Polymetal sees no impact from Russia sanctions, plans to pay dividend

Polymetal said there had been no disruption to its operations in Russia and Kazakhstan despite sanctions imposed on Russia after its invasion of Ukraine.

The miner also said it was not owned by anyone connected to Russia under the definition of UK sanctions and added that it currently intends to pay the final dividend as proposed by the board on March 2, 2022.

It added that the scope of operational activities and production guidance remained stable, though it is reviewing nonessential capital projects to preserve liquidity and minimise risk.

Sales of bullion and concentrate from Kazakhstan, from where it derived 48% of Polymetal's net earnings and 40% of gold equivalent reserves, were continuing as normal.

In Russia, Polymetal sells silver concentrate mainly to Kazakhstan and East Asia, and refractory gold concentrate to Kazakhstan and China. It had received assurances from off-takers that all existing contracts were “in good standing”.

However, Russia bullion sales had been affected by sanctions.

Domestic demand for gold in Russia has been supported by the Russian central bank's decision to resume gold purchases.

The company said it held about $400m in cash and cash equivalents with non-sanctioned financial institutions.

Significant free cash flow from Kazakhstan give Polymetal enough of a buffer to fulfill obligations in the next 12 months without new borrowings, although it cautioned high Russian interest rates are expected to affect its average cost of debt for 2022.