(Alliance News) - Polymetal International PLC on Monday affirmed annual guidance and said revenue rose in its first quarter, despite sanctions heaping "tremendous pressure" on the company.
Shares in Polymetal were up 6.5% at 287.44 pence each on Monday morning in London.
The St Petersburg, Russia-based gold miner said its first quarter gold equivalent output fell 5.6% yearly to 372,000 ounces from 394,000 ounces. Polymetal blamed this on a planned grade decline at the Albazino and Svetloye gold mines, which more than offset the first material contribution from the Nezhda mine.
It added that sales were lower by 50,000 ounces, primarily due to "concentrate inventory accumulation" at Nezhda and Kyzyl.
However, the company backed its 2022 output guidance of 1.7 million gold equivalent ounces.
Revenue for the recent quarter rose 3.9% year-on-year to USD616 million from USD593 million. Polymetal credited this to higher gold prices and a "historical sales and production gap" in the comparable period a year earlier.
Polymetal's medium-term production guidance stands at 1.65 million ounces for 2023, 1.7 million ounces for both 2024 and 2025 and 1.8 million ounces for 2026.
Total cash cost guidance for 2022 was raised to USD850 to USD950 per gold equivalent ounce from its previous guidance range of USD850 to USD900.
The company's net debt also rose to roughly USD2.0 billion, on the back of higher working capital needs.
It explained that the cost increases are mainly the result of economic sanctions against Russia including domestic inflation, the sharp escalation of logistical costs, and the need to shift to "suboptimal supply sources."
"Devastating war in Ukraine and immense sanctions put tremendous pressure on Polymetal in the first quarter. The company continues to operate safely and profitably and is fully focused on ensuring business continuity and long-term viability. It is with these objectives in mind that the board was forced to postpone dividend decision and rationalize investment plans," Chief Executive Vitaly Nesis said.
"The board and management continue to actively explore options to adjust company asset ownership structure to preserve shareholder value and address the needs of other stakeholders."
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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