16 Apr 2012 07:04
Release time |
IMMEDIATE |
Date | 16 April 2012 |
Polymetal International plc
Q1 2012 production results announcement
Polymetal International plc (LSE: POLY) (together with its subsidiaries, including JSC "Polymetal" - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's production results for the first quarter 2012 ended March 31, 2012.
HIGHLIGHTS
3 months ended Mar 31, | % change1 | ||
2012 | 2011 | ||
Waste mined, Kt | 18,691 | 18,752 | +0% |
Underground development, m | 11,159 | 7,715 | +45% |
Ore mined, Kt | 3,111 | 1,893 | +64% |
Open-pit | 2,708 | 1,591 | +70% |
Underground | 404 | 301 | +34% |
Ore processed, Kt | 2,196 | 1,683 | +30% |
Production2 | |||
Gold, Koz | 101 | 82 | +24% |
Silver, Moz | 5.7 | 3.2 | +74% |
Copper, tonnes | 1,555 | 1,744 | -11% |
Gold equivalent, Koz3 | 203 | 145 | +41% |
Sales | |||
Gold, Koz | 105 | 93 | +13% |
Silver, Moz | 5.9 | 3.0 | +99% |
Copper, tonnes | 1,884 | 1,079 | +75% |
Revenue, US$m4 | 377 | 229 | +64% |
Safety | |||
LTIFR | 0.7 | 0.9 | -38% |
FIFR | - | - | n/a |
Notes: (1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all the tables in this release (2) From Q2 2011 Polymetal has applied the new methodology for reporting metals produced: production previously reported upon shipment of dore, precipitate or concentrate from the mine sites to third party refineries or off-takers, is now reported when dore and precipitate are received at the gold rooms or when the concentrate is fully prepared for shipment at the mine site. The comparative numbers for Q1 2011 are restated to reflect the new methodology. (3) Based on 1:60 Ag/Au and 5:1 Cu/Au conversion ratios (4) Calculated based on consolidated management accounts. Unaudited | |||
·; First quarter operating performance was strong, with gold equivalent production growing 41% year-on-year to 203 Koz on the back of strong improvements at Omolon and Dukat. Additional 32 Koz of payable gold is contained within concentrate produced at Albazino during the quarter.
·; Gold production in the quarter increased 24% y-o-y to 101 Koz while silver production jumped 74% to 5.7 Moz.
·; Processing of high-grade ore from Sopka commenced at Omolon with approx. 318 Kt of ore trucked to the Kubaka mill on the winter road to date.
·; Albazino processing plant reached design recoveries and throughput in March.
·; Subsequent to the end of the period, on April 5, first dore bar containing 263 oz of gold was poured at the Amursk POX facility.
·; The Company is well on track to deliver on FY2012 gold equivalent production guidance of 1 Moz.
"The first quarter results, including successful start-up of production at the Amursk POX plant, achievement of design recoveries at Albazino, and smooth operation of winter road at Omolon, give us further confidence in achieving our ambitious 2012 targets," said Vitaly Nesis, CEO of Polymetal.
"The effect of these achievements will be fully visible through meaningful production growth in the second quarter. Further during the year, we will be focusing on timely ramp-up of the POX plant, and the start-up of Mayskoye concentrator."
DUKAT OPERATIONS
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Dukat | |||
Waste mined, Kt | 317 | 155 | +104% |
Underground development, m | 6,035 | 3,029 | +99% |
Ore mined, Kt | 372 | 276 | +35% |
Open-pit | 71 | 46 | +55% |
Underground | 301 | 230 | +31% |
Goltsovoye | |||
Underground development, m | 910 | 884 | +3% |
Ore mined (underground), Kt | 6 | 18 | -67% |
Lunnoye + Arylakh | |||
Waste mined, Kt | 742 | 571 | +30% |
Underground development, m | 915 | 371 | +147% |
Ore mined, Kt | 90 | 69 | +30% |
Open-pit | 42 | 38 | +10% |
Underground | 48 | 31 | +54% |
PROCESSING | |||
Dukat | |||
Ore processed, Kt | 385 | 280 | +37% |
Head grades | |||
Gold, g/t | 0.6 | 0.8 | -28% |
Silver, g/t | 360 | 378 | -5% |
Recovery3 | |||
Gold | 79.3% | 73.3% | +8% |
Silver | 81.6% | 74.9% | +9% |
Production | |||
Gold, Koz | 5.8 | 3.9 | +48% |
Silver, Moz | 3.7 | 1.9 | +99% |
Lunnoye | |||
Ore processed, Kt | 85 | 68 | +26% |
Head grades | |||
Gold, g/t | 1.5 | 1.2 | +25% |
Silver, g/t | 424 | 390 | +9% |
Recovery3 | |||
Gold | 92.1% | 91.5% | +1% |
Silver | 87.6% | 87.3% | +0% |
Production | |||
Gold, Koz | 3.7 | 2.4 | +56% |
Silver, Moz | 1.0 | 0.7 | +34% |
TOTAL PRODUCTION | |||
Gold, Koz | 9.5 | 6.3 | +51% |
Silver, Moz | 4.7 | 2.6 | +80% |
Quarterly silver production at the Dukat operations increased 80% year-on-year driven by a strong improvement in throughput and recovery at the Omsukchan concentrator.
At Dukat underground mine, development increased almost twofold as increased ore tonnage is sourced mainly from underground.
Ore mining started at Nachalny-2 satellite pit at Dukat leading to a significant increase in the amounts of material moved.
At Goltsovoye, underground mining concentrated on ore body access in anticipation of intensive stope mining in the second quarter.
At Lunnoye, grades processed improved significantly as underground dilution was reduced meaningfully following the change of the mining method from sub-level open stoping to cut-and-fill.
Lunnoye processing plant demonstrated record throughput following the replacement of the SAG mill shell in the Q3 2011.
KHAKANJA
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Khakanja + Yurievskoye | |||
Waste mined, Kt | 1,788 | 2,546 | -30% |
Underground development, m | 443 | 330 | +34% |
Ore mined, Kt | 324 | 82 | +296% |
Open-pit | 287 | 81 | +257% |
Underground | 37 | 1 | NM |
Avlayakan | |||
Waste mined, Kt | 355 | 214 | +66% |
Ore mined (open pit), Kt | 9 | 15 | -42% |
PROCESSING | |||
Ore processed, Kt | 149 | 158 | -6% |
Grade | |||
Gold, g/t | 3.6 | 4.6 | -20% |
Silver, g/t | 259 | 158 | +64% |
Recovery1 | |||
Gold | 94.9% | 94.7% | +0% |
Silver | 77.4% | 73.2% | +6% |
TOTAL PRODUCTION | |||
Gold, Koz | 16.1 | 21.7 | -26% |
Silver, Moz | 0.9 | 0.6 | +53% |
Notes: (1) Technological recovery, includes gold and silver within work-in-progress inventory (precipitate) | |||
Gold and silver production at Khakanja decreased by 26% and increased by 53%, respectively, year-on-year as most ore processed in the quarter came from the pit 3 at Khakanja with low gold grades and elevated silver grades. Higher production levels in Q4 2011 compared to Q1 2012 were further influenced by processing of high grade ores from Avlayakan and Sopka completed in 2011.
At Avlayakan, open pit mining has been completed in the Central pit with current activity concentrated on the stripping at the North-eastern pit. Shipping of 50 Kt of high-grade ore from Avlayakan to Khakanja is planned for in 2012.
At Ozerny, preparation for mining works is in full swing. Winter road and two ice bridges have been constructed, equipment and materials delivered, construction of temporary camp and infrastructure facilities have also been completed. Open-pit mining at Ozerny is expected to start in Q4 of 2012.
VORO
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Voro | |||
Waste mined, Kt | 2,632 | 2,744 | -4% |
Ore mined (open pit), Kt | 184 | 199 | -8% |
Degtyarskoye | |||
Waste mined, Kt | 273 | 416 | -34% |
Ore mined (open pit), Kt | 21 | 59 | -64% |
Fevralskoye | |||
Waste mined, Kt | 65 | 72 | -10% |
Ore mined (open pit), Kt | - | 4 | -100% |
PROCESSING | |||
Voro Heap Leach | |||
Ore stacked, Kt | - | - | n/a |
Gold head grade, g/t | - | - | n/a |
Gold recovery1 | n/a | n/a | n/a |
Gold production, Koz | 4.9 | 5.1 | -5% |
Voro CIP | |||
Ore processed, Kt | 219 | 211 | +4% |
Gold head grade, g/t | 5.6 | 5.5 | +2% |
Gold recovery | 78.6% | 78.8% | -0% |
Gold production, Koz | 27.2 | 23.5 | +16% |
TOTAL PRODUCTION | |||
Gold, Koz | 32.1 | 28.6 | +12% |
Silver, Moz | 0.033 | 0.03 | +9% |
Notes: (1) Heap leach recoveries are meaningful for full year only due to the influence of seasonality | |||
Gold production at Voro grew 12% year-on-year as both grade processed and throughput at the CIP increased modestly.
Mining at Degtyarskoye is expected to be fully completed by the end of this year with open pit reclamation taking additional six months.
Trial mining at Fevralskoye indicated that the nature of mineralization makes sizable open-pit mining at the deposit unlikely. The company is currently reviewing strategic options in regard to this asset with the decision expected to be made in Q2 of 2012.
VARVARA
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Waste mined, Kt | 5,857 | 6,526 | -10% |
Ore mined (open pit), Kt | 917 | 768 | +19% |
PROCESSING | |||
Flotation | |||
Ore processed, Kt | 227 | 230 | -1% |
Grade | |||
Gold, g/t | 1.4 | 1.2 | +14% |
Copper | 0.80% | 0.90% | -11% |
Recovery1 | |||
Gold | 54.6% | 62.6% | -13% |
Copper | 90.5% | 90.9% | -0% |
Production | |||
Gold (in concentrate), Koz | 5.1 | 5.5 | -8% |
Copper (in concentrate), t | 1,555 | 1,744 | -11% |
Leaching | |||
Ore processed, Kt | 680 | 601 | +13% |
Gold head grade, g/t | 1.2 | 1.0 | +18% |
Gold recovery1 | 86.8% | 79.4% | +9% |
Gold production (in dore), Koz | 19.5 | 13.1 | +49% |
TOTAL PRODUCTION | |||
Gold, Koz | 24.6 | 18.6 | +32% |
Copper, t | 1,555 | 1,744 | -11% |
Notes: (1) Technological recovery, includes gold and copper within work-in-progress inventory | |||
At Varvara, year-on-year gold production grew 32% on the back of head grades growth, with all other operating parameters relatively unchanged. Copper production declined by 11% mainly as a result of copper grade declining in accordance with the mine plan.
Gold recovery in the flotation circuit declined by 13 percentage points as the mining centered on relatively complicated mineralization in the eastern part of the pit.
OMOLON OPERATIONS
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Sopka | |||
Waste mined, Kt | 1,721 | 591 | +191% |
Ore mined (open pit), Kt | 400 | 30 | NM |
Ore trucked to Kubaka, Kt | 300 | 29 | NM |
Birkachan | |||
Waste mined, Kt | 1,552 | 1,577 | -2% |
Ore mined (open pit), Kt | 485 | 199 | +144% |
Tsokol | |||
Waste mined, Kt | 304 | 0 | n/a |
Ore mined (open pit), Kt | 12 | 0 | n/a |
PROCESSING | |||
Kubaka Mill | |||
Ore processed, Kt | 172 | 135 | +27% |
Gold head grade, g/t | 4.1 | 1.7 | +136% |
Gold recovery | 93.6% | 89.4% | +5% |
Gold production, Koz | 18.8 | 6.5 | +188% |
TOTAL PRODUCITON | |||
Gold, Koz | 18.8 | 6.5 | +188% |
Silver, Moz | 0.04 | 0.01 | +190% |
Notes: (1) Heap leach recoveries are meaningful for full year only due to the influence of seasonality | |||
Gold production at Omolon almost tripled year-on-year driven mostly by grade improvement as mining at Birkachan open pit accessed higher-grade material at the bottom of the pit.
The winter road used to truck high grade ore (average grade of approx. 8.4 g/t gold and 270 g/t silver) from Sopka to Kubaka operated well with more than 300 Kt trucked since the beginning of operation in late December 2011 (compared to the total of 44 Kt trucked during the full year 2011).
High-grade ore processing using the newly commissioned Merrill Crowe circuit commenced in late March, which is expected to result in significant production increases in Q2 of 2012.
Mining at Sopka intensified, with an almost three-fold increase year-on-year as mining accesses deeper levels of mineralization.
Open-pit mining at Tsokol deposit, only 1 km away from the Kubaka mill, has started with the objective to produce 60 Kt of ore at 4 g/t gold in 2012.
ALBAZINO-AMURSK
3 months ended Mar 31, | % change |
| ||
2012 | 2011 |
| ||
MINING |
| |||
Waste mined, Kt | 3,150 | 3,341 | -6% |
|
Ore mined (open pit), Kt | 280 | 153 | +83% |
|
| ||||
PROCESSING |
| |||
Ore processed, Kt | 278 | - | n/a |
|
Gold head grade, g/t | 4.2 | - | n/a |
|
Gold recovery1 | 84.1% | - | n/a |
|
Concentrate produced, Kt | 21.8 | - | n/a |
|
Concentrate gold grade, g/t | 45.4 | - | n/a |
|
Gold in concentrate, Koz2 | 31.7 | - | n/a |
|
TOTAL PRODUCITON |
| |||
Gold, Koz | - | - | - |
|
Notes: (1) To concentrate (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production | ||||
Albazino has achieved its design recovery level in March and produced 21.8 Kt of concentrate with 31.7 Koz of contained gold.
The concentrate was trucked to Amursk for further processing. The concentrate stockpiled now totaling 61 Koz of contained gold is not included in total metal production volumes. It is expected that some concentrate will be sold to a Chinese off-taker in Q2 and Q3 of this year.
The POX plant has successfully poured its first gold on April 5th and is expected to reach design parameters by the end of the third quarter of 2012.
MAYSKOYE
3 months ended Mar 31, | % change | ||
2012 | 2011 | ||
MINING | |||
Underground development, m | 2,856 | 3,065 | -7% |
Ore mined (underground), Kt | 12 | 20 | -41% |
Underground development at Mayskoye is continuing at a stable pace with the commencement of stoping scheduled for the Q4 of 2012 to coincide in time with the planned start-up of the concentrator.
On March, 12 Mayskoye production site has been connected to the regional power grid. This is expected to lead to a material decline in cash costs of production once the operation is up and running at full throughput.
Equipment installation as well as the laying of pipes and ducts has progressed during the quarter. It is currently expected that the concentrator will be started up in December of 2012.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Monday, April 16, 2012 at 5:30pm Moscow time (2:30pm London time; 9:30am New York time).
To participate in the call, please dial:
810 8002 198 4011 (toll-free from Russia), or
0800 358 5256 (toll-free from the UK), or
1 877 941 6013 (toll-free from the US), or
+44 20 7190 1590 (from outside the UK, the US and Russia), or follow the link:
http://www.cyber-presentation.de/cgi-bin/visitors.ssp?fn=visitor&id=1713
Please be prepared to introduce yourself to the moderator or register.
Recording of the call will be available on Polymetal's website (www.polymetal.ru) and at the above link immediately after the call. It is also will be available at 0800 358 9369 (toll-free from the UK) or +44 20 7959 6720 (from outside the UK), access code 4531507#, from 7:30pm Moscow time Monday, April 16, till 11:59pm Moscow time Monday, April 23, 2011.
Enquiries
| Media |
| Investor Relations | |
College Hill Leonid Fink Tony Friend | +44 20 7457 2020 | Polymetal Pavel Danilin Maxim Nazimok | +7 812 313 5964 |
| Joint Corporate Brokers |
| ||
Morgan Stanley Edward Knight Sandip Patodia | +44 20 7425 8000 | Canaccord Genuity John Prior Roger Lambert | +44 20 7523 8350 |
FORWARD-LOOKING STATEMENTS
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED