24 Jul 2018 07:03
Press Release 24 July 2018
PJSC Polyus
Trading update for the second quarter of 2018
PJSC Polyus ("Polyus" or the "Company") today releases its 2Q 2018 operating results for the period ending 30th June 2018.
2Q 2018 Highlights
· Total gold output increased 19% to 602 thousand ounces compared to the previous quarter (1Q 2018: 507 thousand ounces). Year on year, volumes of doré gold and total gold output rose by 18% and 23%, respectively.
· Volumes of ore mined amounted to 9,317 thousand tonnes, a 6% increase on the previous quarter and 1% increase year on year.
· Volumes of ore processed rose to 9,872 thousand tonnes, up 16% on the previous quarter and 43% on the second quarter of 2017. This growth reflected progress on capacity expansion projects at existing operations as well as the launch of the Natalka Mill. Capacity expansion at the Company's core assets remains under way.
· Volumes of antimony contained in flotation concentrate amounted to 6.2 thousand tonnes. In April 2018, Polyus obtained a license to export antimony-rich flotation concentrate to third-party offtakers and began first shipments in May.
· Natalka is currently operating at above 90% of its design capacity. Polyus expects to complete the ramp-up of the Natalka Mill in the second half of 2018.
· The Scoping Study at Sukhoi Log has been completed.
· Estimated gold sales amounted to $683 million, up 12% compared to the previous quarter, with an estimated weighted-average gold selling price of $1,300/oz (down 3% on the first quarter of 2018).
· Estimated net debt stood at $3,208 million as at 30 June 2018, compared to $3,079 million as at the end of the previous quarter and $3,077 million as at the end of 2017.
1H 2018 Highlights
· Total gold output increased to 1,109 thousand ounces, compared to 938 thousand ounces in the first half of 2017, an 18% increase on a year on year basis. Doré volumes totalled 1,166 thousand ounces, up 20% compared to the prior-year period.
· Volumes of ore processed rose 36% year on year to 18,364 thousand tonnes mainly due to the Natalka Mill ramp-up and also expansions of the existing operations.
· Recovery rate stood at 81.0%, down 2.6 ppts from the prior-year period. Recoveries at the group level, adjusted for the Natalka operations, stood at 82.4%.
· Estimated gold sales increased 6% year on year to $1,291 million, with an estimated weighted-average gold selling price of $1,317/oz, up 4% compared to the first half of 2017.
Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:
Polyus has had a strong second quarter. We have been actively increasing the share of large-scale mining equipment, expanding processing capacities as well as upgrading management and control systems across our core operations. These initiatives have further improved efficiency of our operations and contributed to double-digit growth of gold output compared to the same period of last year.
The ramp-up of production at Natalka, our key development project, is in its final stage. The Natalka Mill is already operating at above 90% of its design throughput capacity of 10 million tonnes on an annualized basis. We expect to complete ramp-up at Natalka in the second half of the year.
At Sukhoi Log, one of the world's largest gold greenfield projects, we have completed the Scoping Study and verification drilling, and entered the pre-feasibility stage. The results of Polyus' verification drilling support the data from historical exploration programmes and we remain confident in the potential of this deposit to drive significant growth for the group in the future."
Health and safety update
The LTIFR rate for the second quarter of 2018 stood at 0.13, compared to 0.11 registered in the prior-year period.
With great regret, Polyus reports that a work-related fatality took place at the Olimpiada operations in June 2018. During the installation of a pipeline for flotation concentrate at the BIO facility, one of our colleagues fell from a height and sustained fatal injuries. This loss of life is completely unacceptable, and the accident is currently under investigation by a special commission formed by Polyus. The safety of our employees is our primary concern and remedial actions will be taken to ensure that a similar incident cannot take place again.
The Company works continually to ensure that it has the appropriate health and safety practices in place and that all personnel receive the optimal training. Over the course of the second quarter of 2018, eight HSE inspections took place across all business units in order to check compliance with HSE requirements. Diagnostic testing of the integrated HSE control system was carried out in Polyus' business units. In addition, ICMM representatives attended a workshop "Mining with Principles: Safety in Focus", which was held by Polyus in the reporting period.
Lost Time Injury Frequency Rate (LTIFR) [i] | |||
2Q'18 | 2Q'17 | 1H 2018 | 1H 2017 |
0.13 | 0.11 | 0.10 | 0.14 |
Consolidated operating results
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Olimpiada | 276.0 | 213.1 | 30% | 297.9 | 264.1 | 226.2 | 22% | 489.1 | 445.3 | 10% |
Blagodatnoye | 102.0 | 91.4 | 12% | 126.7 | 116.0 | 105.8 | -4% | 193.4 | 214.0 | -10% |
Verninskoye | 53.3 | 58.6 | -9% | 45.6 | 53.1 | 53.3 | 0% | 111.9 | 107.0 | 5% |
Alluvials | 23.7 | - | n.a. | 29.8 | 85.0 | 30.9 | -23% | 23.7 | 30.9 | -23% |
Kuranakh | 44.1 | 46.5 | -5% | 48.4 | 43.4 | 38.7 | 14% | 90.6 | 79.7 | 14% |
Natalka | 39.8 | 22.5 | 77% | 3.3 | - | - | n.a. | 62.3 | - | n.a. |
Refined gold, koz | 538.9 | 432.1 | 25% | 551.7 | 561.6 | 454.9 | 18% | 971.0 | 876.9 | 11% |
Flotation concentrate production, t | 27,826 | 35,760 | -22% | 13,620 | 39,892 | 17,450 | 60% | 63,585 | 31,449 | 102% |
Antimony in flotation concentrate, t | 6,219 | 7,441 | -16% | - | - | - | n.a. | 13,660 | - | n.a. |
Gold in flotation concentrate, koz | 63.1 | 74.4 | -15% | 28.1 | 80.7 | 33.0 | 91% | 137.5 | 61.2 | 125% |
Gold payable in concentrate, koz | 46.7 | 55.1 | -15% | 19.7 | 56.5 | 23.1 | 102% | 101.8 | 42.8 | 138% |
Total gold output, koz | 602.0 | 506.5 | 19% | 579.8 | 642.3 | 487.9 | 23% | 1,108.5 | 938.1 | 18% |
Rock moved, kt | 72,808 | 67,134 | 8% | 63,256 | 61,898 | 52,197 | 39% | 139,942 | 99,269 | 41% |
Stripping ratio, t/t | 6.8 | 6.6 | 3% | 5.3 | 5.2 | 4.7 | 45% | 6.7 | 4.6 | 46% |
Ore mined, kt | 9,317 | 8,821 | 6% | 10,065 | 9,915 | 9,210 | 1% | 18,138 | 17,830 | 2% |
Ore processed, kt | 9,872 | 8,492 | 16% | 7,809 | 7,299 | 6,925 | 43% | 18,364 | 13,555 | 36% |
Recovery rate, % | 80.6% | 81.5% | -0.9ppts | 82.7% | 83.8% | 83.9% | -3.3ppts | 81.0% | 83.6% | -2.6ppts |
Total doré & slime gold output, koz | 627.6 | 538.8 | 16% | 554.7 | 635.8 | 531.5 | 18% | 1,166.4 | 971.4 | 20% |
2Q 2018 Highlights
· Total gold output in the second quarter of 2018 amounted to 602 thousand ounces, compared to 507 thousand ounces in the first quarter of 2018. The increase was driven by higher production volumes at Olimpiada and Blagodatnoye, the start of the washing season at Alluvials and the ongoing ramp-up of Natalka.
· Volumes of ore mined amounted to 9,317 thousand tonnes, up 6% on the previous quarter, reflecting higher ore mined volumes at Olimpiada and Natalka.
· Volumes of ore processed increased 16%, to 9,872 thousand tonnes, compared to the previous quarter, due to higher processing volumes at the Natalka Mill, the start of heap leaching operations at Kuranakh and an increased hourly throughput at Olimpiada, Blagodatnoye and Kuranakh.
· Recovery rate stood at 80.6%, down 0.9 ppts from the previous quarter, due to lower recoveries at Olimpiada and reflecting the on-going ramp up at Natalka. The recoveries at the group level, adjusted for the Natalka operations, amounted to 82.1%.
· Flotation concentrate output amounted to 27.8 thousand tonnes, down 22% on the previous quarter, due to scheduled maintenance at Mill-1. Consequently, volumes of antimony and gold contained in flotation concentrate declined 16% to 6.2 thousand tonnes and 15% to 63 thousand ounces, respectively.
1H 2018 Highlights
· Total gold output in the first half of 2018 was 1,109 thousand ounces (including 138 thousand ounces of gold contained in concentrate from Olimpiada), compared to 938 thousand ounces in the first half of 2017. This growth was driven by increased production volumes at Olimpiada and the start of operations at Natalka. Doré volumes totalled 1,166 thousand ounces, up 20% compared to the prior-year period.
· Volumes of ore processed increased to 18,364 thousand tonnes, compared to 13,555 thousand tonnes in the first half of 2017, reflecting implementation of expansion projects at Polyus' core assets as well as the launch of the Natalka Mill.
· Recovery rate stood at 81.0%, down 2.6 ppts from the prior-year period, driven by the on-going ramp up at Natalka and a decrease in recoveries at Olimpiada and Blagodatnoye. The recoveries at the group level, adjusted for the Natalka operations, amounted to 82.4%.
· The Company produced 63.6 thousand tonnes of flotation concentrate, up 102% on the prior-year period. Volumes of antimony contained in flotation concentrate totalled 13.7 thousand tonnes.
Olimpiada
2Q 2018 Highlights
Ø Total gold output was 339 thousand ounces.
Ø Volumes of ore processed rose 6% on the previous quarter.
Ø Volumes of antimony contained in flotation concentrate amounted to 6.2 thousand tonnes.
Gold output
Doré gold output in the second quarter of 2018 was 341 thousand ounces, up 7% compared to the previous quarter, mainly due to higher processing volumes. Total gold output (refined and concentrate) rose 18% compared to the previous quarter, to 339 thousand ounces, mainly driven by lower volumes of gold in the inventory at the refinery. Both doré gold and refined gold output increased 22% compared to the second quarter of 2017, while total gold output rose by 31% during the same period.
Mining works
Rock moved volumes totaled 29,691 thousand tones, a 4% increase on the first quarter of 2018. Volumes of ore mined rose to 3,698 thousand tonnes, from 3,420 thousand tonnes in the previous quarter. In line with the mining plan, the Company intensified mining activities at higher-grade zones of the deposit, increasing volumes of high-grade stockpiled ore in order to provide Mill-2 and Mill-3 with optimal feed. Average grade in ore mined rose to 4.04 g/t, compared to 3.79 g/t in the previous quarter.
In the reporting period, Polyus commisioned one Komatsu WD600-6 bulldozer, two TYHI WK-35 excavators and five САТ 793D trucks with payload capacity of 220 tonnes, increasing the share of large-scale mining equipment operating at Olimpiada.
Ore processing
Volumes of ore processed rose 6% to 3,337 thousand tonnes, compared to the first quarter of 2018. This growth reflects increased hourly throughput at Mill-2 as well as the sequence of maintenance works at Olimpiada.
Mill-1 underwent scheduled maintenance during the reporting period, while maintenance works at Mill-2 were completed in the first quarter of 2018. The Company is currently implementing further Mills expansion at Olimpiada, with throughput capacity of 13.4 million tonnes per annum expected to be reached in 2020.
Volumes of antimony contained in flotation concentrate amounted to 6.2 thousand tonnes, down 16% on the previous quarter, due to scheduled maintenance works at Mill-1.
The average grades in ore processed at Olimpiada declined to 4.10 g/t from 4.17 g/t in the previous quarter. Recovery rate declined to 79.0%. Variations in the feed mineralogy along with temporary voltage drops impacted BIO process, while higher antimony content in ore led to an increase of gold losses in flotation tailings at Mill-3. Polyus expects recovery rates to increase going forward as the Company proceeds with separate processing of antimony-rich ore and operational initiatives targeting recovery improvement.
Mining works and ore processing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Rock moved, kt | 29,691 | 28,507 | 4% | 24,108 | 20,812 | 16,349 | 82% | 58,198 | 31,146 | 87% |
incl. stripping, kt | 25,993 | 25,088 | 4% | 20,960 | 17,777 | 13,323 | 95% | 51,081 | 25,146 | 103% |
Stripping ratio, t/t | 7.0 | 7.3 | -4% | 6.7 | 5.9 | 4.4 | 59% | 7.2 | 4.2 | 71% |
Ore mined, kt | 3,698 | 3,420 | 8% | 3,149 | 3,035 | 3,026 | 22% | 7,118 | 6,000 | 19% |
Average grade | 4.04 | 3.79 | 7% | 3.90 | 4.19 | 4.18 | -3% | 3.92 | 4.12 | -5% |
Ore processed, kt | 3,337 | 3,155 | 6% | 3,140 | 3,490 | 2,882 | 16% | 6,492 | 5,812 | 12% |
Average grade in ore processed, g/t | 4.10 | 4.17 | -2% | 3.94 | 3.93 | 3.84 | 7% | 4.13 | 3.65 | 13% |
Recovery, % | 79.0% | 80.0% | -1.0ppts | 80.2% | 81.4% | 81.3% | -2.3ppts | 79.5% | 80.6% | -1.1ppts |
Doré gold (incl. gold in concentrate), koz | 340.6 | 318.0 | 7% | 307.1 | 347.4 | 278.3 | 22% | 658.6 | 515.7 | 28% |
Refined gold output, koz | 276.0 | 213.1 | 30% | 297.9 | 264.1 | 226.2 | 22% | 489.1 | 445.3 | 10% |
Flotation concentrate production, t | 27,826 | 35,760 | -22% | 13,620 | 39,892 | 17,450 | 60% | 63,586 | 31,449 | 102% |
Antimony in flotation concentrate, t | 6,219 | 7,441 | -16% | - | - | - | n.a. | 13,660 | - | n.a. |
Gold contained in concentrate, koz | 63.1 | 74.4 | -15% | 28.1 | 80.7 | 33.0 | 91% | 137.5 | 61.2 | 125% |
Total gold output, koz | 339.1 | 287.5 | 18% | 326.0 | 344.8 | 259.2 | 31% | 626.6 | 506.5 | 24% |
Blagodatnoye
2Q 2018 Highlights
Ø Refined gold output amounted to 102 thousand ounces.
Ø Volumes of ore mined totaled 1,445 thousand tonnes, compared to 2,241 thousand tonnes in the previous quarter.
Ø Volumes of ore processed were 2,195 thousand tonnes, compared to 2,040 thousand tonnes in the first quarter of 2018.
Gold output
Doré gold output in the second quarter of 2018 was 102 thousand ounces, up 2% compared to the previous quarter, mainly due to higher processing volumes. Refined gold output amounted to 102 thousand ounces, up 12% on the previous reporting period. Refined gold output decreased 4% compared to the second quarter of 2017 on the back of lower grades in ore processed.
Mining works
Polyus continues to conduct a pit cutback at Blagodatnoye. Volumes of rock moved increased 3% to 19,760 thousand tonnes compared to the previous quarter. Volumes of ore mined declined 36% to 1,445 thousand tonnes, compared to 2,241 thousand tonnes in the first quarter of 2018. Mining works were focused on low-grade flank areas of the deposit, which resulted in a 5% decline in average grade in ore mined, to 1.59 g/t from 1.68 g/t in the first quarter of 2018.
The Company introduced seven new САТ 793D trucks at Blagodatnoye during the second quarter of 2018.
Ore processing
The average grade in ore processed decreased to 1.64 g/t during the reporting period due to lower grades in ore mined. Volumes of ore processed totaled 2,195 thousand tonnes, up 8% compared to the previous quarter, reflecting completion of maintenance works at Mill-4 in the first quarter of 2018 and higher volumes of stockpiled ore processed.
The Company is conducting an expansion project at the Blagodatnoye Mill. Polyus anticipates to achieve a 9.0 million tonnes per annum throughput capacity by the end of 2019.
In the reporting period, the recovery rate stood at 87.3%.
Mining works and ore processing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Total rock moved, kt | 19,760 | 19,265 | 3% | 20,392 | 20,495 | 17,780 | 11% | 39,025 | 34,973 | 12% |
including stripping, kt | 18,315 | 17,024 | 8% | 16,823 | 17,018 | 14,938 | 23% | 35,339 | 29,169 | 21% |
Stripping ratio, t/t | 12.7 | 7.6 | 67% | 4.7 | 4.9 | 5.3 | 140% | 9.6 | 5.0 | 92% |
Ore mined, kt | 1,445 | 2,241 | -36% | 3,569 | 3,477 | 2,842 | -49% | 3,686 | 5,787 | -36% |
Average grade in ore mined, g/t | 1.59 | 1.68 | -5% | 1.90 | 1.90 | 1.95 | -18% | 1.64 | 1.98 | -17% |
Ore processed, kt | 2,195 | 2,040 | 8% | 2,199 | 1,880 | 2,105 | 4% | 4,235 | 4,082 | 4% |
Average grade in ore processed, g/t | 1.64 | 1.74 | -6% | 2.06 | 1.93 | 1.96 | -16% | 1.69 | 1.99 | -15% |
Recovery, % | 87.3% | 87.2% | 0.1ppts | 87.7% | 88.0% | 87.3% | 0.0ppts | 87.2% | 87.8% | -0.6ppts |
Doré gold, koz | 101.7 | 100.0 | 2% | 125.7 | 103.4 | 117.3 | -13% | 201.7 | 228.5 | -12% |
Refined gold output, koz | 102.0 | 91.4 | 12% | 126.7 | 116.0 | 105.8 | -4% | 193.4 | 214.0 | -10% |
Verninskoye
2Q 2018 Highlights
Ø Total gold output totalled 53 thousand ounces.
Ø Recovery rate rose to a record high of 89.5%.
Gold output
Doré gold output was 61 thousand ounces, up 19% on the previous quarter, mainly due to higher volumes of ore processed. Refined gold output amounted to 53 thousand ounces, compared to 59 thousand ounces, reflecting changes in gold in inventory at the refinery. Refined gold output was flat compared to the second quarter of 2017.
Mining works
Volumes of rock moved rose 8% to 5,415 thousand tonnes. The Wenco mining fleet management system, introduced in the previous quarter, along with on-going rolling out of the Mine-to-Mill programme contributed to better equipment productivity and consequently higher rock moved volumes.
Volumes of ore mined declined to 741 thousand tonnes, down 12% from the previous quarter, in line with the mining plan. The Company reduced volumes of ore mined in order to properly manage stockpiled ore. Grades in ore mined stood at 2.61 g/t (2.63 g/t in the first quarter of 2018).
Ore processing
In the reporting period, the average grade in ore processed was 2.63 g/t. Volumes of ore processed amounted to 801 thousand tonnes, up 19% compared to the previous quarter. This growth was attributable to the sequence of maintenance works at Verninskoye (a scheduled maintenance was completed in March 2018).
The Company is currently implementing a stage 3 of capacity expansion project at Verninskoye Mill, with annualized capacity now exceeding 3.0 million tonnes per annum.
The recovery rate reached a new record high of 89.5%, compared to 89.4% in the previous quarter.
Mining works and ore processing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Total rock moved, kt | 5,415 | 5,026 | 8% | 4,504 | 4,629 | 4,698 | 15% | 10,441 | 9,245 | 13% |
including stripping, kt | 4,674 | 4,182 | 12% | 3,522 | 3,783 | 3,594 | 30% | 8,856 | 7,326 | 21% |
Stripping ratio, t/t | 6.3 | 5.0 | 26% | 3.6 | 4.5 | 3.3 | 91% | 5.6 | 3.8 | 47% |
Ore mined, kt | 741 | 845 | -12% | 982 | 846 | 1,104 | -33% | 1,586 | 1,919 | -17% |
Average grade in ore mined, g/t | 2.61 | 2.63 | -1% | 2.06 | 2.36 | 2.16 | 21% | 2.62 | 2.16 | 21% |
Ore processed, kt | 801 | 674 | 19% | 760 | 693 | 745 | 8% | 1,475 | 1,336 | 10% |
Average grade in ore processed, g/t | 2.63 | 2.64 | 0% | 2.57 | 2.61 | 2.62 | 0% | 2.63 | 2.62 | 0% |
Recovery, % | 89.5% | 89.4% | 0.1ppts | 88.8% | 88.7% | 88.6% | 0.9ppts | 89.4% | 88.2% | 1.2ppts |
Doré gold , koz | 60.6 | 51.0 | 19% | 55.8 | 51.5 | 55.5 | 9% | 111.6 | 99.2 | 12% |
Refined gold output, koz | 53.3 | 58.6 | -9% | 45.6 | 53.1 | 53.3 | 0% | 111.9 | 107.0 | 5% |
Alluvials
2Q 2018 Highlights
Ø Start of the washing season.
Ø Gold in slime production amounted to 33 thousand ounces.
Ø Refined gold output totalled 24 thousand ounces.
In the second quarter of 2018, Alluvial deposits produced 33 thousand ounces of gold in slime, down 13% on the second quarter of 2017. This decline was primarily due to lower volumes of sands washed.
Refined gold output totalled 24 thousand ounces, compared to 31 thousand ounces in the second quarter of 2017.
Sands washing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Sands washed, 000 m³ | 1,974 | - | n/a | 1,092 | 4,999 | 2,251 | -12% | 1,974 | 2,251 | -12% |
Average grade, g/m³ | 0.53 | - | n/a | 0.53 | 0.55 | 0.53 | 0% | 0.53 | 0.53 | 0% |
Gold in slime, koz | 33.4 | - | n/a | 18.4 | 88.9 | 38.2 | -13% | 33.4 | 38.2 | -13% |
Refined gold output, koz | 23.7 | - | n/a | 29.8 | 85.0 | 30.9 | -23% | 23.7 | 30.9 | -23% |
Kuranakh
2Q 2018 Highlights
Ø Recommencement of the heap leaching operations.
Ø Refined gold output was 44 thousand ounces, down 5% compared to the previous quarter.
Gold output
Doré gold output in the second quarter of 2018 was 49 thousand ounces. Refined gold output decreased 5% compared to the previous quarter, to 44 thousand ounces. Refined gold production rose 14% compared to the second quarter of 2017 due to higher volumes of ore processed and improved recoveries.
Mining works
In line with the mining plan, volumes of rock moved increased to 8,103 thousand tonnes, up 6% on the previous quarter.
During the same period, volumes of ore mined increased 22% to 1,988 thousand tonnes compared to the previous quarter, as Polyus continued mining activities at the areas with a lower stripping ratio, with average grade declining to 1.07 g/t.
Ore processing
Volumes of ore processed at the mill increased to 1,308 thousand tonnes, up 4% compared to the previous quarter, due to increased hourly throughput. The Company completed the installation of an additional cyclone cluster with an automated pump control system at the 2nd and 3rd stages of the grinding circuit and introduced an automated control system at CIL.
Recovery rate at the Mill rose to 88.9%, compared to 88.3% in the first quarter of 2018. This increase was driven by renovations of the 3rd stage of grinding circuit and control system installation at CIL circuit as well as commissioning of three additional CIL columns.
Stage 3 of the capacity expansion project to 5.8 million tonnes per annum is expected to be completed in 2019.
Heap leaching
Leaching activities were recommenced in May 2018. 338 thousand tonnes were processed at heap leaching facilities in the second quarter of 2018, with average grade of 0.75 g/t. Doré gold output totaled 2.5 thousand ounces.
Mining works and ore processing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Total rock moved, kt | 8,103 | 7,629 | 6% | 7,795 | 8,836 | 8,104 | 0% | 15,732 | 15,320 | 3% |
including stripping, kt | 6,115 | 5,995 | 2% | 6,371 | 7,138 | 6,549 | -7% | 12,110 | 12,465 | -3% |
Stripping ratio, t/t | 3.1 | 3.7 | -16% | 4.5 | 4.2 | 4.2 | -26% | 3.3 | 4.4 | -25% |
Ore mined, kt | 1,988 | 1,635 | 22% | 1,424 | 1,698 | 1,555 | 28% | 3,623 | 2,855 | 27% |
Average grade in ore mined, g/t | 1.07 | 1.14 | -6% | 1.25 | 1.16 | 1.12 | -4% | 1.11 | 1.16 | -4% |
Total ore processed, kt | 1,646 | 1,255 | 31% | 1,176 | 1,234 | 1,177 | 40% | 2,901 | 2,291 | 27% |
Mill | ||||||||||
Ore processed, kt | 1,308 | 1,255 | 4% | 1,176 | 1,180 | 1,177 | 11% | 2,563 | 2,291 | 12% |
Average grade in ore processed, g/t | 1.25 | 1.23 | 2% | 1.32 | 1.32 | 1.27 | -2% | 1.24 | 1.28 | -3% |
Recovery, % | 88.9% | 88.3% | 0.6ppts | 88.6% | 88.5% | 88.3% | 0.6ppts | 88.6% | 88.3% | 0.3ppts |
Doré gold, koz | 46.2 | 44.2 | 5% | 45.4 | 44.3 | 41.5 | 11% | 90.4 | 82.1 | 10% |
Heap-leach | ||||||||||
Ore processed, kt | 338 | - | n.a. | - | 54 | - | n.a. | 338 | - | n.a. |
Average grade in ore processed, g/t | 0.75 | - | n.a. | - | 0.75 | - | n.a. | 0.75 | - | n.a. |
Recovery, % | 72.0% | - | n.a. | - | - | - | n.a. | 72.0% | - | n.a. |
Doré gold, koz | 2.5 | - | n.a. | 0.6 | - | - | n.a. | 2.5 | - | n.a. |
Total doré gold, koz | 48.7 | 44.2 | 10% | 46.0 | 44.3 | 41.5 | 17% | 92.9 | 82.1 | 13% |
Refined gold output, koz | 44.1 | 46.5 | -5% | 48.4 | 43.4 | 38.7 | 14% | 90.6 | 79.7 | 14% |
Natalka
2Q 2018 Highlights
Ø Processing volumes reached 1,893 thousand tonnes.
Ø Recovery stands at 65.5% with grades in ore processed averaging at 1.12 g/t.
Mining works
In the second quarter of 2018, volumes of rock moved totaled 9,828 thousand tonnes, while volumes of ore mined amounted to 1,436 thousand tonnes. Average grades in ore mined were 0.98 g/t, as mining works were concentrated on lower grade zones of the ore body, in line with the mine plan.
During the quarter, Polyus delivered 9 Komatsu E730 trucks to the site, bringing the total number of Komatsu E730 trucks to 17. 14 trucks are already operating, and the remaining 3 trucks are being assembled. The Company plans to purchase additional large-scale mining equipment in the second half of 2018.
Ore processing
In the reporting period, the average grade in ore processed was 1.12 g/t, a 10% increase on the previous quarter, in line with the initial plan. Ore treatment volumes amounted to 1,893 thousand tonnes, posting a 38% increase on the first quarter of 2018. Hourly throughput of the Natalka Mill reached 1,127 t/h in the second quarter of 2018. Natalka currently operates at above 90% of design capacity. Polyus anticipates that the Natalka Mill ramp-up will be completed in the second half of 2018.
In the second quarter of 2018, the Company proceeded with the construction works at the Natalka Mill's auxiliary infrastructure. A pump station has been already commissioned, while preparatory works for construction of a fuel storage facility are currently underway.
Mining works and ore processing
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Total rock moved, kt | 9,828 | 6,674 | 47% | 6,458 | 6,772 | 5,260 | 87% | 16,502 | 8,536 | 93% |
including stripping, kt | 8,392 | 6,011 | 40% | 5,517 | 6,020 | 4,594 | 83% | 14,403 | 7,291 | 98% |
Stripping ratio, t/t | 5.8 | 9.1 | -36% | 5.9 | 8.0 | 6.9 | -16% | 6.7 | 5.9 | 14% |
Ore mined, kt | 1,436 | 663 | 117% | 942 | 752 | 666 | 116% | 2,099 | 1,244 | 69% |
Average grade in ore mined, g/t | 0.98 | 0.93 | 5% | 0.96 | 1.01 | 0.95 | 3% | 0.96 | 0.92 | 4% |
Ore processed, kt | 1,893 | 1,368 | 38% | 536 | 2 | 15 | n.a. | 3,261 | 32 | n.a. |
Average grade in ore processed, g/t | 1.12 | 1.02 | 10% | 0.56 | 0.56 | 1.74 | -36% | 1.08 | 1.36 | -21% |
Recovery, % | 65.5% | 62.9% | 2.6ppts | 37.9% | 37.0% | 74.8% | -9.3ppts | 64.5% | 75.4% | -10.9ppts |
Doré gold, koz | 42.6 | 25.5 | 67% | 1.7 | 0.3 | 0.7 | n.a. | 68.1 | 1.2 | n.a. |
Refined gold output, koz | 39.8 | 22.5 | 77% | 3.3 | - | - | n.a. | 62.3 | - | n.a. |
Sukhoi Log
2Q 2018 Highlights
Ø Scoping Study completed.
Ø Polyus is entering the Pre-feasibility stage, which is expected to be completed in 2020.
Ø
Scoping Study highlights
The Scoping Study was carried out by Hatch and Polyus engineering team, while SRK performed quality assurance and quality control. The Study outlined key areas for further geological, engineering and infrastructure development.
Key economic parameters for the Sukhoi Log project (as indicated by the Scoping Study):
· Throughput capacity: 30 million tonnes per annum
· Average waste-to-ore ratio: 2.2 t/t
· Resource (Inferred): 58 million ounces at 2.0 g/t
· Average annual production: approximately 1.6 million ounces
· Recovery rate: 88 - 90%
· TCC: $420-470 per ounce
· Project construction capex: $2.0-2.5 billion
· Capital intensity: $1.2-$1.6 per ounce per annum
The next update on the economic parameters of the project will be provided upon completion of the Pre-feasibility Study (2020).
Detailed information on the key Scoping Study findings can be found at the below link:
http://polyus.com/upload/iblock/34b/2018_sl-presentation_final_eng.pdf
Current status
The Company is currently finalizing the assaying and intepretation of verification drilling results. Polyus has already started the in-fill drilling campaign, which will be followed by deep-level and flank drilling. The Company expects to have the Measured and Indicated Mineral Resources estimate in the fourth quarter of 2018, and the Proven and Probable Mineral Reserves - in 2020.
Financial update
Gold sales
In the second quarter of 2018, the Company sold a total of 531 thousand ounces of gold, a 16% increase on the previous quarter. Total gold sales include 31 thousand ounces of gold contained in the concentrate from Olimpiada.
Estimated gold sales in the reporting period increased to approximately $683 million, compared to $608 million in the previous quarter and $617 million in the second quarter of 2017.
Debt management
In the second quarter of 2018, Polyus attracted a bilateral bank credit facility with ING in the total amount of $70 million at a fixed interest rate in order to finance its ongoing operations.
As of the end of the second quarter of 2018, the Company's gross debt decreased to $4,116 million, compared to $4,174 million as of the end of the first quarter. Polyus' debt portfolio is predominantly comprised of US dollar denominated instruments in regards to currency allocation. The Company's debt maturity profile remains smooth with limited debt maturities outstanding until the end of 2018.
As at 30 June 2018, the Company's estimated cash position was $908 million (31 March 2018: $1,095 million) and its estimated net debt position amounted to $3,208 million (31 March 2018: $3,079 million).
Debt capital markets activities
In April 2018, due to significant market dislocation, the Company announced an invitation to holders of its $250 million 1% guaranteed convertible bonds due 2021 to tender up to $50 million (or 20% of the issue) in aggregate principal amount of the Bonds for purchase. The final buyback price was 86.7% and the Company has decided to accept Bonds submitted pursuant to valid Tender Instructions in an aggregate nominal amount of $50 million. J.P. Morgan Securities plc acted as Dealer Manager in respect of the buyback. Following the transaction, the total nominal amount of the outstanding convertible bonds stands at $200 million.
Dividends
Dividends for the second half of 2017, approved at the AGM meeting on 31 May 2018, were paid in June 2018 in the amount of $311 million. The total dividend payout for the full year of 2017 corresponds to $550 million, in line with Polyus existing dividend policy suggesting dividend payout to be the higher of 30% of adjusted EBITDA or $550 million for the full year 2017 and 2018. This amount includes $239 million paid out in form of dividends for the first half of 2017 in October 2017.
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
Debt maturities [ii], $ mln | 6 | 546 | 770 | 459 | 632 | 1,246 | 500 |
Eurobonds | Bank loans | Convertibles | Local rouble bonds |
61% | 28% | 5% | 6% |
2Q'18 | 1Q'18 | Q-o-Q | 4Q'17 | 3Q'17 | 2Q'17 | Y-o-Y | 1H'18 | 1H'17 | Y-o-Y | |
Refined gold sold, koz | 499 | 447 | 12% | 515 | 561 | 455 | 10% | 946 | 912 | 7% |
Gold containedin concentrate, koz | 31 | 13 | 138% | 82 | 16 | 42 | -24% | 44 | 71 | -38% |
Gold payablein concentrate, koz | 25 | 9 | 178% | 58 | 12 | 29 | -14% | 34 | 49 | -31% |
Total gold sales, koz | 531 | 459 | 16% | 597 | 578 | 496 | 7% | 990 | 983 | 1% |
Gold sales(incl. an SPPP effect), $ mln | 683 | 608 | 12% | 734 | 733 | 617 | 11% | 1,291 | 1,217 | 6% |
Weighted-average refined gold selling price (excl. SPPP), $/oz | 1,300 | 1,336 | -3% | 1,275 | 1,279 | 1,261 | 3% | 1,317 | 1,239 | 6% |
Weighted-average refined gold selling price (incl. SPPP), $/oz | 1,300 | 1,336 | -3% | 1,275 | 1,279 | 1,268 | 3% | 1,317 | 1,263 | 4% |
SPPP effect, $ mln | 0 | 0 | 0% | 0 | 0 | 3 | n.a. | 0 | 22 | n.a. |
Average LBMA price, $/oz | 1,306 | 1,329 | -2% | 1,275 | 1,278 | 1,257 | 4% | 1,318 | 1,238 | 6% |
Net debt, $ mln | 3,208 | 3,079 | 4% | 3,077 | 3,151 | 3,084 | 4% | 3,208 | 3,084 | 4% |
Conference call
Polyus will host an analyst conference call on 24th July 2018 at 1 pm London time (3 pm Moscow time) to present and discuss the second quarter operating results.
To join the conference call, please dial:
Conference ID: 7133159
UK
+44 (0)330 336 9411 (Local access)
0800 279 7204 (Toll free)
USA
+1 323-994-2082 (Local access)
888-204-4368 (Toll free)
Russia
+7 495 646 9190 (Local access)
8 10 8002 8675011 (Toll free)
To access the replay, please dial:
Passcode: 7133159
UK
+44 (0) 207 660 0134 (Local access)
0 808 101 1153 (Toll free)
USA
+1 719-457-0820 (Local access)
888-203-1112 (Toll free)
Russia
810 800 2702 1012 (Toll free)
Enquiries:
Investor contact
Victor Drozdov, Investor Relations Director
+7 495 641 33 77
drozdovvi@polyus.com
Media contact
Victoria Vasilyeva, Director Public Relations
+7 (495) 641 33 77
vasilevavs@polyus.com
Forward looking statements
This announcement may contain "forward-looking statements" concerning Polyus and/or Polyus Group. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus' and/or Polyus Group's operations. Many of these risks and uncertainties relate to factors that are beyond Polyus' and/or Polyus Group's ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as of the date of this announcement. Polyus and/or any Polyus Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.
[i] LTIFR is calculated based on a 200,000 work hours factor.
[ii] Net of non-cash IFRS adjustments