Petropavlovsk misses production guidance for 2020

Petropavlovsk updated the market on 2020 on Tuesday, reporting total gold production for the year of 548,100 ounces, up 6% year-on-year.

The FTSE 250 company said that was slightly below its guidance range, due to lower-than-expected production from both own-mined gold ore and third-party concentrate.

Own mined gold production amounted to 385,600 ounces for 2020, down from 471,600 ounces in 2019, with a weak fourth quarter occuring at all operations.

Third-party concentrate gold production increased to 162,500 ounces for the year, from 45,700 ounces, although that was lower than expected mainly due to logistical issues associated with the Covid-19 pandemic.

Petropavlovsk said full-year gold sales totalled 546,500 ounces, up from 514,000 ounces in 2019.0

Average realised gold prices were “significantly higher”, the board said, gaining 33.6% in the fourth quarter and 29.8% in the full year.

There were zero gains or losses from hedging in both the fourth quarter and the full year, which compared to small losses in the previous periods.

“Faced with several challenges in 2020, and in the fourth quarter in particular, we were still able to deliver a notable 6% year-on-year increase in gold production, slightly below our guidance but broadly in line with market expectations,” said chief executive officer Denis Alexandrov.

“We also made solid progress on our development projects such as the Pioneer flotation plant and Malomir expansion.”

Alexandrov said the company’s new management team had started visiting mines and conducting a “comprehensive review” of operations, management structure, and budget and forecast for 2021.

“This work will position us to update our guidance on production and capital expenditure targets for the year ahead.”

At 0840 GMT, shares in Petropavlovsk were down 1.29% at 30.7p.