| Polymetal International plc (POLY)
Polymetal International plc Q3 2022 production resultsPolymetal reports solid production results for the third quarter of 2022. “In Q3, Polymetal stayed on track to meet our full year guidance of 1.7 Moz GE. The Company has successfully completed the restructuring of its sales channels and started to unwind accumulated inventory. We expect strong positive free cash flows in Q4”, said Vitaly Nesis, Group CEO of Polymetal. HIGHLIGHTS
OPERATING HIGHLIGHTS
PRODUCTION BY MINE
Notes: (1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2021 restated accordingly (120:1 Au/Ag conversion ratio was used previously). Discrepancies in calculations are due to rounding. CONFERENCE CALL AND WEBCAST The Company will hold a conference call and webcast on Wednesday, 2 November 2022 at 11:00 London time (14:00 Moscow time). Please complete the registration using the link to participate in the call. Dial-in details will be sent to you via email after registration. To participate in the webcast follow the link: https://www.webcast-eqs.com/polymetal20221102. Enquiries
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
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. At Kyzyl, y-o-y production fell on the back of the planned grade decline towards the reserve average. Grade increased q-o-q as mining shifted from historical underground workings to the higher quality ore blocks. Concentrate and dore sales and shipments (both domestic and to China) have normalized and the Company expects to fully release the accumulated inventories by year-end. VARVARA
Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore. At Varvara, quarterly gold production was up by 9% y-o-y to 51 Koz mostly driven by better grades of Komar ore and larger volumes of higher-grade third party feed through the leaching circuit. Flotation circuit also increased its output on the back of recovery of processing volumes after long maintenance in Q3 2021. Varvara Mine has become the first company in Kazakhstan (and third in Polymetal after Voro and Amursk POX) which was certified for full compliance under the International Cyanide Management Code by the International Cyanide Management Institute (ICMI).
DUKAT
Notes: (1) Technological recovery, includes gold and silver within work-in-progress inventory. In Q3, silver production at Dukat grew by 7% y-o-y to 4.1 Moz due to higher grade from Perevalnoye ore at Omsukchan concentrator as well as contribution from Primorskoye. Planned contraction in gold production at both processing circuits was compensated by Primorskoye output. Primorskoye delivered first batches of high-grade direct-shipment ore to third-party customers. The Company also started milling Primorskoye ore at the Omsukchan concentrator (without beneficiation) for further sales to off-takers as concentrate.
ALBAZINO
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. Albazino Q3 gold production increased by 7% y-o-y to 71 Koz due to the successful start-up of Kutyn heap leach in September (please see the press release for more information), which produced 13 Koz by the end of the month. Kutyn has offset the decline in production from the concentrator driven by the completion of mining at the largest high-grade Anfisa open pit. To ensure equipment availability at the main underground Olga mine, the Сompany transitioned Ekaterina-2 underground mine to care and maintenance in October. The goal is to optimize the management of key spare part stocks..The concentrator will continue operating at full throughput and processing lower-grade stockpiled ore. The management made the decision to delay Albazino grid project timeline by 9 months with commissioning now expected in Q2 2025. The delay will lower capital commitments for 2023 and allow more time to ensure careful selection of electrical equipment in full compliance with all applicable sanctions.
AMURSK POX
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. The decrease in POX production was due to the decline in grade in feedstock sourced from Kyzyl and Albazino. The plant continued to process Nezhda’s low-carbon gold flotation concentrate with reasonable average recovery of 90% for the quarter. OMOLON
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory. In Q3, gold production at Omolon was stable y-o-y. Silver production was down as the Merrill-Crowe circuit remains idle. Heap leach was not engaged in re-handling of high-grade ore stockpiles (as it was in Q3 2021), hence the grade declined y-o-y. Underground mining at Burgali commenced and will replace ore tonnage from the Burgali open pit, to be depleted by the end of the year.
Notes: (1) Includes concentrate produced and stockpiled for future sale, and excludes low-grade material. Expected 90% gold payable ratio is applied. At Nezhda, the majority of the production volume came from payable gold in gravity and silver concentrates. In Q3, the Company started processing gravity concentrate at Voro and Dukat. After the launch of the intensive cyanidation section of POX-2 in Q1 2023, the material will be directed there. Flotation concentrate will now be split into low-carbon and high-carbon materials, similar to Kyzyl. Low-carbon material will be processed, on the basis of two successful trial batch campaigns, through POX-1 at Amursk. High-carbon material will be mostly stockpiled until POX-2 is fully launched in H1 2024. The recovery rate at the concentrator is continuously growing towards the design level as the Company is implementing technological improvements. Grade in ore processed increased q-o-q according to the mine plan. The Company has accumulated sufficient ore stockpiles to ensure full productivity of the flotation plant for several months. Therefore, the management decided to temporarily suspend mining activity at the Nezhda open-pit from December 1st for four months in order to optimize costs..
Quarterly gold production at Svetloye saw a 7% y-o-y increase to reach 33 Koz due to contribution from the Emmy pit where pushback was completed and higher-grade ore blocks introduced into the feed. VORO
Note: (1) Technological recovery, includes gold within work-in-progress inventory. At Voro, gold production for the quarter increased by 21% y-o-y to 26 Koz driven by large-scale introduction of high-grade transitional ore from Peshernoye. Mining volumes were substantially down in the reporting quarter as open-pit mining at Saum was discontinued on the back of deteriorating economics (strong rouble and higher rail tariffs). The management made the decision to accelerate the execution of the second stage of the Urals flotation project. Start-up is now targeted for Q3 2024 (previous plan was 2027). The objective is to bring forward cash flows from high-grade polymetallic deposits.
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. At Mayskoye, Q3 production contracted due to the recovery decrease attributable to higher than expected carbon content with lower sulfide and higher iron grades in the oxide ore. Open-pit mining at Mayskoye has been completed. POX-2 At POX-2, the installation of pulp conditioning and neutralization tanks, air coolers, a pulp cooling tank park, as well as technological equipment for the downstream section has been completed. The installation of structural steel and concrete floors and structures for High Bay is nearing completion. The construction of metal frameworks and concrete works for the installation of technological equipment in the CIL building continues. The start-up of the gravity concentrate processing circuit is planned for Q1 2023. This will allow full in-house processing of gravity concentrates from Nezhda. Full commissioning of POX-2 is expected in Q2 2024 and remains at risk given material supply chain challenges. The management nevertheless remains confident that the current plan is realistic and continues to implement a variety of risk mitigation measures, mostly focused on procuring critical equipment and spares from alternative suppliers. VEDUGA The management made the decision to delay Veduga project timeline by 12 months with first production now expected in H2 2027. This schedule optimization will reduce capital commitments for 2023 and allow for thorough selection of processing equipment to ensure full compliance with all applicable sanctions and flexible construction planning.
SUSTAINABILITY, HEALTH AND SAFETY There were no fatal accidents during the first nine months of 2022 among Polymetal’s workforce and contractors (consistent with 9M 2021). In Q3 2022, six minor lost-time incidents were recorded at Polymetal’s sites: four among employees and two among contractors. Employee LTIFR for the quarter amounted to 0.11 (zero LTIFR in Q3 2021), while 9M LTIFR stood at 0.09, a decrease of 18% y-o-y. All the LTIs have been investigated to eliminate the risks of similar incidents in the future. PERSONNEL Gennady Fukalov was appointed as the Managing Director of Svetloye replacing Vasilina Tarabarova (see below). Gennady is a mining professional with more than 25 years of experience in the industry. He joined Polymetal in 2005 as the mining engineer at Okhotsk Mining and Exploration Company LLC (sold in 2018) and was most recently the Chief Engineer at Kutyn. He graduated from the Krasnoyarsk Institute of Non-ferrous Metals with a degree in underground mining and from Vladivostok State University with a degree in economics and management. Vasilina Tarabarova was appointed as the Managing Director at Kutyn. Vasilina joined Polymetal in 2002 and held various positions at Okhotsk Mining and Exploration Company and Svetloye, having grown from junior to executive roles with her previous position being Managing director at Svetloye. She holds degrees in underground mining and geological survey of solid mineral deposits from Saint Petersburg Mining University as well as a degree in management from Komsomolsk-on-Amur State Technical University.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ISIN: | JE00B6T5S470 |
| Category Code: | UPD |
| TIDM: | POLY |
| LEI Code: | 213800JKJ5HJWYS4GR61 |
| Sequence No.: | 198214 |
| EQS News ID: | 1476835 |
| End of Announcement | EQS News Service |
| |
UK Regulatory announcement transmitted by EQS Group AG. The issuer is solely responsible for the content of this announcement.