Polymetal International said it remains firmly on track to meet its annual production and cost guidance.
"The commissioning of Svetloye, acquisition of Komar and successful integration of Kapan, are important milestones in our medium-term growth plans", said Vitaly Nesis, Group CEO of Polymetal.
"As originally expected, we delivered solid free cash flow for the quarter and remain strongly committed to shareholder returns," he said, alongside the company's Q3 and nine-month production results.
- Polymetal produced 372 Koz of gold equivalent (GE) in Q3 2016, an increase of 29% quarter-on-quarter. The increase in production was driven by seasonal de-stockpiling at Mayskoye, launch of the Svetloye heap leach at Okhotsk operations, and a strong performance at Albazino and Varvara.
- Year-on-year GE production dropped 5% as grades declined at Dukat and Omolon. Polymetal remains on track to deliver 1.26 Moz gold equivalent production for the year. We also re-iterate the cost guidance for the full year: TCC of US$ 525-575/GE oz and AISC of US$ 700-750/GE oz.
- Polymetal generated significant free cash flow in the third quarter. Net debt remained essentially unchanged at US$ 1,469 million after the company paid US$ 38 million of interim dividends and spent US$ 100 million to acquire Komarovskoye.
- At Kyzyl, construction activities are progressing on schedule. The amended subsoil contract, together with the program of work, received the final approval of the Kazakh government. The project remains on track to produce its first concentrate in Q3 2018.
- At Svetloye, gold production commenced in August, delivering 15 Koz of gold during the quarter. Svetloye is currently running at 100% of design capacity and is set to become the key driver for sustaining production levels at the Okhotsk hub in the long term.
- Polymetal regrettably reports a fatal incident at Svetloye on 8th October 2016. The Company will continue to implement additional measures to reinforce safety risk management procedures in order to fully eliminate fatalities at all of its operations.
- Polymetal reconfirms its production guidance for 2017 at 1.4 Moz of GE and for 2018 at 1.55 Moz of GE.
- Polymetal will be hosting an Analyst and Investor Day on November 14 in London to provide an update on key development projects.