22 Oct 2020 07:03
Press Release 22 October 2020
PJSC Polyus
Trading update for the third quarter of 2020
3Q 2020 Highlights
· Total gold output increased 12% to 771 thousand ounces compared to the previous quarter. Year on year, volumes of doré gold remained flat, while total gold output grew by 2% respectively.
· Volumes of ore mined amounted to 18,264 thousand tonnes, a 5% increase on the previous quarter. On a year on year basis, volumes of ore mined rose by 5%, driven by intensified mining activities at Natalka, Verninskoye and Kuranakh.
· Volumes of ore processed totalled 12,224 thousand tonnes, up 4% on the previous quarter. Year on year, volumes of ore processed rose by 8%, primarily due to higher processing volumes at Olimpiada and Blagodatnoye.
· Recovery rate increased to 84.1%, compared to 83.4% in the previous quarter.
· Estimated gold sales amounted to $1,444 million, up 26% compared to the previous quarter, with an estimated weighted-average gold selling price of $1,907/oz, an 11% increase on the second quarter of 2020.
· As at 30 September 2020, the estimated net debt stood at $2,299 million, compared to $2,506 million as at the end of the previous quarter.
9M 2020 Highlights
· Total gold output and volumes of doré gold amounted to 2,056 thousand ounces and 2,143 thousand ounces, respectively, remaining almost flat compared to the prior-year period.
· Volumes of ore processed increased 7% to 34,675 thousand tonnes, reflecting the performance of the Natalka Mill and the implementation of throughput capacity expansion projects across core assets.
· Recovery rate rose to 83.7%, up 1.8 ppts from the prior-year period, primarily driven by an increase in recoveries at Olimpiada.
· Estimated gold sales increased 28% year-on-year to $3,453 million, with an estimated weighted-average gold selling price of $1,755/oz (9M 2019: $1,372/oz).
Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:
Polyus produced 771 thousand ounces of gold during the reporting period, delivering 12% growth in gold production compared to the previous quarter. We continue to implement efficiency improvement initiatives across the company's assets, and have already achieved a visible growth in recovery rates at Olimpiada and Natalka.
We are also progressing well with the development of our flagship greenfield project, Sukhoi Log. We have today published a Maiden Ore Reserve estimate, of 40 million ounces at a grade of 2.3 g/t, confirming Sukhoi Log as the largest gold deposit globally, both among greenfields and operating gold mines.
Looking ahead to the full year, with almost 2.1 million ounces produced in the first nine months of 2020, we are on track to meet our production target for the year, which remains intact and stands at approximately 2.8 million ounces.
ESG update: 3Q 2020
Highlights
· Coronavirus: Production assets remained unaffected and operated without interruption during 3Q 2020. Thorough COVID-19 protocols remain in place ahead of a possible second wave of the pandemic
· 9M 2020 LTIFR[1] at 0.08 (1H 2020 - 0.06 and 9M 2019 - 0.07)
· No environmental incidents during 3Q 2020
· One fatality during 3Q and 9M 2020
Coronavirus update
· In-depth COVID-19 reaction protocols have been developed and implemented across all assets.
· As Russia is entering a second wave of COVID-19, all Polyus' preventive measures remain in place, including enhanced medical screening, physical distancing, procuring personal protective equipment and regular disinfection of communal areas.
· Shift employees are tested for COVID-19 and quarantined in observation facilities prior to transfer to Polyus' sites.
Global Industry Standard on Tailings Management
· Polyus was closely involved in the development of the Global Industry Standard on Tailings Management, presented in August by ICMM, UN Environment Program and PRI.
· Along with representatives from other organisations, specialists from Polyus joined working groups and provided technical input and recommendations based on the Company's experience.
· Polyus' CEO Pavel Grachev joined a designated CEO working group to discuss the draft Standard, providing strategic feedback on its exact requirements, and insight on its implementation methods and requirements across varying jurisdictions.
Climate Strategy development
· Development of Polyus' Climate Strategy, initiated in late 2019, is progressing according to schedule.
· Polyus has successfully completed two stages out of the four-stage process, including:
o Mapping climate risks (identification of the climate risks relevant to Polyus and a preliminary qualitative risk assessment); and
o Scenario analysis and capacity building for a pilot Business Unit (Kuranakh), including the development and description of climate scenarios relevant to the site.
· Current stage: Quantitative risk assessment for the pilot Business Unit, including development of risk management tools and financial assessment of climate-related risks.
Health & Safety
· HSE Risk Management System Development: new major project initiated, involving all production and service units of Polyus and designed to decrease injury rate. It will include the following stages: diagnostics, process modelling, and implementation of innovations. During 3Q, on-site diagnostic audits were conducted at Verninskoye, Kuranakh, Alluvials as well as the Energy service.
· Sleep prevention project pilot was successfully completed at Natalka; equipment installation to start at Olimpiada, Blagodatnoye and the Logistics service.
· Action plan to prevent road traffic incidents in autumn and wintertime was prepared and implemented.
Environment
· Polyus has started the preparation of its first Water Report that will contain detailed information on the Company's water management and usage of water resources.
· Biodiversity background studies were conducted on behalf of Polyus in Severo-Yeniseysky District, close to Olimpiada and Blagodatnoye.
ESG Ratings:
· MSCI ESG - A (up from BBB in 2019)
· SAM - 45 (update planned for second half of 2020)
· Sustainalytics ESG Risk Rating - 29.4 (improvement by 3 points vs 2019)
· CDP - Water Security: D; Climate Change: D (update planned for late 2020)
Consolidated operating results
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Olimpiada | 254.8 | 264.0 | -3% | 215.0 | 300.8 | 239.9 | 6% | 733.8 | 770.9 | -5% |
Blagodatnoye | 118.3 | 116.3 | 2% | 103.4 | 126.2 | 96.5 | 23% | 338.0 | 294.6 | 15% |
Verninskoye | 68.6 | 68.3 | 0% | 69.1 | 63.9 | 63.3 | 8% | 206.0 | 192.0 | 7% |
Alluvials | 75.5 | 29.8 | n/a | - | 34.6 | 81.4 | -7% | 105.3 | 111.0 | -5% |
Kuranakh | 66.5 | 57.5 | 16% | 50.5 | 62.9 | 68.2 | -2% | 174.5 | 161.8 | 8% |
Natalka | 117.4 | 110.4 | 6% | 95.0 | 132.3 | 100.4 | 17% | 322.8 | 272.7 | 18% |
Refined gold, koz | 701.1 | 646.3 | 8% | 533.0 | 720.7 | 649.7 | 8% | 1,880.4 | 1,803.0 | 4% |
Flotation concentrate production, t | 23,219 | 30,023 | -23% | 26,185 | 33,756 | 38,732 | -40% | 79,427 | 87,606 | -9% |
Antimony in flotation concentrate, t | 3,950 | 2,432 | 62% | 2,739 | 4,936 | 4,978 | -21% | 9,121 | 9,837 | -7% |
Gold in flotation concentrate, koz | 70.0 | 44.1 | 59% | 61.9 | 83.3 | 103 | -32% | 176.0 | 234.2 | -25% |
Gold payable in concentrate, koz | 55.5 | 32.4 | 71% | 48.5 | 61.8 | 76.4 | -27% | 136.4 | 173.7 | -21% |
Total gold output, koz | 771.1 | 690.4 | 12% | 594.9 | 804.0 | 752.7 | 2% | 2,056.4 | 2,037.2 | 1% |
Rock moved, kt | 82,535 | 73,836 | 12% | 83,352 | 83,591 | 86,868 | -5% | 239,723 | 245,272 | -2% |
Stripping ratio, t/t | 3.5 | 3.3 | 6% | 3.6 | 3.4 | 4 | -13% | 3.5 | 4.2 | -17% |
Ore mined, kt | 18,264 | 17,364 | 5% | 18,226 | 19,011 | 17,477 | 5% | 53,854 | 47,084 | 14% |
Ore processed, kt | 12,224 | 11,753 | 4% | 10,698 | 11,527 | 11,366 | 8% | 34,675 | 32,551 | 7% |
Recovery rate, % | 84.1% | 83.4% | 0.7ppts | 83.6% | 83.2% | 82.1% | 2.0ppts | 83.7% | 81.9% | 1.8ppts |
Total doré & slime gold output, koz | 770.2 | 712.4 | 8% | 660.2 | 714.3 | 770.2 | 0% | 2,142.8 | 2,132.3 | 0% |
3Q 2020 Highlights
· Total gold output increased 12% to 771 thousand ounces, compared to 690 thousand ounces in the previous quarter. This growth was mainly driven by seasonally higher production volumes at Alluvials as well as increased production volumes across all hard-rock deposits.
· Volumes of ore mined amounted to 18,264 thousand tonnes, up 5% on the previous quarter, driven by higher ore volumes mined at Natalka, Kuranakh, Verninskoye and Blagodatnoye.
· Volumes of ore processed increased 4% quarter-on-quarter to 12,224 thousand tonnes, mainly due to the seasonal ramp up of heap leaching operations at Kuranakh and higher processing volumes at Olimpiada.
· Recovery rate amounted to 84.1%, up 0.7ppts on the previous quarter, driven by an increase in recoveries at Olimpaida and Natalka.
· Flotation concentrate output decreased to 23 thousand tonnes, down 23% on the previous quarter.
· Volumes of antimony in flotation concentrate increased to 3,950 tonnes, up from 2,432 tonnes in the previous quarter.
· Volumes of gold in flotation concentrate increased 59% quarter-on-quarter to 70.0 thousand ounces.
9M 2020 Highlights
· Total gold output was 2,056 thousand ounces, compared to 2,037 thousand ounces produced in the same period of 2019. Doré volumes totalled 2,143 thousand ounces, remaining flat year-on-year.
· Volumes of ore processed increased 7% to 34,675 thousand tonnes, reflecting the improved performance of the Natalka Mill and the progress with the implementation of throughput capacity expansion projects across core assets.
· Recovery rate rose to 83.7%, up 1.8 ppts from the prior-year period, primarily driven by an increase in recoveries at Olimpiada.
Olimpiada
3Q 2020 Highlights
Ø Volumes of rock moved totalled 30,236 thousand tonnes, up 21% on the previous quarter.
Ø Recovery rate rose to 86.1%, up from 85.4% in the previous quarter.
Ø Total gold output amounted to 325 thousand ounces.
Gold output
Doré gold output stood at 319 thousand ounces in the third quarter of 2020, up 5% compared to the previous quarter, driven mainly by higher average grade in ore processed and higher processing volumes. Total gold output (refined and concentrate) rose by 5% compared to the previous quarter, to 325 thousand ounces, reflecting both increase in gold in flotation concentrate and changes in gold in inventory at the refinery. On a year on year basis, doré gold output declined by 10%, while total gold production was down 5%.
Mining works
Rock moved volumes totalled 30,236 thousand tonnes, up 21% on the second quarter of 2020. In the second quarter, the Company made a decision to temporary downscale stripping activities due to lower workforce availability during the spread of coronavirus at Olimpiada. The coronavirus outbreak at Olimpiada was successfully contained by the end of the second quarter of 2020. Under the mine plan, Polyus decreased volumes of ore mined to 4,153 thousand tonnes, down 2% from the previous quarter. Polyus temporarily intensified mining activities at lower-grade zones of the Vostochny pit, which resulted in a 6% decrease in average grades to 3.30 g/t, from 3.52 g/t in the previous quarter.
Ore processing
Volumes of ore processed totalled 3,757 thousand tonnes, up 6% compared to the previous quarter. This increase reflects the sequence of maintenance works at Olimpiada, with Mill No. 1 and Mill No. 2 undergoing scheduled maintenance in the previous quarter.
Average grades in ore processed rose by 2% to 3.56 g/t, compared to 3.47 g/t in the previous quarter, reflecting an increased share of higher grade antimony-rich ore in total ore mined. The recovery rate rose further to 86.1%, up 0.7 ppts compared to the second quarter of 2020. This increase is mainly attributable to a decline in losses at flotation and CIL tailings, following the optimisation of the feed composition and the higher average grades in ore processed. During the third quarter of 2020, Polyus delivered a new SAG-mill at Mill-3. The Company expects to replace the existing SAG-mill at Mill-3 in the fourth quarter of 2020. Over the course of the third quarter, Polyus continued the refurbishment of BIO tanks at BIO-3 and conducted the retrofitting of two BIO tanks at BIO-2 into agitation tanks. These initiatives improved the efficiency of BIO complex operations and led to an increase in annualised flotation concentrate processing capacity.
Flotation concentrate production
On a quarter-on-quarter basis, production of flotation concentrate decreased by 23% to approximately 23 thousand tonnes. At the same time, production of antimony-rich flotation concentrate with higher gold content increased by 45% compared to the previous quarter. As a result, volumes of gold contained in flotation concentrate increased by 59% to 70 thousand ounces.
Mining works and ore processing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Rock moved, kt | 30,236 | 25,021 | 21% | 33,621 | 34,388 | 35,508 | -15% | 88,878 | 101,101 | -12% |
incl. stripping, kt | 26,083 | 20,796 | 25% | 29,485 | 29,554 | 30,465 | -14% | 76,364 | 85,222 | -10% |
Stripping ratio, t/t | 6.3 | 4.9 | 29% | 7.1 | 6.1 | 6.0 | 5% | 6.1 | 5.4 | 13% |
Ore mined, kt | 4,153 | 4,225 | -2% | 4,136 | 4,834 | 5,043 | -18% | 12,514 | 15,879 | -21% |
Average grade in ore mined, g/t | 3.30 | 3.52 | -6% | 2.93 | 3.30 | 3.52 | -6% | 3.25 | 3.45 | -6% |
Ore processed, kt | 3,757 | 3,539 | 6% | 3,503 | 3,645 | 3,416 | 10% | 10,799 | 10,263 | 5% |
Average grade in ore processed, g/t | 3.56 | 3.47 | 2% | 3.20 | 3.88 | 4.01 | -11% | 3.42 | 3.93 | -13% |
Recovery, % | 86.1% | 85.4% | 0.7ppts | 84.8% | 84.0% | 82.5% | 3.6ppts | 85.5% | 81.8% | 3.7ppts |
Doré gold, koz | 319.2 | 305.0 | 5% | 323.7 | 338.4 | 356.1 | -10% | 947.9 | 1,047.4 | -9% |
Refined gold output, koz | 254.8 | 264.0 | -3% | 215.0 | 300.8 | 239.9 | 6% | 733.8 | 770.9 | -5% |
Flotation concentrate production, t | 23,219 | 30,023 | -23% | 26,185 | 33,756 | 38,732 | -40% | 79,427 | 87,606 | -9% |
Antimony in flotation concentrate, t | 3,950 | 2,432 | 62% | 2,739 | 4,936 | 4,978 | -21% | 9,121 | 9,837 | -7% |
Gold contained in concentrate, koz | 70.0 | 44.1 | 59% | 61.9 | 83.3 | 103.0 | -32% | 176.0 | 234.2 | -25% |
Total gold output, koz | 324.8 | 308.1 | 5% | 276.9 | 384.1 | 342.9 | -5% | 909.8 | 1,005.1 | -9% |
Blagodatnoye
3Q 2020 Highlights
Ø Volumes of ore processed totalled 2,336 thousand tonnes.
Ø Refined gold output totalled 118 thousand ounces.
Gold output
Doré gold output in the third quarter of 2020 amounted to 119 thousand ounces, up 3% compared to the previous quarter. Refined gold output amounted to 118 thousand ounces, compared to 116 thousand ounces in the previous reporting period. On a year on year basis, refined gold output increased 23%.
Mining works
Volumes of rock moved increased 4% to 16,468 thousand tonnes compared to the previous quarter.
In line with the sequence of mining works, volumes of ore mined increased 4% to 3,731 thousand tonnes, compared to 3,590 thousand tonnes in the second quarter of 2020, while the average grade in ore mined remained almost flat at 1.31 g/t.
Ore processing
The average grade in ore processed amounted to 1.80 g/t during the reporting period, remaining flat quarter-on-quarter.
Volumes of ore processed amounted to 2,336 thousand tonnes, up 4% on the previous quarter, reflecting the completion of scheduled maintenance works at Mill No. 4 in April 2020. Recovery rate temporarily declined to 87.9%, compared to 88.5% in the second quarter of 2020, with lower oxygen concentration in CIL agitation tanks due to seasonally high ambient temperature in July.
Polyus is proceeding with the Feasibility Study for the construction of a new mill (Mill-5). The Feasibility Study is expected to be completed in the fourth quarter of 2020.
Mining works and ore processing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Total rock moved, kt | 16,468 | 15,884 | 4% | 16,678 | 16,727 | 17,691 | -7% | 49,030 | 51,075 | -4% |
including stripping, kt | 12,737 | 12,294 | 4% | 11,692 | 11,284 | 13,299 | -4% | 36,723 | 41,888 | -12% |
Stripping ratio, t/t | 3.4 | 3.4 | 0% | 2.3 | 2.1 | 3 | 13% | 3.0 | 4.6 | -35% |
Ore mined, kt | 3,731 | 3,590 | 4% | 4,986 | 5,443 | 4,392 | -15% | 12,307 | 9,187 | 34% |
Average grade in ore mined, g/t | 1.31 | 1.32 | -1% | 1.23 | 1.11 | 1.17 | 12% | 1.28 | 1.23 | 4% |
Ore processed, kt | 2,336 | 2,254 | 4% | 2,188 | 2,340 | 2,061 | 13% | 6,778 | 6,665 | 2% |
Average grade in ore processed, g/t | 1.80 | 1.80 | 0% | 1.76 | 1.77 | 1.72 | 5% | 1.79 | 1.63 | 10% |
Recovery, % | 87.9% | 88.5% | -0.6ppts | 88.7% | 88.5% | 87.7% | 0.2ppts | 88.4% | 87.6% | 0.8ppts |
Doré gold, koz | 118.9 | 115.8 | 3% | 113.0 | 114.5 | 101.1 | 18% | 347.7 | 306.7 | 13% |
Refined gold output, koz | 118.3 | 116.3 | 2% | 103.4 | 126.2 | 96.5 | 23% | 338.0 | 294.6 | 15% |
Natalka
3Q 2020 Highlights
Ø Volumes of ore processed amounted to 2,928 thousand tonnes.
Ø Recovery rate reached 73.2%.
Ø Refined gold output stood at 117 thousand ounces.
Gold output
Doré gold output in the third quarter of 2020 amounted to 121 thousand ounces, up 3% compared to the previous quarter. Refined gold output amounted to 117 thousand ounces, compared to 110 thousand ounces in the previous reporting period. On a year onе year basis, refined gold output increased 17%.
Mining works
In the third quarter of 2020, volumes of rock moved totalled 19,906 thousand tonnes, while volumes of ore mined rose to 6,247 thousand tonnes, a 7% increase from the second quarter of 2020. The average grades in ore mined amounted to 1.24 g/t (1.26 g/t in the second quarter of 2020).
Ore processing
Average grade in ore processed stood at 1.78 g/t, compared to 1.76 g/t in the second quarter of 2020.
The recovery rate rose to 73.2%, up 2.7 ppts compared to the second quarter of 2020. The Company proceeds with the implementation of operational initiatives targeting recovery improvement in the second half of 2020. During the reporting period, the Company installed the second flash flotation unit and completed the introduction of three CIL columns (out of eight) and currently calibrates the optimal processing parameters. The Company targets the full scale commissioning of flash flotation circuit at the Natalka Mill in the fourth quarter of 2020.
Mining works and ore processing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Total rock moved, kt | 19,906 | 17,929 | 11% | 17,861 | 19,218 | 18,904 | 5% | 55,696 | 51,056 | 9% |
including stripping, kt | 13,660 | 12,105 | 13% | 12,012 | 13,450 | 14,370 | -5% | 37,777 | 38,371 | -2% |
Stripping ratio, t/t | 2.2 | 2.1 | 5% | 2.1 | 2.3 | 3.2 | -31% | 2.1 | 3.0 | -30% |
Ore mined, kt | 6,247 | 5,823 | 7% | 5,849 | 5,768 | 4,534 | 38% | 17,919 | 12,685 | 41% |
Average grade in ore mined, g/t | 1.24 | 1.26 | -2% | 1.31 | 1.17 | 1.13 | 10% | 1.27 | 1.1 | 15% |
Ore processed, kt | 2,928 | 2,935 | 0% | 2,762 | 3,241 | 2,852 | 3% | 8,625 | 8,007 | 8% |
Average grade in ore processed, g/t | 1.78 | 1.76 | 1% | 1.59 | 1.61 | 1.51 | 18% | 1.71 | 1.61 | 6% |
Recovery, % | 73.2% | 70.5% | 2.7ppts | 70.7% | 72.3% | 71.6% | 1.6ppts | 71.5% | 71.60% | -0.1ppts |
Doré gold, koz | 120.5 | 117.4 | 3% | 106.2 | 117.2 | 99.8 | 21% | 344.1 | 297.2 | 16% |
Refined gold output, koz | 117.4 | 110.4 | 6% | 95.0 | 132.3 | 100.4 | 17% | 322.8 | 272.7 | 18% |
Verninskoye
3Q 2020 Highlights
Ø Average grade in ore mined stood at 2.28 g/t, compared to 2.11 g/t in the second quarter of 2020.
Ø Refined gold production totalled 69 thousand ounces, remaining flat on the previous quarter.
Gold output
Doré gold output stood at 65 thousand ounces, down 9% quarter-on-quarter, reflecting lower volumes of ore processed. Refined gold output amounted to 69 thousand ounces, remaining flat quarter-on-quarter. Year-on-year, doré gold output and refined gold output grew by 7% and 8%, respectively.
Mining works
Volumes of rock moved increased 7% to 8,035 thousand tonnes. The commissioning of three HD-1500 dump trucks contributed to higher volumes of rock moved during the reporting period.
Volumes of ore mined rose to 1,617 thousand tonnes, up 12% from 1,439 thousand tonnes in the previous quarter, while average grades rose to 2.28 g/t (2.11 g/t in the second quarter of 2020), in line with the mining plan.
Ore processing
In the third quarter of 2020, the Verninskoye Mill underwent scheduled maintenance works, which were completed in September 2020. Volumes of ore processed declined 11% on the previous quarter, to 765 thousand tonnes.
Polyus proceeds with the further expansion of throughput capacity at the Verninskoye Mill to 3.5 million tonnes per annum. The Company continued construction works at the extension to the main building, where an additional grinding circuit will be installed.
Mining works and ore processing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Total rock moved, kt | 8,035 | 7,497 | 7% | 7,517 | 5,879 | 6,682 | 20% | 23,049 | 18,594 | 24% |
including stripping, kt | 6,418 | 6,058 | 6% | 5,990 | 4,605 | 5,426 | 18% | 18,466 | 15,420 | 20% |
Stripping ratio, t/t | 4.0 | 4.2 | -5% | 3.9 | 3.6 | 4.3 | -7% | 4.0 | 4.9 | -18% |
Ore mined, kt | 1,617 | 1,439 | 12% | 1,527 | 1,274 | 1,256 | 29% | 4,583 | 3,174 | 44% |
Average grade in ore mined, g/t | 2.28 | 2.11 | 8% | 1.99 | 2.32 | 2.30 | -1% | 2.14 | 2.62 | -18% |
Ore processed, kt | 765 | 858 | -11% | 778 | 796 | 724 | 6% | 2,401 | 2,239 | 7% |
Average grade in ore processed, g/t | 2.92 | 2.90 | 1% | 2.90 | 2.90 | 2.90 | 1% | 2.91 | 2.90 | 0% |
Recovery, % | 89.6% | 89.6% | 0.0ppts | 89.6% | 89.6% | 89.5% | 0.1ppts | 89.6% | 89.5% | 0.1ppts |
Doré gold , koz | 64.9 | 71.7 | -9% | 65.0 | 66.7 | 60.7 | 7% | 201.6 | 187.3 | 8% |
Refined gold output, koz | 68.6 | 68.3 | 0% | 69.1 | 63.9 | 63.3 | 8% | 206.0 | 192.0 | 7% |
Kuranakh
3Q 2020 Highlights
Ø Volumes of ore processed totalled 2,438 thousand tonnes, up 13% on the previous quarter.
Ø Refined gold output increased to 67 thousand ounces.
Gold output
Doré gold output in the third quarter of 2020 amounted to 70 thousand ounces, a 17% increase compared to the second quarter of 2020, mainly driven by higher volumes of ore processed at heap leaching facilities. On a year on year basis, doré gold output increased 3%. Refined gold output amounted to 67 thousand ounces, up 16% on the previous quarter.
Mining works
Volumes of rock moved amounted to 7,890 thousand tonnes, up 5% on the previous quarter. Under the mine plan, Polyus increased volumes of ore mined to 2,517 thousand tonnes, up 10% on the previous quarter. Grade in ore mined was 1.01 g/t, compared to 1.04 g/t in the second quarter of 2020.
Ore processing
Volumes of ore processed at the Kuranakh Mill amounted to 1,528 thousand tonnes, up 2% on the previous quarter.
The Kuranakh Mill throughput capacity reached 6.0 million tonnes on an annulised basis in the third quarter of 2020.
Heap leaching
The third quarter is the peak production season for the heap leaching operations due to its seasonality. 910 thousand tonnes were processed at heap leaching facilities in the third quarter of 2020, with an average grade of 0.70 g/t. Doré gold output amounted to 14.9 thousand ounces.
Mining works and ore processing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y | |||||||
Total rock moved, kt | 7,890 | 7,505 | 5% | 7,675 | 7,373 | 8,083 | -2% | 23,070 | 23,440 | -2% | |||||||
including stripping, kt | 5,373 | 5,219 | 3% | 5,947 | 5,682 | 5,831 | -8% | 16,539 | 17,282 | -4% | |||||||
Stripping ratio, t/t | 2.1 | 2.3 | -9% | 3.4 | 3.4 | 2.6 | -19% | 2.5 | 2.8 | -11% | |||||||
Ore mined, kt | 2,517 | 2,286 | 10% | 1,728 | 1,691 | 2,252 | 12% | 6,531 | 6,158 | 6% | |||||||
Average grade in ore mined, g/t | 1.01 | 1.04 | -3% | 1.17 | 1.21 | 1.03 | -2% | 1.06 | 1.06 | 0% | |||||||
Total ore processed, kt | 2,438 | 2,167 | 13% | 1,467 | 1,505 | 2,313 | 5% | 6,072 | 5,377 | 13% | |||||||
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Ore processed, kt | 1,528 | 1,497 | 2% | 1,467 | 1,457 | 1,469 | 4% | 4,492 | 4,177 | 8% | |||||||
Average grade in ore processed, g/t | 1.24 | 1.25 | -1% | 1.25 | 1.25 | 1.21 | 2% | 1.25 | 1.22 | 2% | |||||||
Recovery, % | 89.0% | 89.1% | -0.1ppts | 89.0% | 89.0% | 88.8% | 0.2ppts | 89.0% | 88.8% | 0.2ppts | |||||||
Doré gold, koz | 54.8 | 54.0 | 1% | 52.3 | 52.0 | 50.3 | 9% | 161.1 | 145.7 | 11% | |||||||
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Ore processed, kt | 910 | 670 | 36% | - | 48 | 844 | 8% | 1,580 | 1,200 | 32% | |||||||
Average grade in ore processed, g/t | 0.70 | 0.72 | -3% | - | 0.77 | 0.78 | -10% | 0.71 | 0.76 | -7% | |||||||
Recovery, % | 72.3% | 72.3% | 0.0ppts | - | 72.3% | 72.3% | 0.0ppts | 72.3% | 72.3% | 0.0ppts | |||||||
Doré gold, koz | 14.9 | 5.8 | n/a | - | 4.4 | 17.4 | -14% | 20.7 | 23.5 | -12% | |||||||
Total doré gold, koz | 69.7 | 59.8 | 17% | 52.3 | 56.4 | 67.7 | 3% | 181.8 | 169.2 | 7% | |||||||
Refined gold output, koz | 66.5 | 57.5 | 16% | 50.5 | 62.9 | 68.2 | -2% | 174.5 | 161.8 | 8% | |||||||
Alluvials
3Q 2020 Highlights
Ø Gold in slime production amounted to 77 thousand ounces.
Ø Refined gold output totalled 76 thousand ounces.
In the third quarter of 2020, alluvial deposits produced 77 thousand ounces of gold in slime, up 81% on the second quarter of 2020.
Refined gold output totalled 76 thousand ounces, compared to 30 thousand ounces in the previous quarter.
Sands washing
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Sands washed, 000 m³ | 5,142 | 2,888 | 78% | - | 1,207 | 5,115 | 1% | 8,030 | 7,374 | 9% |
Average grade, g/m³ | 0.47 | 0.46 | 2% | - | 0.54 | 0.52 | -10% | 0.46 | 0.53 | -13% |
Gold in slime, koz | 77.0 | 42.7 | 81% | - | 21.1 | 84.9 | -9% | 119.7 | 124.5 | -4% |
Refined gold output, koz | 75.5 | 29.8 | n/a | - | 34.6 | 81.4 | -7% | 105.3 | 111.0 | -5% |
Sukhoi Log
3Q 2020 Highlights
Ø Polyus reports a maiden Ore Reserve estimate for Sukhoi Log and provides an update on its Mineral Resource estimate.
Ø The Pre-Feasibility Study is currently in a finalisation stage.
Ø Polyus consolidated 100% of SL Gold, Sukhoi Log deposit JV.
JORC Resources and Reserves
The maiden Ore Reserve estimate stands at 540 million tonnes with an average grade of 2.3 g/t Au and containing 40 million ounces of gold as at 31 May 2020. This estimate ranks Sukhoi Log as the largest gold deposit both among greenfield assets and operating gold mines. This 2020 Sukhoi Log Ore Reserve estimate is based on the 2019 Mineral Resource model as well as a number of studies and additional mine planning activities undertaken by AMC.
The estimated Mineral Resources for Sukhoi Log stand at 1,110 million tonnes, with an average grade of 1.9 g/t Au and containing 67 million ounces of gold as at 31 May 2020. Exploration and verification drilling throughout 2019 enabled an increase of the estimated Indicated Mineral Resource by 18 million ounces to 46 million ounces of gold.
Pre-Feasibility Study
During the reporting period, the Company proceeded with a comprehensive internal review of the Pre-Feasibility Study. The Pre-Feasibility Study is currently in a finalisation stage.
Additional drilling activity at Sukhoi Log
Polyus continues in-fill drilling campaign. In the reporting period, Polyus completed its in-fill drilling programme for 2020 with 35,200 meters drilled, compared to the 30,000 meters initially planned. This drilling is designed to improve the confidence of Inferred Mineral Resources and will allow the Company to better define the gold mineralisation within the future pit area, where Polyus expects to carry out mining activities during the first years of Sukhoi Log's operations.
The Company is also proceeding with further geotechnical drilling (1,700 meters drilled in the third quarter of 2020 out of 3,000 meters planned for 2020). The results of this drilling programme will be used in future studies.
Polyus consolidated 100% of SL Gold, Sukhoi Log deposit JV
In the third quarter of 2020, Polyus exercised its right to accelerate the buy-out of LLC "RT Business Development" participation interest in SL Gold, in the holder of the Sukhoi Log deposit license, increasing its participation interest from 78% to 100% for a total consideration of approximately $128.2 million.
FINANCIAL UPDATE
Gold sales
In the third quarter of 2020, the Company sold a total of 772 thousand ounces of gold, a 15% increase on the previous quarter. Total gold sales include 70 thousand ounces of gold contained in concentrate from Olimpiada.
Estimated gold sales in the reporting period totalled approximately $1,444 million with an estimated weighted-average gold selling price of $1,907/oz, compared to $1,148 million in the previous quarter and $1,061 million in the third quarter of 2019.
Debt management
The Company's gross debt decreased to $3,932 million[2], compared to $4,160 million as at the end of the second quarter of 2020. In the reporting period, Polyus prepaid several credit facilities in a total amount of $150 million. The Company's debt maturity profile remains smooth with limited debt maturities outstanding until the end of 2020.
As at 30 September 2020, the Company's estimated cash position stood at $1,633 million (30 June 2020: $1,654 million) and its estimated net debt position decreased, compared to the previous quarter and amounted to $2,299 million (30 June 2020: $2,506 million).
Dividend update
In August, the Board of Directors of PJSC Polyus has recommended the dividends for the first six months ended 30 June 2020 in the amount of 240.18 Russian roubles per ordinary share. The dividend amount is equivalent to approximately $3.01 per ordinary share, or $1.51 per depositary share (with two depositary shares representing interest in one ordinary share)[3].
The total recommended dividend payout for the first half of 2020 amounts to approximately $410 million3, in line with the Company's dividend policy. The dividend has been approved by the Company's Extraordinary General Shareholders' Meeting on 30 September 2020. The dividend record date was set on 20 October 2020.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
Debt maturities [4], $ mln | 4 | 258 | 499 | 921 | 2,159 | 50 |
Eurobonds | Bank loans | Finance lease | Local rouble bonds |
49% | 36% | 2% | 13% |
| 3Q'20 | 2Q'20 | Q-o-Q | 1Q'20 | 4Q'19 | 3Q'19 | Y-o-Y | 9M'20 | 9M'19 | Y-o-Y |
Refined gold sold, koz | 702 | 646 | 9% | 533 | 722 | 650 | 8% | 1,881 | 1,826 | 3% |
Gold contained in concentrate, koz | 70 | 26 | n/a | 11 | 172 | 79 | -11% | 107 | 158 | -32% |
Gold payable in concentrate, koz | 57 | 18 | n/a | 9 | 140 | 67 | -15% | 84 | 131 | -36% |
Total gold sales, koz | 772 | 672 | 15% | 544 | 894 | 729 | 6% | 1,988 | 1,984 | 0% |
Gold sales, $ mln | 1,444 | 1,148 | 26% | 861 | 1,277 | 1,061 | 36% | 3,453 | 2,688 | 28% |
Weighted-average refined gold selling price, $/oz | 1,907 | 1,723 | 11% | 1,592 | 1,482 | 1,482 | 29% | 1,755 | 1,372 | 28% |
Average LBMA price, $/oz | 1,907 | 1,711 | 11% | 1,583 | 1,481 | 1,472 | 30% | 1,736 | 1,364 | 27% |
Gross debt (incl. derivatives), $ mln | 3,932 | 4,160 | -5% | 4,934 | 5,054 | 4,931 | -20% | 3,932 | 4,931 | -20% |
Net debt (incl. derivatives), $ mln | 2,299 | 2,506 | -8% | 3,056 | 3,253 | 3,393 | -32% | 2,299 | 3,393 | -32% |
CONFERENCE CALL INFORMATION
Polyus will host an analyst conference call on 22 October 2020 at 2 pm London time (4 pm Moscow time) to present and discuss the third quarter operating results.
To join the conference call, please dial:
Conference ID: 63885695#
UK
+44 207 194 37 59 (Local access)
0800 376 61 83 (Toll free)
USA
+1 646 722 49 16 (Local access)
844 286 06 43 (Toll free)
Russia
+7 495 646 93 15 (Local access)
8 800 500 98 63 (Toll free)
To access the replay, please dial:
Passcode: 418953750#
UK
+44 20 3364 51 47
US
+1 646 722 49 69
Russia
+7 495 249 16 71
Enquiries:
Investor and Media contact
Victor Drozdov, Director Communications & Investor Relations (CIR) Department
+7 495 641 33 77
drozdovvi@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.
[1] Based on a 200,000 work hours' factor.
[2] Including liabilities under cross-currency and interest rate swaps related to RUB-denominated bank credit facilities
[3] Based on the currency exchange rate of the Central Bank of Russia of 79.6845 Russian roubles per 1 U.S. dollar as of 30 September 2020
[4] Net of non-cash IFRS adjustments