Polymetal has completed the divestment of its Russian business on 7 March 2024. Please see the relevant announcement at the link. Operating and financial results as well as other information on this website until 7 March 2024 represent the Group in its former organizational structure, i.e. including Russian business, unless otherwise stated.
15 October 2018
Polymetal International plc reports its production results for the third quarter and nine months ended September 30, 2018.
“We quickly and efficiently ramped up Kyzyl to full capacity”, said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. “The other assets in our portfolio demonstrated a steady performance which leaves us well placed to outperform our original production guidance”.
HIGHLIGHTS
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Polymetal produced 447 Koz of gold equivalent (GE) in the third quarter of 2018, down 5% year-on-year as large volumes of concentrate produced at Kyzyl (36 Koz of gold) and Mayskoye (34 Koz of gold) are to be shipped and booked as production in the fourth quarter. Gold production for the quarter was 356 Koz, down 4% year-on-year, while silver production decreased by 10% to 6.7 Moz as a result of planned grade declines at Dukat. GE production for the first nine months of 2018 was 1,066 Koz, a 4% increase year-on-year and in line with production guidance.
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Kyzyl successfully ramped up to full throughput capacity of 150 Kt per month with a recovery rate of 86%. Concentrate shipments to Amursk POX and to off-takers in China commenced and are expected to match production once the new railway spur is commissioned in October. Since the start-up Kyzyl delivered 47 Koz of gold in concentrate of which 10 Koz was booked in production, and is likely to exceed its production guidance of 80 Koz of payable gold shipped for 2018. The Company will be hosting a site visit at Kyzyl on October 18-19, 2018.
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Q3 revenue was down 16% year-on-year to US$ 459 million on the back of lower metal prices and lower sales volumes due to the build-up of working capital in the form of concentrate. Gold sales volumes totalled 321 Koz, while silver sales totalled 5.3 Moz.
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Net debt increased to US$ 1.8 billion due to the build-up of working capital as the company paid US$ 78 million in regular dividends for 1H 2018 (US$ 0.17 per share). The Company expects to generate the bulk of free cash flow in 2018 in the fourth quarter on the back of de-stockpiling at Kyzyl and Mayskoye. Consequently, a meaningful reduction in net debt is expected to be recorded in Q4.
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Polymetal had no fatalities in Q3 and recorded a meaningful improvement in the Group’s LTIFR for the second consecutive quarter and year-on-year.
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Effective from 24 September, Polymetal was the first Russian company to join the Dow Jones Sustainability Index, ranking 8th among other mining companies in the index series. The Company also improved its Sustainalytics rating, coming in 1st among 47 mining companies worldwide, which made it eligible for the highest available discount on the interest rate on its ING US$ 80 million sustainability performance-linked loan.
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Polymetal is likely to exceed its FY 2018 production guidance of 1.55 Moz of GE by up to 50 koz of GE. The Company reiterates its production guidance of 1.7 Moz for 2019 and 1.8 Moz for 2020 and notes that the guidance will be revised in the event of non-core asset disposals.
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Given the recent weakness of the Rouble and Tenge against the US dollar, it is likely that the Company will outperform its cost guidance of US$ 650-700/GE oz for Total Cash Costs (“TCC”) and US$ 875-925/GE oz for All-in Sustaining Cash Costs (“AISC”).
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The Company will host an Analyst and its inaugural ESG Day on 12 November 2018 in London to provide an update on key development projects and a comprehensive overview of Polymetal’s ESG approach and practices.
|
|
3 months ended Sep 30, |
% change1 |
9 months ended Sep 30, |
% change1 |
||
|
|
2018 |
2017 |
2018 |
2017 |
||
|
|
|
|
|
|
|
|
|
Waste mined, Mt |
33.6 |
29.7 |
+13% |
94.5 |
84.7 |
+12% |
|
Underground development, km |
31.2 |
30.0 |
+4% |
96.8 |
83.9 |
+15% |
|
Ore mined, Mt |
3.6 |
3.1 |
+19% |
10.2 |
9.6 |
+6% |
|
Open-pit |
2.5 |
2.0 |
+26% |
6.7 |
6.4 |
+5% |
|
Underground |
1.2 |
1.1 |
+7% |
3.5 |
3.3 |
+8% |
|
Ore processed, Mt |
4.4 |
3.7 |
+19% |
11.4 |
10.0 |
+14% |
|
Production |
|
|
|
|
|
|
|
Gold, Koz |
356 |
370 |
-4% |
801 |
759 |
+6% |
|
Silver, Moz |
6.7 |
7.4 |
-10% |
19.4 |
20.2 |
-4% |
|
Copper, Kt |
0.9 |
0.9 |
-2% |
2.5 |
1.9 |
+33% |
|
Zinc, Kt |
1.4 |
1.3 |
+3% |
4.3 |
3.6 |
+20% |
|
Gold equivalent, Koz2 |
447 |
470 |
-5% |
1,066 |
1,028 |
+4% |
|
Sales |
|
|
|
|
|
|
|
Gold, Koz |
321 |
363 |
-12% |
766 |
742 |
+3% |
|
Silver, Moz |
5.3 |
5.8 |
-8% |
17.4 |
18.2 |
-4% |
|
Copper, Kt |
0.5 |
0.8 |
-37% |
1.9 |
1.3 |
+49% |
|
Zinc, Kt |
2.1 |
1.2 |
+76% |
4.4 |
3.5 |
+29% |
|
Revenue, US$m3 |
459 |
546 |
-16% |
1,248 |
1,229 |
+2% |
|
Net debt, US$m4 |
1,819 |
1,653 |
+10% |
1,819 |
1,421 |
+28% |
|
Safety5 |
|
|
|
|
|
|
|
LTIFR |
0.07 |
0.11 |
-36% |
0.13 |
0.14 |
-7% |
|
Fatalities |
0 |
0 |
0% |
1 |
1 |
0% |
|
Notes: |
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CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Tuesday, 16 October 2018 at 11:00 London time (13:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 92230744# (free from Russia), or
+44 203 009 24 75 (free from the UK), or
+1 646 722 49 11(free from the US), or
follow the link: http://polymetal161018-live.audio-webcast.com Please be prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal’s website (www.polymetalinternational.com) and at http://polymetal161018-live.audio-webcast.com. A recording of the call will be available immediately after the call at +44 20 3364 5147 (from within the UK), +1 646 722 4969 (USA Toll Free) and +7 495 249 16 71 (from within Russia), access code 418793738#, from 13:30 Moscow time Tuesday, 16 October, till 13:30 Moscow time Tuesday, 23 October, 2018.
Tel. +44.20.7887.1475
Evgeny MonakhovTel. +7.7172.476.655
Kirill Kuznetsov