POG.L Share News (POG)

(Sharecast News) - Petropavlovsk updated the market on key equipment deliveries for the new flotation plant at Pioneer on Tuesday, as well as a further update on its operations, policies and initiatives in relation to the ongoing Covid-19 coronavirus pandemic.
The FTSE 250 company said that at the Pioneer flotation plant, despite the lockdown measures in place, all key equipment items necessary to complete construction of its second flotation plant had now arrived in Russia.

That, it said, would ensure the project remained on track for commissioning in the fourth quarter of 2020.

Once operating at full capacity, the new flotation plant at Pioneer would double the group's flotation capacity to 7.2 million tonnes per annum, from 3.6 million tonnes.

Looking at its logistics and sales, the firm said it was continuing to monitor its supply chain and was putting in place all necessary precautions to ensure business continuity.

It said that, while the Central Bank of Russia had temporarily suspended gold purchases, commercial banks in Russia were continuing to buy gold bullion, with Petropavlovsk continuing to sell gold through those commercial banks.

The company said it could also export gold bullion, confirming that it had the necessary licences in place required to export gold for sale outside of Russia, and that it shipped gold to the UK and Switzerland in April.

On the subject of health and safety, Petropavlovsk said the health and safety of its workers and the local communities within which it operated remained its highest priority during the pandemic, adding that as of Tuesday, none of its employees had been diagnosed with Covid-19.

There had been "very few cases" registered in the Amur region, which it described as a sparsely populated area roughly equivalent in size to France.

Petropavlovsk's mining operations and POX Hub were "naturally isolated" and away from population centres, with the group implementing measures in each operating jurisdiction to meet government guidelines which were appropriate to the specific needs of each location, including its head offices.

High-level management actions taken included the formation of an emergency response team to limit the spread of Covid-19 at its companies.

Members of the response team would work in cooperation with local authorities, when and if required.

The response team included representatives from each of the group's businesses in Russia, and coordinators had been appointed at each location who were responsible for preventative and counteractive measures.

Group business travel had been restricted, and the firm's Moscow and London offices had been closed until further notice, with written permission required to enter buildings.

Employee and community actions taken included mine shift patterns being adjusted to lower the frequency of new teams arriving onsite, and employees and contractors required to undertake 14 days quarantine in two purpose-built camps before starting each shift.

Medical infrared thermometers were being used daily to take the temperature of employees, and designated isolation zones had been set up to house any individuals showing flu-like symptoms.

In addition to the recommended hygiene measures, a "comprehensive" site awareness campaign was also being carried out.

Awareness programmes targeting the local community had also been put in place, Petropavlovsk said, with the company supporting local businesses and the community through the distribution of masks and hand sanitisers.

As at 2 April, the Russian government introduced a "wide range of measures" including an extension of the non-work period until the end of April, although Petropavlovsk was exempt as a continuous process organisation.

It also expanded the authority of regional heads to set further specific measures relevant for their regions, including certain tax, credit and reporting holidays which were of benefit to certain suppliers to the group's business.

Petropavlovsk said it had been included in the most recently-revised Federal list of Russia's "systemically important" companies.

Additionally, the JSC Pokrovskiy Mine, including Pioneer; LLC Albynskiy Rudnik (Albyn) and LLC Malomirskiy Rudnik (Malomir) companies were all identified as being "strategically important" to the Amur Region.

"This implies more stringent oversight by the federal authorities and local Ministry of Economic Development as well as the executive branch of local government, and the company believes this reduces the risk of business interruption," the board said in its statement.

"Petropavlovsk continues to maintain open dialogue with the authorities to monitor the situation and ensure the company is abiding by all measures and restrictions.

"An announcement will be made immediately to shareholders should there be any material changes to the situation."

At 0841 BST, shares in Petropavlovsk were up 2.58% at 24.77p.