2019). On the back of a strong Q4 performance, full-year production was
up 8% y-o-y to 261 Koz.
Open-pit mining was up for the quarter due to the start of mining at the
Farida open pit which is expected to last until 2023.
Underground development and ore mined increased as stoping commenced at
Ekaterina, and decline development started at Anfisa.
Construction at Kutyn heap leach project started following the receipt of
statutory environmental permits (project approved by the Board in
October). Kutyn will be developed as a part of the Albazino hub with first
gold pour expected in Q2 2023. Incremental production from Kutyn will
compensate for the Company's decision not to double the capacity of the
underground mine at Olga given challenging geotechnical conditions.
In order to decarbonize electricity and reduce cash costs Polymetal has
launched a Feasibility Study and is evaluating financing options for the
construction of a grid power line to the Albazino production site. The
conceptual schedule assumes the link to the power grid in 2H 2023.
MAYSKOYE
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.5 1.4 -61% 2.9 5.4 -46%
Underground 5.3 5.0 +5% 21.1 20.5 +3%
development, km
Ore mined, Kt 184 175 +5% 1,039 813 +28%
Open-pit - 3 -100% 278 178 +56%
Underground 184 172 +7% 761 635 +20%
Gold grade, g/t 6.6 6.1 +7%
Open-pit 8.0 7.0 +14%
Underground 6.1 5.9 +3%
PROCESSING
Ore processed, Kt 229 220 +4% 912 878 +4%
Gold grade, g/t 6.1 5.8 +6% 6.6 6.1 +8%
Gold recovery 91.6% 90.3% +2% 83.6% 82.1% +2%
Gold in concentrate, 41 37 +12% 145 132 +10%
Koz2
Payable gold in
concentrate shipped 49 44 +10% 123 114 +8%
to off-takers, Koz
Amursk POX
Concentrate 3 - NA 3 - NA
processed, Kt
Gold grade, g/t 57.3 - NA 57.3 - NA
Gold recovery 96.5% - NA 96.5% - NA
Gold produced in dore 4 - NA 4 - NA
from concentrate
Gold produced in dore 8 8 +2% 11 14 -22%
from carbon, Koz3
TOTAL PRODUCTION
Gold, Koz 61 52 +16% 139 129 +8%
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 production for the quarter grew by 16% y-o-y to reach 61
Koz. The increase was driven by higher grade attributable to lower
dilution and increased recoveries.
The Company continued stripping at Zone 1 where the next pushback was
approved. First oxide ore is expected in Q1 2021 with processing to
commence in Q2 2021.
In 2020, Polymetal started development of two projects at Mayskoye aimed
at operating cost and carbon footprint reduction. In August, the Company
and SMT Scharf AG signed a Memorandum of Understanding to cooperate in
underground electric vehicle (EV) development. During the 2021 navigation
period, two electric underground LHDs and two electric trucks are planned
to be delivered to the site. In Q4, underground development for electric
ore conveyor commenced, the start-up of the project is scheduled for 2022.
In order to reduce surface disposal of waste the Company will use waste as
backfill at the Mayskoye underground. In 2020, basic engineering was
completed. The project is expected to commence in 2023.
AMURSK POX
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2020 2019 2020 2019
Concentrate 45 41 +10% 215 211 +2%
processed, Kt
Albazino 28 20 +42% 147 142 +4%
Kyzyl 10 16 -42% 53 52 +3%
Veduga 4 4 -2% 7 13 -46%
Mayskoye 3 0 NA 3 0 NA
Other1 - - NA 4 4 +17%
Gold recovery 94.3% 93.3% +1% 94.3% 94.1% +0%
Average gold grade, 71.8 87.2 -18% 74.6 70.1 +6%
g/t
Average sulphur grade 15.6% 17.0% -8% 14.4% 13.4% +7%
Total gold produced2, 100 92 +8% 487 430 +13%
Koz
Albazino 46 30 +57% 222 208 +7%
Kyzyl 39 62 -37% 222 188 +18%
Veduga 10 - NA 29 28 +1%
Mayskoye 4 - NA 4 - NA
Other1 - - NA 10 5 +112%
Notes: (1) Purchased concentrates which are included in reportable
production in the Albazino segment.
(2) For information only. Already accounted for in production
at operating mines. Excluding gold produced from Mayskoye loaded carbon.
Amursk POX Q4 gold output increased by 4% y-o-y to 127 Koz due to higher
production from Albazino concentrate and better recoveries stemming from
lower volumes of Kyzyl concentrate with higher carbon content, and the
application of certain adjustments to the flowsheet (slurry conditioning).
The facility successfully underwent a regular 2-week maintenance shutdown
in early October.
In 2021, Polymetal plans to build a hot cure section at the POX resulting
in expected recovery increase of approximately 1 percentage point.
OMOLON OPERATIONS
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.6 1.8 -67% 3.4 7.0 -52%
Underground 3.1 3.0 +1% 13.1 12.9 +2%
development, Km
Ore mined, Kt 353 790 -55% 2,525 2,973 -15%
Open-pit 206 673 -69% 2,034 2,522 -19%
Underground 147 117 +26% 491 451 +9%
Grade
Gold, g/t 3.4 3.0 +11%
Silver, g/t 13.2 17.7 -25%
PROCESSING
Kubaka Mill
Ore processed, Kt 215 222 -3% 863 834 +3%
Grade
Gold, g/t 7.6 6.5 +17% 7.1 6.4 +10%
Silver, g/t 29 108 -73% 24 95 -75%
Recovery1
Gold 96.2% 95.2% +1% 94.5% 95.5% -1%
Silver 67.1% 77.3% -13% 71.8% 79.0% -9%
Gold production, Koz 49 45 +8% 181 164 +10%
Silver production, 0.1 0.7 -81% 0.5 2.1 -78%
Moz
Birkachan Heap Leach
Ore stacked, Kt 199 - NA 1,318 897 +47%
Gold grade, g/t 1.6 - NA 2.0 1.2 +66%
Gold production, Koz 7 3 +132% 25 14 +81%
TOTAL PRODUCTION
Gold, Koz 56 48 +16% 206 178 +16%
Silver, Moz 0.1 0.7 -79% 0.5 2.1 -75%
Note: (1) Technological recovery, includes gold and silver within
work-in-progress inventory.
At Omolon, Q4 as well as the full year, saw y-o-y increases in gold
production and a decrease in silver production as Kubaka mill processed
gold-rich ore from Birkachan underground and Yolochka through the CIP
circuit as opposed to Sopka ore with higher silver content though the
Merrill-Crowe circuit in 2019. Heap leach output also positively
contributed to the total production as the stacking season was extended
into Q4.
Open-pit mining declined as Olcha and Birkachan pits were completed in Q4,
and the mining fleet has been moved to Burgali where mining is expected to
start in Q1 2021. Underground mining increased on the back of Birkachan
underground planned capacity extension. Ore from Olcha, with higher grades
yet higher per unit costs, will be trucked by winter road to Kubaka and
will make a significant share of processing in 2021.
In line with its climate strategy Polymetal started construction of a
solar plant at Omolon. In 2020, the Company completed and approved project
design documentation and prepared a construction site. Engineering
documentation is completed. The start-up is planned for 2021.
The construction of a dry tailings storage facility at Omolon is in
progress. In 2020, the Company completed construction of the filtration
building. The launch of the DSF is expected by the end of 2021.
DUKAT OPERATIONS
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2020 2019 2020 2019
MINING
Underground 10.9 14.5 -25% 43.6 59.5 -27%
development, km
Ore mined, Kt 530 620 -15% 2,228 2,515 -11%
Grade
Gold, g/t 0.2 0.6 -71%
Silver, g/t 242 278 -13%
PROCESSING
Omsukchan
concentrator
Ore processed, Kt 499 523 -5% 2,001 2,058 -3%
Grade
Gold, g/t 0.6 0.4 +33% 0.5 0.5 +7%
Silver, g/t 245 266 -8% 266 285 -7%
Recovery1
Gold 85.3% 83.8% +2% 84.9% 85.6% -1%
Silver 85.6% 84.6% +1% 86.4% 86.3% +0%
Production
Gold, Koz 8 6 +32% 29 27 +5%
Silver, Moz 3.2 3.7 -12% 14.4 15.8 -9%
Lunnoye plant
Ore processed, Kt 118 113 +4% 466 461 +1%
Grade
Gold, g/t 1.5 1.4 +12% 1.4 1.4 +3%
Silver, g/t 278 251 +11% 273 256 +6%
Recovery1
Gold 90.8% 83.9% +8% 90.4% 86.7% +4%
Silver 93.1% 92.9% +0% 92.6% 91.8% +1%
Production
Gold, Koz 5 4 +29% 19 18 +8%
Silver, Moz 1.0 0.8 +20% 3.7 3.5 +7%
TOTAL PRODUCTION
Gold, Koz 13 10 +30% 48 45 +6%
Silver, Moz 4.2 4.5 -6% 18.2 19.3 -6%
Notes: (1) Technological recovery, includes gold and silver within
work-in-progress inventory.
At Dukat, the planned decline in silver grade at the Omsukchan
concentrator drove the silver production decrease of 6% in both Q4 and
full year 2020. Gold production recorded a 30% y-o-y increase in Q4 driven
by higher gold grades in ore at Omsukchan and lower dilution achieved at
Lunnoye.
Underground development volumes declined following the decommissioning of
the Goltsovoye underground mine.
Start of development at Primorskoye is expected to partially offset the
decrease in grade and provide a meaningful new source of high-grade silver
ore for the operation.
VARVARA
3 months ended Dec 12 months ended
31, % change Dec 31, % change
2020 2019 2020 2019
MINING
Waste mined, Mt 10.3 11.2 -8% 40.6 45.4 -10%
Ore mined, Kt 603 991 -39% 2,812 3,943 -29%
Gold grade, g/t 1.4 1.3 +8%
PROCESSING
Leaching
Ore processed, Kt 753 723 +4% 3,056 2,991 +2%
Gold grade, g/t 1.4 1.4 +1% 1.4 1.5 -2%
Gold recovery1 87.4% 86.6% +1% 87.9% 86.8% +1%
Gold production (in 22 27 -17% 121 123 -2%
dore), Koz
Flotation
Ore processed, Kt 167 148 +13% 660 559 +18%
Gold grade, g/t 2.6 2.3 +15% 2.9 1.5 +95%
Recovery1 83.5% 77.8% +7% 86.6% 69.5% +25%
Gold in concentrate, 6 6 +1% 38 13 +184%
Koz
Veduga ore toll - 14 -100% 30 113 -73%
processed, Kt2
Total ore processed, 920 885 +4% 3,745 3,663 +2%
Kt
TOTAL PRODUCTION
Gold, Koz 28 33 -14% 159 137 +16%
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 Q4, Varvara recorded a 14% y-o-y decline in production as material
work-in-progress was accumulated at both circuits to be released in 2021.
Grades at the flotation plant were up y-o-y throughout the entire
reporting year driven by larger volumes of high-grade third-party ore
through the flotation circuit. Recoveries were also better due to flow
sheet improvements.
SVETLOYE
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2020 2019 2020 2019
MINING
Waste mined, Mt 0.7 0.3 +126% 3.0 1.4 +111%
Ore mined, Kt 434 300 +44% 1,888 1,573 +20%
Gold grade, g/t 2.7 3.8 -30%
PROCESSING
Ore stacked, Kt 282 333 -15% 1,303 1,301 +0%
Gold grade, g/t 3.7 3.2 +18% 3.9 3.8 +4%
Gold production, 28 27 +7% 119 134 -11%
Koz
TOTAL PRODUCTION
Gold, Koz 28 27 +7% 119 134 -11%
At Svetloye, quarterly gold production increased by 7% y-o-y to 28 Koz on
the back of higher grade in ore staсked in the period, albeit stacking was
down due to the planned maintenance shutdown. Waste and ore mined were
higher throughout the year driven by Emmy pit development.
VORO
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2020 2019 2020 2019
MINING
Waste mined, Mt - 163 -100% - 1,343 -100%
Ore mined, Kt 136 285 -52% 375 946 -60%
Gold grade
Primary, g/t 2.2 3.2 -33%
Oxidised, g/t - 1.6 NA
PROCESSING
Voro CIP
Ore processed, Kt 257 267 -4% 1,043 1,050 -1%
Gold grade, g/t 2.3 2.9 -20% 2.2 3.5 -37%
Gold recovery1 82.9% 85.4% -3% 82.7% 86.3% -4%
Gold production, 11 20 -46% 74 91 -19%
Koz
Voro Heap Leach
Ore stacked, Kt - 29 -100% 22 87 -75%
Gold grade, g/t - 1.1 -100% 0.9 1.3 -30%
Gold production, 1 2 -44% 15 15 +3%
Koz
TOTAL PRODUCTION
Gold, Koz 12 22 -46% 89 106 -16%
Note: (1) Technological recovery, includes gold within work-in-progress
inventory.
At Voro, open-pit mining was completed in January 2020 and the CIP plant
turned to processing lower-grade stockpiles, which resulted in production
decline for Q4 and the full year. In November, processing of high-grade
ore from Saum, a satellite deposit, commenced at the plant. Heap leach
facility processed the remaining part of the oxidised ore earlier in the
year.
In November, the Company completed the initial Ore Reserve estimate for
the Pesherny deposit of 0.4 Moz of gold at 6.0 g/t. First oxide ore will
be mined in 2021 for processing at Voro CIP plant. Refractory material
representing 90% of the reserves will be processed at the Voro flotation
plant (under construction) to produce 55 Koz of gold on average in
2023-2027.
Construction of the Voro flotation proceeds on schedule, and concentrator
and administrative building foundation works have been completed. Metal
frameworks construction for the concentrator building is in progress.
DEVELOPMENT UPDATE
At Nezhda, mining and construction activities progressed on schedule, with
the start-up targeted for October 2021. As of the end of the year, the
plant's building was completed, SAG, ball mills, flotation and gravity
equipment installed. The new boiler house was commissioned with permanent
heating established in all buildings including the concentrator. ROM ore
crusher and crushed ore reclaim feeders installed.
The construction of the power line linking the site to the grid is in full
swing.
3 months ended Dec 12 months ended Dec
31, % change 31, % change
2020 2019 2020 2019
MINING
Waste mined, 5.3 - NA 10.0 - NA
Mt
Ore mined, Kt 211 - NA 411 - NA
Gold grade, 3.0 - NA
g/t
POX-2 development proceeds on schedule. POX building metal framework have
been completed, and the heating circuit is being finalised. Foundations
for desorption/electrolysis circuits as well as the oxygen station have
been completed; metal structures construction is underway. Detailed
engineering is 95% finalised by Hatch and 50% by Polymetal. Design and
engineering documentation on the key infrastructure facilities is
completed. Concentrate storage facility construction is finalised.
Administrative building construction is nearing completion. Construction
of repair shops and storage depots is in progress.
SUSTAINABILITY, HEALTH AND SAFETY
In 2020, there were no fatal accidents within Polymetal and the Company's
contractors in comparison with two employee fatalities and one contractor
fatality in 2019. LTIFR for employees decreased by 37%, with 11 out of 13
injuries classified as minor. There were four cases where an employee was
hit by an object (one of which resulted in a severe injury for the truck
loader), five cases of tripping and falling, two involving transportation
vehicles, one caused by jamming by a rotating mechanism and one caused by
a falling rock.
Despite a decrease over 2019, road accidents remained among the dominant
risks. To address road safety Polymetal applied a
driver-vehicle-environment approach to develop a detailed road safety
programme consisting of 37 control and mitigation measures. These included
training, health and fatigue monitoring, upgrading safety equipment, route
optimisation, regular road safety inspections and improving work and rest
conditions. The Company improved controls over other risks as well,
applying smart technologies where possible, such as a mine and plant
worker positioning system, devices warning about electric voltage and
collision avoidance systems. In 2020, we piloted a project to digitalise
our shift-by-shift risk assessment model at Dukat mine, enabling employees
to report concerns via a mobile app.
In 2021, Polymetal plans to enhance its safety risk management systems at
our development and exploration projects, where additional risks are
related to staff transportation and accommodation at remote sites.
In line with the Company's constant efforts to increase disclosure
transparency and efficiency, starting in 2021, we are going to introduce
"Scope 3" approach in our safety reporting. This means that we will report
accidents among our contractors outside of the Company's production sites
but related to our activities. Safety KPIs will continue to include only
accidents occurred at our sites.
Polymetal remains committed to its climate change targets:
• 7% of total electricity generation from renewable sources by 2025.
• Decrease in GHG emission intensity by at least 5% by 2023 (vs 2018).
• Develop climate change scenarios in 2021 (on 2030 time horizon).
In order to achieve these goals the Company implements a portfolio of
projects in the following areas:
• Decarbonizing electricity (replacing diesel with renewable energy or
electric grid, i.e. solar plants at Omolon and Svetloye, wind power
plant at Svetloye, grid connection at Nezhda and Albazino).
• Decarbonizing transport (use of battery-electric vehicles and low
carbon transport technologies, i.e. EVs at Varvara, Mayskoye, electric
ore conveyer at Mayskoye).
• Upgrading to energy-efficient technologies (LEDs, energy storage,
etc).
In 2020, as a part of our carbon transition strategy we have adopted Green
Financing Framework and raised a US$ 125 million Green Loan with Societe
Generale to finance the transition. Our total green and
sustainability-linked loan portfolio now reaches US$ 270 million or 16% of
the total outstanding debt.
In Q4, following the 2020 Corporate Sustainability Assessment by S&P,
Polymetal was added to the Dow Jones Sustainability Index World for the
first time and retained its place in DJSI Emerging Markets.
══════════════════════════════════════════════════════════════════════════
ISIN: JE00B6T5S470
Category Code: MSCH
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
Sequence No.: 92527
EQS News ID: 1164257
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
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