UK Regulatory | 24 October 2019 08:00
Polymetal: Q3 2019 production results
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Polymetal International plc (POLY)
Polymetal International plcQ 3 201 9 production results
Polymetal reports solid production results for the third quarter and nine months ended September 3 0 , 201 9 .
“ Continued strong performance at Kyzyl is driving our production dynamics. We now expect to exceed our full-year production guidance” , said Vitaly Nesis, Group CEO of Polymetal . HIGHLIGHTS
PRODUCTION BY MINE
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 Thursday, 24 October 2019 at 12:00 London time (14:00 Moscow time). To partic ipate 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: 2360288 To participate in the webcast follow the link: https://webcasts.eqs.com/polymetal20191024 . 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 2360288 , from 1 7 : 3 0 Moscow time Thursday , 24 October , till 1 7 : 3 0 Moscow time Thursday , 31 October , 201 9 . Webcast replay will be available on Polymetal’s website ( www.polymetalinternational.com ) and at https://webcasts.eqs.com/polymetal20191024 . 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
F orward -looking statements T his release may include statements that are, or may be deemed to be, “forward-looking statements”. T hese forward-looking statements speak only as at the date of this release. T hese 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. T hese forward-looking statements all include matters that are not historical facts. B y 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. S uch 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. F orward-looking statements are not guarantees of future performance. T here 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. T he 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
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 exceed budget on throughput and grade . Gol d in concentrate in Q3 was 106 K oz while payable gold production amounted to 94 K oz . Q3 is expected to be the last quarter with significant positive grade reconciliation. Starting from Q4 mining will continue beyond the near-surface area with significant high-grade lenses and the average grade will revert to open-pit reserve average. The Chinese market for refractory concentrates is continuing to tighten. In response, the Company moved to increase t he s hare of gold contained in low-carbon concentrate processed at Amurs k POX to 70% (v er s us 50% planned). This drove POX recoveries lower, but will ensure higher production and lower costs at Kyzyl at the expense of reducing 3 rd -party concentrate processing. Following the successful completion of several improvement projects , Kyzyl concentrator achieved steady-state throughput of 2. 0 Mtpa , 11 % above the original design . Several initiatives are under way to evaluate pushing throughput to 2.1 Mtpa level by H2 2020. Polymetal Engineering is finalizing a FS-level technical study to re-optimize the open pit under updated operational and economic assumptions . T he results, including the updated Ore Reserves estimate, will be presented o n November 11 at the Analyst and Investor Day .
DUKAT OPERATIONS
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory . At Duk at , quarterly silver and gold production were down 8% and 6% year-on- year respectively . The decline was driven by the Omsukchan concentrator processing larger volumes of lower – grade ore as well as by plann ed reduction in silver grade at Lunnoye mostly attributable to the depletion of high er -grade Zone 9 . Given the significant increase in the silver price , management is evaluating the postponement of the mine closure at Goltsovoye by bringing marginal stopes and areas into production. Such a development will enable full utilization of the Dukat concentrator in 2020.
ALBAZIN O
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 , production dynamics continue d to be affected by lower-grade ore from the Ekaterina-1 open pit. Quarterly production of g old in concentrate decreased by 6% year-on-year . However, a 62% jump in underground ore mined ensured positive quarter-on-quarter grade dynamics despite challenging ground conditions thanks to careful customization of mining methods to specific stope conditions. AMURSK POX
Notes: (1) Veduga and purchased concentrate s which are included in reportable production in the Albazino segment . (2) F or information only. Already accounted for in production at operating mines. Q3 g old production at the Amursk POX increased by 52 % year-on-year driven by the introduction of high-grade Kyzyl concentrate to the feed. By implementing tight feed management procedures , the POX team managed to increase the recovery ratio in comparison with the previous quarter and stabilize it at the level above 94% . In Q2 , the beginning of processing of large quantities of Kyzyl concentrate had significantly changed the operating parameters and led to a decline in recoveries . Increased volume s of high-grade low-carbon Kyzyl concentrate displaced 3 rd party materials . OMOLON OPERATIONS
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory . At Omolon, gold output was up 8% year-on-year while silver outpu t was down 37% as the processing plant switched away from Sopka ore towards feed from Birkachan and Olcha . Following a successful in-fill drilling campaign, o pen-pit mining recommenced at the Bi karchan mine with a view to extend the operation of the heap leach facility. Quarterly volume of ore processed at the Kubaka mill decreased by 16% year-on-year due to the planned 14-day maintenance shutdown to complete SAG headgear replacement .
MAYSKOYE
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 . In Q3, Mayskoye switched back to processing sulphide ore from the underground mine . Consequently, grade fell and recoveries jumped. G old in concentrate produced increased by 24% year-on-year . Shipments of Mayskoye concentrate to Chinese off-takers commenced with the start of navigation period in August . Pay a ble gold in concentrate shipped was up 55% year-on -year . The Chinese concentrate market continues to be challenging with high arsenic material starting to attract heavy penalties. This is likely to have an approximately $150-200 / oz negative impact o n Maysko y e’s TCC and AISC for 2019.
VARVARA
Note s : (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, gold output decreased by 1% year-on-y ear as the leaching ci r cuit underwent the planned replacement of the mill lining. Gold grade processed increased thanks to higher mining and railing volumes at Komar . New company-owned loco has been successfully commissioned and is expected to further drive down Komar ore transportation costs.
VORO
Note: (1) Technological recovery, includes gold within work-in-progress inventory . Q3 gold production at Voro cl imbed by 19% year-on-year as the CIP plant process ed high – grade oxide ore from the southern pit. Waste volume decrease d sharply as the open pit is approaching the end of its life. SVETLOYE
At Svetloye , gold production c ontracted by 22% year-on-year as ore stacking was negatively affected by wet and cold weather in Q3 .
DEVELOPMENT UPDATE At Nezhda , pre- str ipping and construction proceeded accord ing to plan. Repair of the road from the Kolyma federal highway to the mine site was completed. The road is ready for the delivery of technological equipment of the plant and the power station in Q1 20 20. The installation of the metal framework of t he processing plant building was completed, and the manufacturing of internal metal structures is under way. The construction of foundations for the power station and the underground tunnel from the crush er to the concentrator started . The lining of the dry-stack tailings storage facility commenced . A positive conclusion of the state environmental review of the project documentation was received . At POX-2 , the a uto clave foundation boxcut was excavated and the foundation concrete bed prepared. Polymetal signed contracts for high-pressure auxiliary equipment around the autoclave through Hatch . Active construction started at t he new concentrate storage area. SUSTAINABILITY, HEALTH AND SAFETY In Q3, our LTIFR stood at 0.11 versus 0.07 in Q3 2018 with a total of 3 work-related incidents recorded across the Group (2 incid ents in Q3 2018). The increase wa s driven by minor incidents that occurred at remote site s outside of production shifts (falls, slips) . Accordingly, risk assessment and safety training will be adjusted to take into account higher frequency of this type of incidents. In the reporting quarter Polymetal had its ESG ratings up graded – MSCI ESG Ratings score improved from BBB to A , and ISS- Oek om Corporate Rating was raised to C+ . Furthermore, the Company was reaffirmed as a member of the Dow Jones Sustainability Index and FTSE4Good Index Series . As a way to further align our ESG efforts to financial result s , Polymetal signed a new US$ 75 million sustainability-linked credit facility with Societe Generale . The interest rate is tied to the Company’s performance on specific ESG KPIs set by the agreement. PERSONNEL Oleg Voronin (50) was appointed as Managing Director at Al b a zino . Mr . Voronin graduated from the Krasnoyarsk Institute of Non-Ferrous Metal with a degree in underground mining . From 199 3 until 20 09 he held various positions with the Zyryanovsky mining and processing complex (now part of Kazzinc ) , all the way up to the chief engineer. In 20 09 , Oleg joined Polymetal as the chief engineer of Dukat operations. In 2015, he assumed the position of chief engineer at Albazino . |
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| ISIN: | JE00B6T5S470 |
| Category Code: | MSCH |
| TIDM: | POLY |
| Sequence No.: | 24599 |
| EQS News ID: | 895603 |
| End of Announcement | EQS News Service |