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Petropavlovsk sets 2021 guidance and plans management restructure

Wed, 31st Mar 2021 09:30

(Alliance News) - Petropavlovsk PLC on Wednesday set its 2021 production guidance and laid out plans to "simplify" its corporate structure.

For 2021, the Russian gold miner expects its total gold production to between 430,000 and 470,000 ounces, comprising of own gold production of 370,000 to 390,000 ounces and third-party gold production of 60,000 to 80,000 ounces.

For 2020, Petropavlovsk reported total group gold production of 548,100 ounces, below the bottom end of its guidance for between 560,000 ounces and 600,000 ounces.

Petropavlovsk expects production at its Pioneer mine to increase from 2020, driven by higher grades and the commissioning of the 3.6 million tonnes per annum flotation plant by the end of the second quarter. At Albyn, production is guided to slip due to lower volumes and lower recoveries resulting from the switch to processing ore from the nearby Elginskoye deposit.

Malomir's production is guided flat on 2020.

Petropavlovsk said its total capital expenditure for 2021 to be USD140 million compared to USD118 million in 2020.

"Approximately half of the total 2021 sustaining and development capex spend has been allocated to completing construction of the new Pioneer flotation plant and third flotation line at Malomir," the miner explained.

It continued: "Construction of a third line at the Malomir flotation facility will add a further 1.8 million tonnes per annum of capacity from the third quarter of 2022, increasing the group's combined flotation capacity to 9.0 million tonnes per annum."

Petropavlovsk also said its new Chief Executive Officer Denis Alexandrov has carried out a comprehensive review of the business, its corporate structure, internal controls and operational policies.

The miner expects a new medium-term corporate development strategy to be delivered by the third quarter, which will include a proposal for a dividend policy.

The corporate strategy update, the miner noted, is expected to see the completion of a full management restructuring by the end of the second quarter.

This will include: "Addressing management oversight and talent gaps within the existing structure and adding critical core competencies that were missing within the management team."

Petropavlovsk continued: "Opportunities to simplify the corporate structure, improve management systems, standardise processes and reduce G&A costs. Examples include the streamlining of administrative personnel, reduction of duplicated functions and services within the group, removal of intermediaries and the cancellation of contracts with certain counterparties. The review has already resulted in immediate cost savings through revised procurement and contracting procedures."

Shares in Petropavlovsk were 0.4% lower in London on Wednesday morning at 24.00 pence each.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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