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The idea here is not to restore production, this is secondary, but to increase gold due to the printing of currencies by central banks. Capitalization is small, a large volume will powerfully overestimate the company. I hold 450,000 shares
Petropavlovsk (MOEX: POGR) in October 2021
the year produced 1,144 tons of gold (about 37 thousand ounces) from its own raw materials,
follows from the materials of the Ministry of Natural Resources of the Amur region.
Compared to the same month last year, production increased by
27% (although it sank by 5% compared to September of this year).
Production from raw materials of Malomyr increased by 38% year-on-year, to 401 kg,
Pioneer - by 79%, up to 464 kg. Production at the Albyn factory, including 204 kg of
raw materials from the new Elga project, amounted to 279 kg - this is 21% less production
Albyna in October last year. As the company noted earlier, the ore of Elga is more
difficult to process than the ore of Albyn, whose reserves are coming to an end, so
the extraction is lower. Also, part of the ore from Elga is stubborn, its company
does not process it at the moment, but stores it, and the distribution of stubborn and
refractory ore at the deposit is uneven.
According to estimates, a total of 10 months of production
Petropavlovsk decreased by 10% year-on-year, to 9,229 tons (297 thousand ounces).
– How do you see the company's future in five years? What is the level of production, profit and revenue, debt?
- Literally in a month we will be able to answer these questions more clearly. The autoclave is operating at full capacity, most likely with expansion projects either underway or in progress. At least three deposits with a long service life - Albyn, Malomyr, Pioneer with all the factories built. At least the fourth field, which is either in the process of construction or has already been completed. Five years is a sufficient time to bring another field. Stable dividend flow. Automation of production, new equipment, trained people, reduced turnover.
– And what will happen to capitalization?
- Today we are trading at a discount, respectively, this gap should be closed. We will definitely close it in five years, I think we will close it earlier. Probably, some kind of discount can be maintained due to the fact that we simply have a different resource base, i.e. the quality of stocks is slightly different. But we definitely have to close this gap. To do this, we just need to make a strategy, show the market where we are going.
– You are planning to present a development strategy. Can you tell us at least in advance about the main directions?
– We have to submit a development strategy by the end of October. Some figures are still in the approval process.
After the launch [in a year] of the third line of the flotation factory at MALOMYR, the total processing of the project will be about 6 million tons per year. Malomyr will produce more than 200,000 tons of concentrate (about 220,000 tons). pIoneer will issue 100,000-140,000 tons. And this loads our autoclave almost 100%. So according to the "Pioneer", the situation is clear, according to the "Malomyr", the situation is clear, the autoclave is loaded at 100%. "Albyn" is the only cluster that is still under development today. This is about production. The exploration strategy will continue, because the company has quite a lot of exploration assets, we don't talk much about them yet, but they are there.
There is the Tokurskoye field, which is very interesting and has already been partially explored, it is not a "green field" [not an investment from scratch], it needs to be further explored. We had three licenses in the Khabarovsk Territory, plus this year we bought back for nominal money a company that owned five more licenses in the Khabarovsk Territory. Accordingly, next year it will be necessary to do exploratory exploration there. For us, the Khabarovsk Territory is a priority from the point of view of geological exploration.
Are you planning to start paying dividends? In what time frame, what indicator can become the basis for counting dividends and in what amount will payments be calculated from this base - 50, 100%?
- There will be a dividend policy, we have started discussing it with the board of directors. The first discussion took place, everyone agrees that a dividend policy is needed. I won't get ahead of myself yet, because there are different opinions on what dividends should be based on. We looked at what our colleagues were doing. Someone pays from net profit, someone from EBITDA, someone from cash flow. I will only say that there will be a dividend policy, we plan to announce it literally at the end of October. And depending on it, we will determine when we will be able to start paying dividends and to what extent.
The company has historically had a fairly high level of debt. Are there any fears that it may pass to creditors, for example Gazprombank?
– No, there are no such concerns. Five or six years ago, everyone in the market had such concerns. But then the debt was bigger, and it was quite short, and gold prices were different. Today we have a net debt to EBITDA ratio of less than 2, in the region of 1.5 - this is a fairly comfortable level. In addition to the debt, the company had prepayments on gold, which had an interest rate. They are reflected in working capital, they are not included in the amount of net debt, but de facto it is debt. Therefore, back in 2020, Petropavlovsk decided to repay these prepayments. At the beginning of the year, these prepayments were $65 million, by the end of the year we will close this figure completely. For bonds worth $500 million, the maturity date is November 2021, this year we bought part of the bonds from the market. They made an offer for $200 million, bought out $ 136 million, left $ 364 million. With $364 million, we feel much more comfortable in terms of refinancing. This is already lifting money and for a syndicated loan, it is not necessary to go to the bond market. To date, about $120 million of unselected loans. The situation is also much more comfortable than it was at the beginning of the year. Therefore, I do not see the risk that the company will end up in the hands of creditors.
– What are the main trends in the gold market now? Are there any prerequisites for a sharp price reduction in the coming years?
– We don't see it yet. Analysts in the medium term expect the price of gold at $ 1,500 per ounce, which, in principle, is also a comfortable price. But instead of speculating about what the price will be, we need to deal with the cost. There is a proverb that the roof must be repaired while the sun is out, before the rain starts. Actually, we are fixing the roof. We understand that we are not a "pole", our margin is much smaller, and therefore we need to pay even more attention to cost, this is work efficiency
interview
https://www.vedomosti.ru/business/characters/2021/10/11/890708-eksporta-zolota
https://gtrkamur.ru/video/broadcasts/interview/175573
general boos
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https://gtrkamur.ru/video/broadcasts/interview/175573