RNS30 Mar 2022 10:42
Polymetal International plc (POLY) Polymetal: Business update and impact of sanctions 30-March-2022 / 09:00 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
Release time
IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date
30 March 2022
Polymetal International plc
Business update and impact of sanctions
Polymetal provides a further update on the impact of sanctions and other recent developments in Russia on its business.
At the time of writing, the Group states that:
Sale of bullion/concentrate
Sales of bullion and concentrate from Kazakhstan continue as usual. In Russia, sales of gold and silver concentrates continue normally to East Asia and Kazakhstan. Shipments have been temporarily impacted by the change of freight and logistics service providers, which is likely to result in higher costs. Sales of gold bullion in Russia have been restored to new counterparties on terms consistent with those received earlier. Domestic demand for gold is boosted by local retail investment. The recent Central Bank of Russia statement that the bank will buy gold from commercial banks at a fixed price of RUB 5,000/g (approx. US$ 1,800/oz at the time of the writing) is not expected to affect Group's sales price materially as gold continues to be sold at global market price, both for exports and to satisfy physical retail demand.
Liquidity & net debt
Net debt increased to US$ 1.94 billion as of 29 March (31 December 2021: US$ 1.65 billion) mainly driven by seasonal working capital increase and accelerated procurement. 94% of the total debt is denominated in US dollars. The Group has approx. US$ 0.4 bn in cash and cash equivalents deposited with non-sanctioned financial institutions. In addition, the Company maintains US$ 0.5 billion of undrawn credit lines from non-sanctioned Russian financial institutions, while additional liquidity is expected to become available in Q2 2022 as banks gradually re-open lending. Lending from Russian banks is available in RUB only. RUB interest rates are 23-25% on average following Central Bank's base rate increase to 20%. The Group is utilising these facilities occasionally for short-term working capital financing.
Board
New five independent directors and a new Chair were appointed. The Board now consists of eight members, of which six are independent non-executive directors, and is fully compliant with the UK Corporate Governance Code requirements. New Board appointments are out for shareholder approval at the forthcoming AGM on 25 April. Please see the Board and Committees' composition at the link.
"It is my opinion that investors, private and institutional, that collectively control over 75% of this company deserve a Board that will lead the company through this turbulent time, preserving and hopefully rebuilding the value of their investment as well as protecting the livelihood of thousand
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