Q3 2021 production results

26 October 2021

Polymetal reports solid production results for the third quarter of 2021.

“Start of production at Nezhda capped a solid Q3 performance. Polymetal’s portfolio of mines delivered results in line with the budget with the company firmly on track to meet its full-year production guidance”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

  • There have been no fatal accidents during the first nine months of 2021 among Polymetal’s workforce (similar to 9M 2020). As reported previously, on July 18 a drilling contractor lost his life at the Saum open-pit mine. Accident response details can be found in the Health & Safety section of this announcement. There were no lost-time injuries in Q3.

  • Q3 gold equivalent (“GE”) production decreased by 8% y-o-y to 437 Koz as results reverted to the mean from the all-time quarterly production record set in Q3 2020. GE output for nine months was down by 4% to 1,151 Koz driven by planned grade declines at Kyzyl, Svetloye and Voro.

  • Russia is going through the fourth wave of the COVID pandemic with multiple daily highs set recently for both new cases and deaths. At Polymetal, the number of active cases rose to 72 as of the date of this press release. The epidemiological situation remains under control with operations and projects continuing undisrupted despite several localised outbreaks.

  • COVID-related transportation restrictions at railway and seaports in China persist. However, the Company successfully shortened concentrate transit times by switching from bulk (boxcar) to container shipping. The lag between sales and production as well as excess working capital decreased significantly and are expected to be eliminated by the year-end.

  • Revenue for the quarter declined by 7% y-o-y to US$ 819 million driven by lower gold and silver prices. 9M revenue reached US$ 2,093 million, up 4% y-o-y. Net debt marginally increased for the quarter to US$ 1.90 billion as the Company generated substantial free cash flows and paid an interim dividend of US$ 0.2 billion (45 cents per share).

  • Nezhda produced first concentrate on October 16, two weeks ahead of the previously announced target date (November 1st). The Company expects to reach the plant’s nameplate capacity and full design recovery by April 2022. POX-2 construction is progressing on schedule. All heavy equipment arrived on site and has been installed.

  • In October, Polymetal received an ESG Risk Rating of 15.91 and was assessed by Sustainalytics to be at low risk of experiencing material financial impact from ESG factors. This is an improvement from the prior year rating of 20.3 (medium risk). Polymetal is now ranked by Sustainalytics within top 3 precious metals companies globally.

  • The Company is on track to meet its full-year 2021 production guidance of 1,500 GE Koz. TCC and AISC guidance of US$ 700-750/GE oz and US$ 925-975/GE oz respectively is maintained. The cost guidance remains contingent on the RUB/USD and KZT/USD exchange rates.

  • Polymetal will host its Analyst & Investor Day on November 8 in the format of a video webcast and conference call. The management will provide updates on mid-term production and CAPEX guidance as well as on the key development projects.

Note:
(1) https://www.sustainalytics.com/esg-ratings

OPERATING HIGHLIGHTS

 

 

3 months ended Sep 30,

% change1

9 months ended Sep 30,

% change1

 

2021

2020

2021

2020

 

 

 

 

 

 

 

Waste mined, Mt

54.1

43.8

+24%

152.0

122.8

+24%

Underground development, km

24.2

21.0

+15%

70.5

67.4

+5%

Ore mined, Mt

4.1

4.0

+1%

11.6

12.0

-3%

Open-pit

3.1

2.9

+5%

8.7

8.9

-2%

Underground

1.0

1.1

-10%

2.9

3.1

-7%

Ore processed, Mt

4.1

4.0

+3%

11.7

11.8

-1%

Average GE grade processed, g/t

3.4

3.8

-11%

3.5

3.9

-10%

Production

 

 

 

 

 

 

Gold, Koz

399

438

-9%

1,035

1,080

-4%

Silver, Moz

4.5

4.6

-3%

13.9

14.4

-4%

Gold equivalent, Koz2

437

477

-8%

1,151

1,200

-4%

Sales

 

 

 

 

 

 

Gold, Koz

406

410

-1%

1,002

1,005

-0%

Silver, Moz

4.6

4.2

+10%

12.6

14.1

-11%

Revenue, US$m3

819

884

-7%

2,093

2,019

+4%

Net debt, US$m4

1,897

1,827

+4%

1,897

1,351

+40%

 

 

 

 

 

 

 

LTIFR5

0

0.15

-100%

0.11

0.10

+10%

Fatalities

0

0

NA

0

0

NA

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 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 31 June 2021 (for the three months period) and 31 December 2020 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.

PRODUCTION BY MINE

 

3 months ended Sep 30,

%

change

9 months ended Sep 30,

%

change

 

2021

2020

2021

2020

 

 

 

 

 

 

 

GOLD EQ. (KOZ)1

 

 

 

 

 

 

Kyzyl

91

102

-10%

274

314

-13%

Albazino

67

65

+3%

190

204

-7%

Varvara

47

46

+2%

157

130

+21%

Omolon

60

65

-8%

157

153

+2%

Dukat

44

48

-8%

142

152

-6%

Mayskoye

75

77

-3%

85

78

+9%

Svetloye

31

39

-22%

84

91

-8%

Voro

22

35

-36%

62

77

-19%

TOTAL

437

477

-8%

1,151

1,200

-4%

Notes:
(1) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.

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CONFERENCE CALL AND WEBCAST

The Company will hold a conference call and webcast on Tuesday, 26 October 2021 at 10:00 London time (12:00 Moscow time).

To participate in the call, please dial:

From the UK:
+44 203 984 9844 (local access)
+44 800 011 9129 (toll free)

From the US:
+1 718 866 4614 (local access)
+1 888 686 3653 (toll free)

From Russia:
+7 495 283 9858 (local access)

To participate from other countries, please dial any of the local access numbers listed above.

Conference code: 785872

To participate in the webcast follow the link: https://mm.closir.com/slides?id=785872.

Please be prepared to introduce yourself to the moderator or register.

A recording of the call will be available at the same numbers and webcast link listed above within an hour after the call and until 2 November 2021.

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Polymetal International plc (together with its subsidiaries — “Polymetal”, the “Company”, or the “Group”) is a top-10 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.
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.
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Investor Relations Contacts

Tel. +44.20.7887.1475

Evgeny Monakhov

Tel. +7.812.313.5964

Kirill Kuznetsov
ir@polymetalinternational.com

Media Contacts

Tel. +44.20.3727.1000

Leonid Fink
Viktor Pomichal

While the selected annual report is being downloaded, we want to draw your attention to the Sustainability Report. It provides detailed information on ESG indicators.

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2019