Polymetal increases gold production in 2019 by 8%, reduces silver by 15%

In 2019, Polymetal International increased gold production by 8% compared to the previous year, to 1.316 million ounces, silver reduced by 15%, to 21.6 million ounces, the company reported.

Total production in terms of the gold equivalent for the reporting period increased by 3% and 4% exceeded the original production plan of 1.55 million ounces, amounting to 1.614 million ounces in gold equivalent.

Copper production decreased by 37%, to 2.5 thousand tonnes. In the Q4, total production fell by 23% year-on-year to 383 thousand ounces in gold equivalent, which the company attributed mainly to a decrease in the productivity of the Amur Hydrometallurgical Plant as a result of a planned shutdown of production as part of the AMMC-2 project.

The company's annual revenue grew by 19% and reached $2.245 billion amid rising gold prices and rising sales. Revenues in the fourth quarter increased by 1% year on year and amounted to 643 million dollars due to higher prices for precious metals, which offset the low sales volume. Net debt as of the end of 2019 amounted to $1.479 billion, 3% less year on year. The ratio of net debt to EBITDA is expected to be below the target level of 1.5x.

Polymetal confirms the announced annual production plan of 1.6 million ounces of gold equivalent for 2020 and 2021. The company also expects capital expenditures to reach approximately $475 million by 2020. Their increase by $50 million compared with the previous forecast is due to the increased volume of stripping operations at Nezhdaninsky, several investment projects in the field of environmental protection, as well as the strengthening of the rouble.

Cash costs in 2020 are expected to be in the range of $650-700 per ounce of gold equivalent, and total cash costs will average $850-900 per ounce of gold equivalent. "The expected increase in costs compared to 2019 is due to the growth of the rouble and an increase in diesel prices in the Russian market, as well as an increase in the cost of MET and royalties against the background of higher prices for gold and silver," the company explained.

Source