Polymetal: Q3 2020 production results
Polymetal International plc (POLY)
Polymetal International plcQ3 2020 production results
Polymetal reports strong production results for the third quarter of 2020.
"In Q3 the Group continued to exceed production budget and generated massive cash flows on the back of a seasonal release of working capital", said Vitaly Nesis, Group CEO of Polymetal. "We remain vigilant and focused to protect our employees, contractors, and local communities as the COVID-19 pandemic remains a crucial risk for Polymetal". HIGHLIGHTS
COVID-19 UPDATE
COVID-19 STATISTICS AS OF 20.10.2020
OPERATING HIGHLIGHTS
PRODUCTION BY MINE
Notes: (1) Based on 120:1 Au/Ag conversion ratio (prior to Q2 2020, Polymetal used 80:1 Au/Ag ratio) and excluding base metals (previously were included). Historical comparative data restated accordingly.
CONFERENCE CALL AND WEBCAST Polymetal will hold a conference call and webcast on Thursday, 22 October 2020 at 11:00 London time (13:00 Moscow time). To participate in the call, please dial: From the UK: +44 330 336 9125 (local access) 0800 358 6377 (toll free) From the US: +1 929 477 0324 (local access) 800 289 0571 (toll free) From Russia: +7 495 213 1767 (local access) 8 800 500 9283 (toll free) To participate from other countries, please dial any of the local access numbers listed above. Conference code: 9476909 To participate in the webcast follow the link: https://webcasts.eqs.com/polymetal20201022. Please be prepared to introduce yourself to the moderator or register. A recording of the call will be available at +44 207 660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 800 2702 1012 (from Russia), access code 9476909, from 16:30 Moscow time Thursday, 22 October, till 16:30 Moscow time Thursday, 29 October 2020. Webcast replay will be available on Polymetal website (www.polymetalinternational.com) and at https://webcasts.eqs.com/polymetal20201022. About Polymetal 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. Enquiries
Forward-looking statements 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.
KYZYL
Note: (1) For information only; not considered as gold produced and therefore not reflected in the table representing total production. It will be included in total production upon shipment to off-taker or dore production at Amursk POX. (2) To be further processed at Amursk POX. Kyzyl production for Q3 increased by 8% y-o-y to 102 Koz on the back of higher grades in the open pit. Grades will continue to normalize towards reserve average (6.7 g/t) as mining progresses to lower levels where small high-grade lenses are significantly less usual. Recoveries at the concentrator improved by 1 percentage point thanks to continuous optimization of reclaim water quality. Investment in additional thickening and drying capacity is expected to enable stable recoveries despite the introduction of higher-carbon, more refractory ore in 2021.
Notes: (1) To concentrate. (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon sale to off-taker or dore production at Amursk POX. (3) Gold produced from carbon at Amursk POX. At Mayskoye, larger volumes of oxide ore were processed in Q3 compared to the previous year which resulted in higher grades and lower recoveries. The Company decided to continue open-pit mining through another pushback at Zone 1. The management believes that the pushback will create substantial value in the current gold price environment. In addition, open-pit ore tonnage will reduce risks at the underground mine where development for the new material handling system (electric conveyor replacing diesel trucks) has started. Shipment of concentrate to China has commenced in August. Chinese off-take market remains strong with substantial demand from new customers.
ALBAZINO
Notes: (1) To concentrate. (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production after Dore production at the Amursk POX. At Albazino, quarterly gold production was down 13% y-o-y to 65 Koz driven by lower grade and throughput. The Anfisa open pit, long the mainstay of ore production, is nearing its depletion in early 2022. Gold recovery at the concentrator improved by 2 p.p. y-o-y as the operating team tweaked the reagent addition rates to cope with higher quantities of complex ore from Ekaterina-2. Underground development declined significantly due to challenging geotechnical conditions at deeper levels of the Olga underground mine. Permanent downgrade to underground mine productivity led to the decision to cancel plans to double the size of the underground mine. Production shortfall will be compensated largely by the recently approved Kutyn heap leach project. Kutyn will be developed as part of the Albazino hub with first gold pour expected in Q2 2023.
AMURSK POX
Notes: (1) Purchased concentrates which are included in reportable production in the Albazino segment. (2) For information only. Already accounted for in production at operating mines. Gold production for the quarter at the Amursk POX decreased by 5% y-o-y to 127 Koz due to the absence of concentrate from Veduga ore. The facility successfully underwent a regular 2-week maintenance shutdown in early October.
OMOLON OPERATIONS
Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory. At Omolon, gold output for the quarter jumped by 53% y-o-y while silver production was down 70%. Kubaka mill processed gold-rich ore from Birkachan underground and Yolochka through the CIP circuit as opposed to Sopka ore with higher silver content though the Merrill-Crowe circuit in 2019. Heap leach production positively contributed to the total output on the back of stacking of larger volumes of higher-grade ore stockpiles. Open-pit mining was down as Birkachan and Olcha pits are nearing end of mining in Q4 2020. Preparations have started to commence open-pit mining at the new satellite deposit, Burgali, in Q2 2021.
DUKAT OPERATIONS
Notes: (1) Technological recovery, includes gold and silver within work-in-progress inventory. At Dukat, silver grade decreased y-o-y resulting in production being down by 7% to 4.4 Moz. At the same time, the mine exceeded the budget grade on the back of lower than expected dilution enabled by expanding usage of smaller equipment and narrower mining widths. Underground development volumes declined materially following the decommissioning of the Goltsovoye underground mine. In response to material silver price growth, lower-grade areas at Dukat will be systematically re-evaluated to identify potentially economic stopes which were left behind in the period of lower silver prices.
VARVARA
Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore. (2) To be further processed at Amursk POX. Varvara demonstrated strong gold production y-o-y increase of 35% to 46 Koz in Q3 and 25% to 130 Koz in 9M driven by larger volumes of high-grade third-party ore through the flotation circuit and better recoveries attributable to the flow sheet improvements. Average gold grade in ore processed at the leaching circuit was down 12% y-o-y on the back of planned decrease of gold grade at Komar.
SVETLOYE
At Svetloye, quarterly gold production decreased by 15% y-o-y to 39 Koz as larger volumes of ore from the Emmy pit with lower recoveries and slower kinetics were stacked. VORO
Note: (1) Technological recovery, includes gold within work-in-progress inventory. In Q3, Voro saw an increase in production of 24% y-o-y to 35 Koz due to work-in-progress release at both CIP and heap leach facilities. Production from the current operations was down y-o-y as CIP turned to processing lower-grade stockpiles after mining was completed in 2020. DEVELOPMENT UPDATE At Nezhda, mining and construction activities have been progressing on schedule. Installation of flotation and gravity concentration equipment is completed. New boiler house was commissioned with permanent heating established in all buildings including the concentrator. ROM ore crusher and crushed ore reclaim feeders installed. The installation of pylons for the external grid power line commenced. Ore mining started.
POX-2 development proceeds on schedule. Construction is currently focused on POX and oxygen station buildings. The autoclave vessel has been successfully installed on its foundation in August. Oxygen plant has been delivered on site. Construction of downstream areas (CIL, desorption/electrolysis) commenced. At Veduga, ore mining ceased in October with focus shifting to building the exploration decline and pre-stripping ahead of the potential approval of the project in 2021. SUSTAINABILITY, HEALTH AND SAFETY There were no fatal accidents during 9M 2020 within Polymetal and the Company's contractors. LTIFR for the reporting quarter grew by 36% y-o-y to 0.15 as 4 minor incidents were recorded in comparison with 3 minor incidents in Q3 2019. During the first 9 months of 2020 there were 8 minor work-related incidents in total, LTIFR stood at 0.10, a decrease of 47% y-o-y. In Q3, the Company's leadership in ESG was reaffirmed by FTSE Rusell which maintained Polymetal as a constituent of FTSE4Good Index Series with 4.4 score (out of possible 5) and 92 percentile. Polymetal was also awarded Best Communication of ESG by IR Magazine.
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ISIN: | JE00B6T5S470 |
Category Code: | MSCH |
TIDM: | POLY |
Sequence No.: | 86343 |
EQS News ID: | 1142340 |
End of Announcement | EQS News Service |
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