Source - RNS
RNS Number : 7960M
Polymetal International PLC
18 October 2016
 

 

 

 

 

Release time

 

IMMEDIATE

Date

18 October 2016

 

 

Polymetal International plc

Q3 2016 production results

 

Polymetal International plc (LSE, MOEX: POLY; ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's production results for the third quarter and nine months ended September 30, 2016.

HIGHLIGHTS

·     Polymetal produced 372 Koz of gold equivalent (GE) in Q3 2016, an increase of 29% quarter-on-quarter. The increase in production was driven by seasonal de-stockpiling at Mayskoye, launch of the Svetloye heap leach at Okhotsk operations, and a strong performance at Albazino and Varvara.

·     Year-on-year GE production dropped 5% as grades declined at Dukat and Omolon. Polymetal remains on track to deliver 1.26 Moz gold equivalent production for the year. We also re-iterate the cost guidance for the full year: TCC of US$ 525-575/GE oz and AISC of US$ 700-750/GE oz.

·     Polymetal generated significant free cash flow in the third quarter. Net debt remained essentially unchanged at US$ 1,469 million after the company paid US$ 38 million of interim dividends and spent US$ 100 million to acquire Komarovskoye.

·     At Kyzyl, construction activities are progressing on schedule. The amended subsoil contract, together with the program of work, received the final approval of the Kazakh government. The project remains on track to produce its first concentrate in Q3 2018.

·     At Svetloye, gold production commenced in August, delivering 15 Koz of gold during the quarter. Svetloye is currently running at 100% of design capacity and is set to become the key driver for sustaining production levels at the Okhotsk hub in the long term.

·     Polymetal regrettably reports a fatal incident at Svetloye on 8th October 2016. The Company will continue to implement additional measures to reinforce safety risk management procedures in order to fully eliminate fatalities at all of its operations.

·     Polymetal reconfirms its production guidance for 2017 at 1.4 Moz of GE and for 2018 at 1.55 Moz of GE.

·     Polymetal will be hosting an Analyst and Investor Day on November 14 in London to provide an update on key development projects.

"We remain firmly on track to meet our annual production and cost guidance. The commissioning of Svetloye, acquisition of Komar and successful integration of Kapan, are important milestones in our medium-term growth plans", said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. "As originally expected, we delivered solid free cash flow for the quarter and remain strongly committed to shareholder returns."  

 

 

3 months ended Sep 30,

% change1

9 months ended Sep 30,

% change1

 

2016

2015

2016

2015

 

 

 

 

 

 

 

Waste mined, Mt

23.9

17.2

+39%

58.2

50.0

+16%

Underground development, km

24.6

18.1

+36%

68.3

54.0

+26%

Ore mined, Kt

3,462

3,116

+11%

9,194

9,124

+1%

Open-pit

2,405

2,360

+2%

6,448

6,855

-6%

Underground

1,057

755

+40%

2,746

2,269

+21%

Ore processed, Kt

3,306

2,852

+16%

8,593

8,289

+4%

Production

 

 

 

 

 

 

Gold, Koz

268

270

-1%

606

642

-6%

Silver, Moz

8.0

9.3

-14%

22.2

24.9

-11%

Copper, tonnes

311

670

-54%

1,266

808

+57%

Gold equivalent, Koz2

372

390

-5%

894

957

-7%

Sales

 

 

 

 

 

 

Gold, Koz

242

261

-7%

561

614

-9%

Silver, Moz

8.3

8.4

-2%

21.3

22.4

-5%

Copper, kt

0.3

-

NA

0.5

0.7

-36%

Zinc, kt

1.4

-

NA

1.5

-

NA

Revenue, US$m3

466

402

+16%

1,059

1,050

+1%

Net debt, US$m4

1,469

1,435

+2%

1,469

1,298

+13%

Safety5

 

 

 

 

 

 

   Fatalities

-

2

-100%

2

5

-60%

LTIFR

0.19

0.19

-

0.18

0.21

-14%

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 tables in this release.

                (2) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.

                (3) Calculated based on the unaudited consolidated management accounts. Concentrate sales are recorded based on forward prices for the expected dates of final settlement and concentrate revenue is presented net of refining and treatment charges.

(4) Non-IFRS measure based on unaudited consolidated management accounts. Net debt equals to current and non-current borrowings less cash and cash equivalents and includes the liability for dividend payable. Comparative information is presented for 30 June 2016 (for the three months period) and 31 December 2015 (for the nine months period).

                (5) LTIFR =lost time injury frequency rate per 200,000 hours worked.

                (6) NA = not available, NM - not material

 

PRODUCTION BY MINE

 

3 months

ended Sep 30,

%

change1

9 months

ended Sep 30,

%

change1

 

2016

2015

2016

2015

 

 

 

 

 

 

 

GOLD EQ. (KOZ) 2

 

 

 

 

 

 

Dukat

93

108

-14%

280

297

-6%

Albazino-Amursk

72

64

+13%

190

173

+10%

Mayskoye

47

71

-34%

68

91

-25%

Omolon

41

60

-32%

108

155

-30%

Voro

36

34

+7%

93

105

-11%

Varvara

22

20

+5%

57

58

-2%

Okhotsk

49

33

+49%

79

77

+2%

Kapan

12

-

NA

18

-

NA

TOTAL

372

390

-5%

894

957

-7%

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 tables in this release.

                (2) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.

 

 

CONFERENCE CALL AND WEBCAST

Polymetal will hold a conference call and webcast on Tuesday, 18 October, 16:00 Moscow time (14:00 London time).

To participate in the call, please dial:

8 10 800 204 140 11 access code 95884697# (free from Russia), or

+44 (0) 20 3367 9462 (free from the UK), or

+1 855 402 7761 (free from the US), or

Any of the above numbers (from outside the UK, the US and Russia) or follow the link: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=4019

Please be prepared to introduce yourself to the moderator or register.

Webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=4019. A recording of the call will be available immediately after the call at +44 20 3367 9460 (from within the UK), +1 87 7642 3018 (from within the US) and +7 495 745 7948 (from within Russia), access code 304009#, from 16:30 Moscow time Tuesday, October 18   , till 16:30 Moscow time Tuesday, October 25, 2016.

Enquiries

Media

 

Investor Relations

FTI Consulting

Leonid Fink

Jenny Payne

+44 20 3727 1000

Polymetal

Maxim Nazimok

Evgenia Onuschenko

Maryana Nesis

[email protected]

 

+7 812 313 5964 (Russia)

+44 20 7016 9503 (UK)

Joint Corporate Brokers

 

Morgan Stanley

Sam McLennan

Richard Brown

+44 20 7425 8000

RBC Europe Limited

Tristan Lovegrove

Marcus Jackson

+44 20 7653 4000

 

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

 

 

DUKAT OPERATIONS

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Dukat

 

 

 

 

 

 

Underground development, m

8,928

8,218

+9%

26,514

26,248

+1%

Ore mined (underground), Kt

409

434

-6%

1,211

1,228

-1%

 

 

 

 

 

 

 

Goltsovoye

 

 

 

 

 

 

Underground development, m

1,449

1,996

-27%

4,712

5,615

-16%

Ore mined (underground), Kt

48

40

+21%

141

151

-7%

 

 

 

 

 

 

 

Lunnoye + Arylakh

 

 

 

 

 

 

Underground development, m

1,407

1,478

-5%

3,952

4,188

-6%

Ore mined (underground), Kt

104

106

-3%

314

293

+7%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Dukat

 

 

 

 

 

 

Ore processed, Kt

474

484

-2%

1,458

1,363

+7%

Head grades

 

 

 

 

 

 

Gold, g/t

0.7

0.7

-3%

0.6

0.6

-7%

Silver, g/t

386

477

-19%

374

467

-20%

Recovery1

 

 

 

 

 

 

Gold

87.1%

84.2%

+3%

86.3%

84.4%

+2%

Silver

85.6%

86.4%

-1%

85.2%

85.8%

-1%

Production

 

 

 

 

 

 

Gold, Koz

9.2

9.3

-2%

23.9

23.1

+4%

Silver, Moz

4.9

6.3

-22%

14.8

17.0

-13%

 

Lunnoye

 

 

 

 

 

 

Ore processed, Kt

107

101

+6%

325

311

+4%

Head grades

 

 

 

 

 

 

Gold, g/t

1.4

1.4

+2%

1.5

1.5

+3%

Silver, g/t

465

418

+11%

463

426

+9%

Recovery1

 

 

 

 

 

 

Gold

91.9%

92.3%

-0%

92.4%

90.7%

+2%

Silver

91.0%

89.7%

+1%

92.0%

88.9%

+3%

Production

 

 

 

 

 

 

Gold, Koz

4.5

4.4

+2%

15.2

13.9

+9%

Silver, Moz

1.5

1.2

+17%

4.5

3.8

+17%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

13.6

13.7

-0%

39.1

37.0

+6%

Silver, Moz

6.4

7.6

-16%

19.3

20.8

-7%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory (concentrate, precipitate)

Year-on-year silver production fell by 16%, driven mostly by a normalisation of the grade profile at the Dukat underground mine, which produced exceptionally high grades last year. The Dukat concentrator continues to operate significantly above nameplate throughput capacity, with additional tonnage sourced from historic low-grade stockpiles.

At Lunnoye, both grades and ore volumes mined were higher y-o-y and q-o-q, leading to a 17% increase in silver production for the quarter.

 

ALBAZINO-AMURSK

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Waste mined, Kt

5,226

4,576

+14%

13,845

12,715

+9%

Underground development, m

1,447

1,310

+10%

4,379

3,514

+25%

Ore mined, Kt

482

389

+24%

1,367

1,119

+22%

Open-pit

409

389

+5%

1,163

1,119

+4%

Underground

72

-

NA

205

-

NA

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Albazino concentrator

 

 

 

 

 

 

Ore processed, Kt

409

388

+5%

1,239

1,191

+4%

Gold head grade, g/t

5.1

5.5

-7%

5.1

5.3

-4%

Gold recovery1

88.0%

86.0%

+2%

87.0%

87.4%

-0%

Concentrate produced, Kt

34.2

34.7

-1%

102.8

100.3

+2%

Concentrate gold grade, g/t

53.6

52.6

+2%

53.2

54.8

-3%

Gold in concentrate, Koz2

58.9

58.6

+1%

175.8

176.8

-1%

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

43.9

41.9

+5%

117.1

115.4

+1%

Gold head grade, g/t

53.3

55.3

-4%

52.1

52.6

-1%

Recovery

94.1%

94.0%

+0%

94.1%

94.1%

+0%

Gold produced, Koz

71.9

63.8

+13%

189.9

173.4

+10%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

71.9

63.8

+13%

189.9

173.4

+10%

Notes:     (1) To concentrate

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon completion of downstream processing at the Amursk POX

Q3 Albazino/Amursk gold production was up 13% year-on-year. Quarterly throughput at the POX plant increased by 5% year-on-year. The decline in grades at Albazino was more than compensated for by increased throughput and better recoveries at the concentrator.

Albazino underground mine productivity and dilution control continued to improve. Careful geotechnical management of ground conditions remains essential for further improvement in productivity and grades.

The POX debottlenecking project has been approved by the board of directors. The capacity of the POX facility is expected to increase by approximately 50% in terms of concentrate processed. The key additions to the equipment will comprise a second oxygen plant, an autoclave discharge thickener, press filters for thickener underflow and upgrades to heat recovery and water treatment sections.

The increase in POX capacity will enable Polymetal to retain approximately 50% of Kyzyl concentrate for in-house treatment as opposed to a 3rd party off-take and is expected to improve effective gold recovery from concentrate, as well as bring down processing and transportation costs. Polymetal plans to ramp up the debottlenecked POX plant to full expanded capacity in the second half of 2018, in time to take first feed from the Kyzyl concentrator.  

 

MAYSKOYE

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Underground development, m

4,800

3,446

+39%

14,832

9,440

+57%

Ore mined (underground), Kt

213

152

+40%

502

519

-3%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Mayskoye concentrator

 

 

 

 

 

 

Ore processed, Kt

214

197

+9%

541

634

-15%

Gold head grade, g/t

5.1

5.3

-5%

5.4

6.8

-21%

Gold recovery1

87.1%

83.2%

+5%

87.6%

86.0%

+2%

Concentrate produced, Kt

18.7

17.6

+6%

51.6

63.0

-18%

Concentrate gold grade, g/t

50.5

49.1

+3%

49.8

58.8

-15%

Gold in concentrate, Koz2

30.3

27.8

+9%

82.6

119.2

-31%

Concentrate sold, Kt

29.7

29.7

-0%

29.7

29.7

-0%

Payable gold in concentrate sold, Koz

43.2

59.6

-28%

43.2

59.6

-28%

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

2.0

4.1

-50%

13.7

16.8

-19%

Gold head grade, g/t

51.9

59.4

-12%

54.8

58.4

-6%

Recovery

94.0%

94.0%

+0%

94.1%

94.1%

+0%

Gold produced, Koz

4.1

11.5

-64%

25.0

31.8

-21%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

47.2

71.1

-34%

68.2

91.5

-25%

Notes:     (1) To concentrate

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in   total production upon sale to off-taker or internal downstream processing to saleable metal product.

For the 9 months, total gold production at Mayskoye decreased by 25% to 68 Koz year-on-year, mainly influenced by higher levels of dilution that led to grade declines in ore processed. The new mining method is making good progress as the amount of ore mined grew 27% quarter-on-quarter to 213 Kt. The focus is now on achieving rapid backfill to ensure lower dilution from secondary stopes and reduced primary stope length.

 

OMOLON

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

Dalneye

 

 

 

 

Waste mined, Kt

NA

-

1,042

-100%

Ore mined (open pit), Kt

NA

-

635

-100%

 

 

 

 

 

Tsokol

 

 

 

 

Waste mined, Kt

NA

-

396

-100%

Underground development, m

+49%

2,954

785

+276%

Ore mined (open pit), Kt

NA

-

176

-100%

Ore mined (underground), Kt

NA

70

-

NA

 

 

 

 

 

Birkachan

 

 

 

 

Waste mined, Kt

+2%

2,174

1,447

+50%

Underground development, m

NA

1,574

1,254

+26%

Ore mined (open pit), Kt

-10%

589

441

+34%

Ore mined (underground), Kt

NA

27

1

NM

 

 

 

 

 

Oroch

 

 

 

 

Waste mined, Kt

+4%

4,085

2,628

+55%

Ore mined (open pit), Kt

+45%

691

232

+198%

 

 

 

 

 

Olcha

 

 

 

 

Waste mined, Kt

NA

288

-

NA

Ore mined (open pit), Kt

NA

40

-

NA

 

 

 

 

 

TOTAL HUB

 

 

 

 

Waste mined, Kt

+19%

6,546

5,515

+19%

Underground development, m

+176%

4,528

2,039

+122%

Ore mined, Kt

+37%

1,417

1,485

-5%

    Open-pit

+23%

1,320

1,484

-11%

    Underground

NA

97

1

NM

 

 

 

 

 

PROCESSING

 

 

 

 

Kubaka Mill

 

 

 

 

Ore processed, Kt

212

207

+2%

629

622

+1%

Grade

 

 

 

 

 

 

Gold, g/t

4.3

6.3

-31%

4.6

6.1

-24%

Silver, g/t

182

227

-20%

110

184

-40%

Recovery1

 

 

 

 

 

 

Gold

92.5%

94.6%

-2%

90.7%

95.6%

-5%

Silver

91.3%

88.3%

+3%

86.2%

87.4%

-1%

Gold production, Koz

27.4

41.8

-34%

85.7

115.3

-26%

Silver production, Moz

1.1

1.5

-26%

1.8

3.1

-42%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

27.4

41.8

-34%

85.7

115.4

-26%

Silver, Moz

1.1

1.5

-26%

1.8

3.1

-42%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory

For the 9 months, gold and silver production at Omolon decreased year-on-year by 26% and 42% respectively, as high-grade ore from Sopka was replaced by Dalneye stockpiles and ore from Oroch.

Open-pit mining at Olcha commenced in August. The objective is to truck approximately 150 Kt of ore to the Kubaka plant in Q1 2017, which should result in higher grades and production levels.

Underground mining at Tsokol and Birkachan has been making good progress with a total increase of 176% year-on-year.  

VORO

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Voro

 

 

 

 

 

 

Waste mined, Kt

2,679

2,636

+2%

7,993

7,818

+2%

Ore mined (open pit), Kt

353

506

-30%

986

1,422

-31%

-     primary

237

379

-37%

775

1,086

-29%

-     oxidised

115

127

-9%

211

336

-37%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Voro Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

232

243

-5%

295

423

-30%

Gold head grade, g/t

1.7

1.9

-10%

1.2

1.8

-32%

Gold production, Koz

6.7

8.3

-19%

12.2

19.2

-36%

Voro CIP

 

 

 

 

 

 

Ore processed, Kt

252

243

+4%

750

698

+8%

Gold head grade, g/t

4.3

4.0

+8%

4.3

4.1

+6%

Gold recovery1

78.3%

79.2%

-1%

78.4%

78.8%

-1%

Gold production, Koz

29.4

25.5

+15%

80.2

84.8

-5%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

36.1

33.8

+7%

92.4

104.0

-11%

Note:       (1) Technological recovery, includes gold within work-in-progress inventory  

Quarterly gold production at Voro increased by 7% year-on-year to 36.1 Koz, driven by improved head grades and ore volumes processed at the CIP plant.

 

VARVARA

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

Varvara

 

 

 

 

 

 

Waste mined, Kt

4,866

8,051

-40%

14,320

22,471

-36%

Ore mined (open pit), Kt

701

1,014

-31%

1,937

2,546

-24%

-     float ore

15

21

-30%

44

118

-63%

-     leach ore

686

992

-31%

1,894

2,428

-22%

 

 

 

 

 

 

 

Komarovskoye2

 

 

 

 

 

 

Waste mined, Kt

1,109

-

NA

1,109

-

NA

Ore mined (open pit), Kt

65

-

NA

65

-

NA

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Flotation

 

 

 

 

 

 

Ore processed, Kt

1

234

-100%

355

311

+14%

Grade

 

 

 

 

 

 

Gold, g/t

3.6

1.2

+203%

1.3

1.1

+16%

Copper

0.29%

0.39%

-24%

0.33%

0.36%

-8%

Recovery1

 

 

 

 

 

 

Gold

93.1%

48.1%

+94%

70.4%

46.2%

+52%

Copper

72.8%

72.3%

+1%

72.6%

72.2%

+0%

Production

 

 

 

 

 

 

Gold (in concentrate), Koz

0.5

3.3

-87%

7.0

4.1

+71%

Copper (in concentrate), t

20

670

-97%

836

808

+4%

 

 

 

 

 

 

 

Leaching

 

 

 

 

 

 

Ore processed, Kt

731

594

+23%

1,954

2,265

-14%

Gold head grade, g/t

1.1

0.9

+28%

0.9

0.8

+5%

Gold recovery1

82.1%

76.8%

+7%

78.0%

78.1%

-0%

Gold production (in dore), Koz

21.0

13.7

+53%

45.8

50.0

-8%

 

 

 

 

 

 

 

Total ore processed, Kt

732

828

-12%

2,310

2,576

-10%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

21.4

17.1

+25%

52.8

54.1

-2%

Copper, t

20

670

-97%

836

808

+4%

Note:       (1) Technological recovery, includes gold and copper within work-in-progress inventory

                (2) Since the acquisition date (1 August 2016)

Quarterly Varvara gold production increased 25% year-on-year, mostly driven by improved grades and recovery levels at the leaching circuit.

Meanwhile, open-pit mining at Komarovskoye is ramping up with the first 30 Kt of ore railed to Varvara for processing. Grade levels and ore tonnage are expected to improve once mining catches up with the historic stripping backlog.

 

OKHOTSK OPERATIONS

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Khakanja

 

 

 

 

 

 

Waste mined, Kt

-

529

-100%

-

1,478

-100%

Ore mined (open-pit), Kt

-

104

-100%

-

180

-100%

 

 

 

 

 

 

 

Ozerny

 

 

 

 

 

 

Underground development, m

-

-

NA

-

42

-100%

Ore mined (underground), Kt

-

-

NA

-

105

-100%

 

 

 

 

 

 

 

Avlayakan

 

 

 

 

 

 

Underground development, m

1,107

985

+12%

3,438

2,990

+15%

Ore mined (underground), Kt

34

22

+49%

94

78

+21%

 

 

 

 

 

 

 

Svetloye

 

 

 

 

 

 

Waste mined, Kt

259

-

NA

764

-

NA

Ore mined (open pit), Kt

324

-

NA

976

-

NA

 

 

 

 

 

 

 

TOTAL HUB

 

 

 

 

 

 

Waste mined, Kt

259

-

NA

764

1,520

-50%

Ore mined, Kt

357

22

NM

1,070

363

+195%

    Open-pit

324

-

NA

976

285

+242%

    Underground

34

22

+49%

94

78

+21%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Khakanja

 

 

 

 

 

 

Ore processed, Kt

157

161

-3%

466

471

-1%

Grade

 

 

 

 

 

 

Gold, g/t

6.2

6.0

+5%

3.8

4.6

-18%

Silver, g/t

94

73

+28%

76

84

-10%

Recovery1

 

 

 

 

 

 

Gold

95.8%

94.9%

+1%

95.5%

94.9%

+1%

Silver

82.6%

75.7%

+9%

77.2%

70.0%

+10%

Gold production, Koz

29.2

28.9

+1%

53.2

66.2

-20%

Silver production, Moz

0.4

0.3

+32%

0.9

0.9

-2%

 

Svetloye Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

401

-

NA

401

-

NA

Gold head grade, g/t

3.7

-

NA

3.7

-

NA

Gold production, Koz

14.7

-

NA

14.7

-

NA

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

43.9

28.9

+52%

67.9

66.2

+2%

Silver, Moz

0.4

0.3

+32%

0.9

0.9

-2%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory (precipitate)

Gold and silver production at the Khakanja plant in Q3 2016 increased year-on-year by 1% and 32%, respectively. This is mainly due to higher-grade ore with better metallurgical properties shipped from the Avlayakan mine

At Svetloye, production commenced on 15 August 2016 and is fully in line with the accelerated commissioning schedule. The heap leaching facility is currently running at 100% of its design capacity with all key parameters in line with plan.

 

KAPAN

 

3 months ended Sep 30 (1),

% change

9 months ended Sep 30(1),

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

Kapan

 

 

 

 

 

 

Underground development, m

3,537

-

NA

5,938

-

NA

Ore mined (underground), Kt

112

-

NA

181

-

NA

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Ore processed, Kt

116

-

NA

180

-

NA

Grade

 

 

 

 

 

 

Gold, g/t

2.3

-

NA

2.3

-

NA

Silver, g/t

47

 

NA

46

 

NA

Copper, %

0.3%

-

NA

0.3%

-

NA

Zinc, %

1.6%

 

NA

1.6%

 

NA

Recovery

 

 

 

 

 

 

Gold

85.8%

-

NA

85.2%

-

NA

Silver

83.8%

 

NA

83.9%

 

NA

Copper

91.7%

-

NA

91.9%

-

NA

Zinc

91.4%

 

NA

91.3%

 

NA

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

6.5

-

NA

9.9

-

NA

Silver, Moz

0.1

-

NA

0.2

-

NA

Copper, kt

0.3

 

NA

0.4

 

NA

Zinc, kt

1.3

-

NA

2.0

-

NA

Note:       (1) Since the acquisition date (28 April 2016)

At Kapan, integration activities and modifications to operating practices are ongoing and include changes to the motivation system, productivity gap analysis, as well as targeted in-fill drilling. The best practices from other underground operations in Polymetal's portfolio are being implemented by teams comprising local and seconded employees.

In-fill and step-out drilling is underway at Lichkvaz, a satellite deposit that should provide additional tonnage to the existing concentrator.

 

KYZYL PROJECT

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2016

2015

2016

2015

MINING

 

 

 

 

 

 

 

 

 

 

 

 

 

Waste mined, Kt

7,521

-

NA

13,616

-

NA

Open-pit mining (pre-stripping) aimed at removing historic waste stockpiles and the drill-and-blast excavation of fresh rock is running at full capacity and according to plan. Polymetal has signed the updated the subsoil contract and the program of work with Ministry of Industrial Development, which is an important milestone that ensures full compliance with the licensing regime.

Construction activities focused on foundations and structural steel for the processing plant building are progressing on schedule.

HEALTH AND SAFETY

Polymetal regrets to report a fatal incident at the Svetloye mine on 8th October 2016 as a result of a road accident. We are deeply saddened over the loss of our colleague.

Safe operations remain a top priority for Polymetal. We are taking all possible steps to reduce the risk of injuries in our business and are making sure that we provide a safe operating environment for all our employees throughout the Group.  

PERSONNEL

Boris Balykov (39) has been appointed as the Managing Director at Voro.

Mr. Balykov has been with Polymetal since 2011, first joining as the deputy head of the Sopka open pit at Omolon. In January 2012, he moved to Kubaka as the deputy operations manager, and in October 2012 was promoted to operations manager.  Before joining Polymetal, Mr Balykov worked at the Sokolov-Sarbay iron ore mine where he started as an assistant to the excavator operator and then worked as the production department manager, deputy head of the production department and finally, working his way up to Deputy Director. Mr Balykov graduated from the Rudny Industrial Institute as a mining engineer, specializing in open-pit development of mineral deposits.

Mr. Andrey Novikov (45), the previous Managing Director of Voro will now lead the Urals regional management team directing and coordinating all Polymetal's activities in the area including the Voro and Varvara mines.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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