Polymetal cut quarterly revenue by 36% and reduced production by 9%

The gap between sales and production is expected to close in the third quarter

Moscow. 21 July. INTERFAX.RU – In the second quarter of 2022, Polymetal production decreased by 9% year-on-year, to 326 thousand ounces in gold equivalent, the company said.

A decline in production at Kyzyl and Albazino due to low grades and a planned shutdown of the Amursk MMC for maintenance has completely shut down the new output at Nezhda, Polymetal explained.

Quarterly revenue fell 36% yoy to $433mn. Gold sales for the quarter fell 40% to 189koz, while silver rose 3% to 4.4mn oz.

In Q2, Polymetal’s Russian operations accumulated 130,000 ounces of gold and silver bullion reserves in gold equivalent. The gap between sales and production is expected to close in the third quarter as the company ramps up exports to various Asian markets, Polymetal said.

Polymetal’s net debt at the end of the second quarter was $2.8 billion.

With the ruble strengthening against the dollar, Polymetal will announce an updated cash and capex forecast for 2022 in September, the company said.

Polymetal’s current TCC forecast for 2022 is $850-950 per GE oz, total cash costs (AISC) $1200-1300 per ounce, capex $650 million.

Production forecast for 2022 confirmed at 1.7 Moz in gold equivalent: 1.2 Moz in Russia and 500 koz in Kazakhstan. However, Polymetal notes that due to quarantine and logistical difficulties in sea and rail transportation in China, there is a risk of not meeting the forecast indicators.

In the first half of 2022, Polymetal’s gold equivalent production decreased by 7% compared to the first half of 2021, to 697 thousand ounces in gold equivalent, including 453 thousand ounces from Russian operations and 244 thousand ounces from Kazakhstan operations. Due to restrictions imposed by China in connection with COVID-19, Polymetal was forced to reduce the shipment of gold concentrate from Nezhda and Kyzyl.

Polymetal is Russia’s largest silver producer and one of the leading gold miners. The holding’s enterprises are located in the Magadan and Sverdlovsk regions, the Khabarovsk Territory, Yakutia, Chukotka and Kazakhstan. The largest shareholders are the „IST” group of Alexander Nesis and partners (about 24%) and BlackRock funds (SPB: BLK) (about 10%).