UK Regulatory | 23 January 2020 08:00
Polymetal: Q4 and full year 2019 production results
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Polymetal International plc (POLY)
Polymetal International plcQ4 and full year 201 9 production results
Polymetal International plc reports strong production results for the fourth quarter and twelve months ended December 31, 201 9 .
“ A s trong 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
20 20 OUTLOOK
PRODUCTION BY MINE
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 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: 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 1 7 : 3 0 Moscow time Thursday , 2 3 January , till 1 7 : 3 0 Moscow time Thursday , 30 January , 20 20 . Webcast replay will be available on Polymetal’s website ( 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
F orward -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
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. I n Q4 and FY 2019 , Kyzyl outperformed budget on throughput, grade and production. M an agement expects the average grade to decrease to open-pit reserve average in 2020 as the mining will shift to deeper levels with more unif orm distribution of gold in ore . Concentrator throughput reached the nameplate capacity of 2 Mtpa vs 1.8 Mtpa design capacity . The C ompany intends to push the throughput further to 2.1 Mtpa level by H2 2020. The recovery rate s 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 s hare of gold contained in low-carbon concentrate processed at Amurs k 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
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
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 , FY 2019 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. M ining at Ekaterina-1 was completed in August and t he increased volume of underground ore from Ekaterina-2 positively contributed to quarter-on-quarter grade dynamics . T he recovery rate increased in Q4 year-on- y ear as processing of near-surface partial oxidiz ed 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, t he plant underwent a planned 3 -week shutdown. AMURSK POX
Notes: (1) Veduga and purchased concentrates which are included in reportable production in the Albazino segment. (2) F or information only. Already accounted for in production at operating mines. Gold production at the Amurs k POX increased by 24% in Q4 and 36% in 2019 year-on-year driven by the i ntroduction 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
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 w as 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
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
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
At Svetloye , quarterly production grew by 14% year-on-year on the back of higher stacking volumes following extension of the stac king season until December due to poor weather conditions in the first nine months of 2019. VORO
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 finaliz ed 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 presen ted 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 accord ing to schedule . The concentrator building was fully winterized, equipment installation will start in January. Constructi on 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, t he construction of the two bridges on this roa d continues. At POX-2 , detailed engineering and contracting is ongoing. In Q4, the f ront-end section of the water treatment plant was contracted ( conventional filters from Coralina Engineering , South Africa and reverse osmo s is system from Hydrotech , Russia). The a utoclave 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 employe es 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 approv e the following changes to safety-related CEO and relevant senior managements’ KPIs for 2020:
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 Yego rov (60) as Managing Director of Dukat effective from January 1, 2020 . Dmitry joined Polymetal in 201 1 as the C hief E ngineer 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 |