Q3 2022 production results

Polymetal 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

• There have been no fatal accidents during the first nine months of 2022 among Polymetal’s workforce and contractors (similar to 9M 2021). In Q3 2022, four minor lost-time incidents were recorded among employees. Lost time injury frequency rate (LTIFR) for the first nine months of 2022 stood at 0.09, a year-on-year (y-o-y) decrease of 18%.

• Q3 gold equivalent (GE) production grew by 7% y-o-y to 490 Koz driven by Nezhda contribution which offset output reductions at Mayskoye (timing of shipments) and Kyzyl (grade). GE output for the first nine months of 2022 declined by 2% y-o-y to 1,187 Koz.

• All construction projects, including POX-2, progressed in line with the revised schedules (refer to further detail within the POX-2 section below) despite continuing supply chain challenges. Kytyn heap leach, part of Albazino hub, delivered first production of 13 Koz in September.

• During the first nine months of 2022, a total of 198 Koz of finished goods inventory was accumulated across the Group’s Russian mines. In late Q3 2022, export sales resumed at full speed and the management expects the gap between production and sales to be closed by the end of the year.

• Revenue for the quarter was down by 13% y-o-y to US$ 714 million, while 9M revenue decreased by 16% to US$ 1,762 million. The decline is attributable to inventory accumulation as well as lower metal prices.

• Net debt at the end of Q3 stood at approximately US$ 2.8 billion (stable since Q2), while by the end of October it decreased to US$ 2.7 billion driven by working capital release.

• The Company reiterates its 2022 full-year production guidance of 1.7 Moz GE and maintains its TCC and AISC guidance of US$ 900-1,000/GE oz and US$ 1,300-1,400/GE oz, respectively.

• Initial guidance for 2023 and 2024 envisages stable production of 1.7 Moz per annum, which is contingent on supply chain risks. Cost guidance for 2023 will be provided in late January 2023 together with the 2022 full year production results.

OPERATING HIGHLIGHTS

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 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.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2022 (for the three months period) and 31 December 2021 (for the nine 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

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.

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CONFERENCE CALL AND WEBCAST

Polymetal updates conference call’s details for the Group’s Q3 2022 Production results on Wednesday, November 2.

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 form 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.