(Alliance News) - Petropavlovsk PLC on Tuesday said while production was higher in 2020, it dipped below guidance as a result of less than expected production from its own mined gold ore as well as third-party concentrate.
The Russia-focused gold miner reported total group gold production of 548,100 ounces for 2020 as a whole, up 6.0% from 517,300 ounces in 2019 but below the bottom end of its guidance for between 560,000 ounces and 600,000 ounces.
This 2020 guidance had already been lowered in October from the previous forecast for between 620,000 ounces and 720,000 ounces.
Petropavlovsk attributed the drop to "lower than expected production from both own mined gold ore and third-party concentrate."
Own mined gold production for 2020 fell to 385,600 ounces from 471,600 ounces in 2019 while third party concentrate gold production was higher year-on-year at 162,500 ounces in 2020 from 45,700 ounces in 2019.
Although third party production was higher, it was still less than expected as a result of Covid-19 related "logistical issues".
Petropavlovsk explained that: "2020 production was less than expected mainly due to delays caused by underground contractors and the Covid-19 pandemic in the preparation of underground mining of high grade ore at the Andreevskaya ore zone, which was due to start-up in [fourth quarter] 2020 but which has now been delayed to [first quarter] 2021."
Production in the fourth quarter alone was lower, falling to 113,500 ounces from 161,700 ounces as a result of a delay in commissioning its Pioneer flotation plant, not scheduled for the second quarter of 2021. This delay means that the planned processing of refractory ore in the fourth quarter was replaced with non-refractory ore, with slightly lower grades but higher recoveries.
Chief Executive Denis Alexandrov said: "The new management team and I have started visiting the mines and conducting a comprehensive review of our 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."
Shares in Petropavlovsk were down 2.3% at 30.40 pence in London on Tuesday morning.
By Anna Farley; annafarley@alliancenews.com
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