POG.L Regulatory News (POG)

15 December 2016

Petropavlovsk PLC

Production Update

Petropavlovsk PLC ("Petropavlovsk" or the "Company" or, together with its subsidiaries, the "Group") outlines the results of the previously announced Impact Assessment at Pioneer's Andreevskaya deposit.

Due to adverse weather throughout the Amur region in November, the Company suspended operations in order to safely assess the impact at Andreevskaya East. This thorough assessment entailed detailed mapping, recording and monitoring of rock fractures, manual systematic tests of the pit wall rock competency, and when feasible, small test blasts.

From this work, the Impact Assessment concluded that until the active layer of the permafrost has set, thus binding the pit walls, blasting and mining at Andreevskaya East might increase the risk of rock falls. However, encouragingly, current temperatures and the speed of freezing have returned to the median level expected for this time of year. Accordingly, the Company expects the Andreevskaya East pit to return to full scale, high grade, non-refractory mining before year end.  

In the short term, all dislodged material is being cleared from the pit and the benches are being rehabilitated. Any available mining fleet has been temporarily utilised at Pioneer's other operating pits.

The 2016 production is now expected to be between 415,000 and 430,000 gold ounces at a preliminary total cash cost of c.$700 per ounce. The reduction is largely due to the aforementioned mining disruptions experienced at Pioneer, the Company's largest mine. The range in guidance is attributable to the high grade nature of the Andreevskaya East deposit, averaging 30g/t.

The Company's mines at Albyn, Malomir and Pokrovskiy all show robust rock stability and open pit mining remains on schedule. Pioneer and Malomir underground projects continue to progress well, with first production on schedule for H2 2017. Development of the Pressure Oxidation Plant ("POX Hub") remains on schedule for commissioning by the end of 2018, with first refractory ore production by the beginning of 2019.

Furthermore, the Company will provide an update on the previously announced potential transactions by close of business tomorrow, 16th December 2016.

Commenting, Pavel Maslovskiy, CEO said:

"The Impact Assessment gives us a fuller understanding of the temporary challenges we have encountered at Andreevskaya East. Having paused operations to ascertain their full significance, we can now look to 2017 with confidence that safe, sustainable operations can recommence in the near future. We have an overriding commitment to our employees and to standards of operational efficiency, which together render any delays to production at Pioneer inevitable in these circumstances."

About Petropavlovsk PLC

Petropavlovsk is one of Russia's leading gold mining companies. We operate some of the largest gold mines in Russia in terms of their gold production output, processing capacity and resource base. Furthermore, our assets have untapped exploration potential. We are a leading employer and contributor to the development of the local economy in the Amur region, Russian Far East, where we have operated since 1994. As at 31 December 2015, we have produced approximately 6Moz of gold.

The Company is listed on the Main Market of the London Stock Exchange (Ticker POG:LN)

Enquiries

Petropavlovsk PLC

Alya Samokhvalova

Alexandra Carse

+44 (0) 20 7201 8900

Maitland

Neil Bennett

James Isola

+44 (0) 20 7379 5151

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.