Polymetal first quarter output drops, reiterates annual guidance

Gold and silver miner Polymetal International reported a drop in first quarter output due to a decline in grades at two of its mines, but reiterated its annual production guidance.

The Russia and Kazakhstan-focused miner said grade declines at the Dukat and Omolon sites and a temporary suspension of the float circuit at Varvara saw its first quarter production of gold equivalent decline 5% year-on-year to 299,000 ounces.

Gold production declined 3% in the first quarter to 186,000 ounces, while silver production dropped 7% to 6.8m ounces.

The FTSE 250 group said total sales declined 11% to $298m, as gold sales rose 1% but silver sales plunged 14%.

In a statement released on Thursday, the group said the development of its Kyzyl project remained on track, with the feasibility study set to be published in October.

The company reiterated its annual production guidance of 1.35m ounces of gold equivalent and affirmed its cash cost guidance of between $325 and $575 per gold equivalent ounce.

However, Polymetal said its cash cost guidance was subject to be affected by the ruble-dollar exchange rate.

Polymetal shares were up 0.17% to 578.50p at 09:34 on Thursday.