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Polymetal International plc

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DGAP-UK-Regulatory News vom 27.07.2021

Polymetal: Q2 2021 production results

Polymetal International plc (POLY)
27-Jul-2021 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

 

 

Release time

 

IMMEDIATE                                                          LSE, MOEX, AIX: POLY / ADR: AUCOY

Date

27 July 2021

 

Polymetal International plc

Q2 2021 production results

 

Polymetal reports solid production results for the second quarter and the six months ended June 30, 2021.

 

"In Q2, Polymetal delivered steady results. All producing mines made budget targets while mechanical completion and start of commissioning at Nezhda represented a key development milestone", said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

  • There were no fatal accidents during the first half of the year (consistent with H1 2020) among Polymetal's workforce and the Company's contractors. Unfortunately, on July 18 a drilling contractor lost his life at the Saum open-pit mine, part of Voro operations. We send our condolences to the family and friends of our colleague.
  • The Company's Q2 gold equivalent ("GE") production decreased by 6% y-o-y to 339 Koz due to the planned grade declines at Kyzyl and Albazino. GE output for H1 was 714 Koz, a 1% decrease y-o-y.
  • Russia and Kazakhstan have entered the third wave of the COVID pandemic with record numbers of infections and deaths from the virus. At Polymetal, the epidemiological situation remains well controlled with less than fifty presently active cases, none at operating sites. COVID-related transportation restrictions have led to a material increase of Kyzyl concentrate in storage and transit to China and prompted the management to accelerate seasonal summer purchasing campaign across the portfolio. These factors drove a significant increase in working capital levels, which should normalise by the year-end.
  • Revenue for the quarter was up 6% y-o-y and reached US$ 681 million on the back of higher metal prices. H1 revenue increased by 12% y-o-y to US$ 1,274 million. Net debt increased by US$ 0.5 billion for the quarter to US$ 1.83 billion due to record final dividend payment of US$ 0.4 billion and working capital build-up.
  • Construction and development activities at Nezhda and POX-2 projects progressed on schedule amid continued tightness in the construction contractor market and COVID-related cross-border travel restrictions. Nezhda achieved mechanical completion of the key equipment. The project is on track to produce first concentrate in early November in line with the schedule.
  • Following the latest review by Vigeo Eris, a global leader in ESG assessments, data, research and analytics, Polymetal's ESG overall score improved to 69 (out of 100), corresponding to the Advanced level of performance and placing Polymetal on the 2nd place among 43 industry peers[1].
  • Polymetal confirms its 2021 production guidance of 1.5 Moz of GE and maintains the full-year cost guidance of US$ 700-750/GE oz for TCC and US$ 925-975/GE oz for AISC. The cost guidance remains contingent on the Russian rouble and Kazakh tenge exchange rate dynamics. The Company notes the continuous macro and COVID-related pressures affecting its capital expenditures. The Company continues to prioritize timely project execution and to incur additional costs to avoid project schedule slippage.
 
  •  

OPERATING HIGHLIGHTS

 

 

3 months ended June 30,

% change1

6 months ended June 30,

% change1

 

2021

2020

2021

2020

 

 

 

 

 

 

 

Waste mined, Mt

52.5

39.2

+34%

98.0

79.1

+24%

Underground development, km

23.3

23.2

+0%

46.3

46.4

-0%

Ore mined, Mt

3.8

4.1

-8%

7.5

8.0

-6%

Open-pit

2.8

3.0

-7%

5.6

5.9

-6%

Underground

0.9

1.0

-9%

1.9

2.0

-5%

Ore processed, Mt

4.0

4.3

-7%

7.6

7.8

-3%

Average GE grade processed, g/t

3.5

3.8

-9%

3.6

4.0

-9%

Production

 

 

 

 

 

 

Gold, Koz

299

318

-6%

635

642

-1%

Silver, Moz

4.8

4.9

-1%

9.4

9.8

-4%

Gold equivalent, Koz2

339

358

-6%

714

723

-1%

Sales

 

 

 

 

 

 

Gold, Koz

315

324

-3%

595

595

+0%

Silver, Moz

4.3

5.2

-18%

8.0

9.9

-19%

Revenue, US$m3

681

641

+6%

1,274

1,135

+12%

Net debt, US$m4

1,827

1,321

+38%

1,827

1,351

+35%

 

 

 

 

 

 

 

LTIFR5

0.10

0.08

+25%

0.17

0.07

+143%

Fatalities

0

0

NA

0

0

NA

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 120:1 Au/Ag conversion ratio and excluding base metals.  Comparative data for 2020 restated accordingly.

(3) Calculated based on the unaudited consolidated management accounts.

(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 31 March 2021 (for the three months period) and 31 December 2020 (for the six months period).

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

PRODUCTION BY MINE

 

3 months ended June 30,

%

change

6 months ended June 30,

%

change

 

2021

2020

2021

2020

 

 

 

 

 

 

 

GOLD EQ. (KOZ)1

 

 

 

 

 

 

Kyzyl

93

104

-10%

182

213

-14%

Varvara

51

41

+23%

110

84

+31%

Dukat

50

52

-3%

98

104

-5%

Omolon

50

46

+9%

96

88

+10%

Albazino

46

62

-26%

123

140

-12%

Svetloye

26

31

-15%

53

52

+2%

Voro

18

22

-17%

40

42

-5%

Mayskoye

4

1

NM

10

1

NM

TOTAL

339

358

-6%

714

723

-1%

Notes: (1) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.

CONFERENCE CALL AND WEBCAST

The Company will hold a conference call and webcast on Tuesday, 27 July 2021 at 12:00 London time (14:00 Moscow time).

To participate in the call, please dial:

From the UK:

+44 203 984 9844 (local access)

+44 800 011 9129 (toll free)

From the US:

+1 718 866 4614 (local access)

+1 888 686 3653 (toll free)

From Russia:

+7 495 283 9858 (local access)

To participate from other countries, please dial any of the local access numbers listed above.

Conference code: 785872

To participate in the webcast follow the link: https://mm.closir.com/slides?id=785872.

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

A recording of the call will be available at the same numbers and webcast link listed above within an hour after the call and until 3 August 2021.

About Polymetal 

Polymetal International plc (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan. The Company combines strong growth with a robust dividend yield.

Enquiries

Media

 

Investor Relations

FTI Consulting

Leonid Fink

Viktor Pomichal

+44 20 3727 1000

Polymetal

Evgeny Monakhov

Timofey Kulakov

Kirill Kuznetsov

[email protected]

+44 20 7887 1475 (UK)

 

+7 812 334 3666 (Russia)

Joint Corporate Brokers

 

Morgan Stanley & Co. International plc

Andrew Foster

Richard Brown


Panmure Gordon

John Prior

Rupert Dearden

+44 20 7425 8000

 

 

 

 

+44 20 7886 2500

RBC Europe Limited

Marcus Jackson

Jamil Miah

+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.

 

 

KYZYL

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

20.6

18.8

+10%

40.9

38.0

+7%

Ore mined (open-pit), Kt

542

518

+5%

1,098

1,041

+5%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Ore processed, Kt

569

481

+18%

1,133

1,006

+13%

Gold grade, g/t

6.5

8.5

-24%

6.2

8.3

-25%

Gold recovery

89.9%

87.2%

+3%

89.4%

87.2%

+2%

Concentrate produced, Kt

34.2

37.3

-8%

69.3

73.0

-5%

Concentrate gold grade, g/t

97.0

97.4

-0%

90.9

99.3

-8%

Gold in concentrate, Koz1

107

117

-9%

202

233

-13%

 

 

 

 

 

 

 

Concentrate shipped, Kt

21.4

26.4

-19%

48.4

47.3

+2%

Payable gold shipped, Koz

40

51

-21%

86

92

-6%

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

13

13

+1%

25

29

-13%

Gold grade, g/t

130.8

149.2

-12%

133.9

141.8

-6%

Gold recovery

90.2%

91.8%

-2%

91.3%

91.8%

-1%

Gold produced, Koz

53

54

-0%

96

121

-20%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

93

104

-10%

182

213

-14%

Note:  (1) For information only; not considered as gold produced and therefore not reflected in the table representing total production. It will be included in total production upon shipment to off-taker or dore production at Amursk POX.

(2) To be further processed at Amursk POX.

In Q2, the Kyzyl concentrator set a quarterly throughput record (second in a row) and also achieved the record recovery following full commissioning of the expanded dewatering section. Grade processed, as expected, declined y-o-y towards the open-pit reserve average. The planned grade decline will continue to impact production at Kyzyl throughout 2021 and will be only partially offset by higher throughput and improved recoveries.

A 10% increase in open-pit rock moved was achieved without new equipment thanks to productivity improvements driven by reduction in truck and excavator downtime.

Delivery of Kyzyl concentrate to Сhina was disrupted given the anti-COVID precautionary measures at seaports and railway crossings which have resulted in substantial rail car and ship deficit as well as lengthening round-trip times. Polymetal is switching from bulk (boxcar) to container shipping to accelerate cycle times and expects the sales/production gap to close by year-end. 


ALBAZINO

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

5.6

5.1

+10%

10.7

9.9

+8%

Underground development, km

3.9

3.1

+24%

7.1

6.2

+15%

Ore mined, Kt

455

464

-2%

949

981

-3%

Open-pit

268

295

-9%

576

655

-12%

Underground

187

169

+11%

373

325

+15%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Albazino concentrator

 

 

 

 

 

 

Ore processed, Kt

444

446

-0%

871

891

-2%

Gold grade, g/t

4.0

4.8

-16%

4.1

4.6

-11%

Gold recovery1

88.4%

86.5%

+2%

88.6%

86.0%

+3%

Concentrate produced, Kt

33.7

36.8

-8%

66.5

72.7

-9%

Concentrate gold grade, g/t

46.7

50.0

-7%

48.1

49.1

-2%

Gold in concentrate, Koz2

51

59

-14%

103

115

-10%

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

34

40

-15%

82

86

-4%

Gold grade, g/t

47.1

51.6

-9%

50.4

52.6

-4%

Gold recovery

96.3%

96.5%

-0%

96.4%

96.5%

-0%

Gold produced, Koz

46

62

-26%

123

139

-12%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

46

62

-26%

123

139

-12%

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 after Dore production at the Amursk POX.

In H1, Albazino recorded a 12% decrease in production as the Anfisa high-grade open pit is nearing full depletion. The ramp-up of stoping at the Ekaterina-2 underground mine only partially compensates for this development. The new open pit, Farida, with lower grades, drove a 10% increase in waste volumes.

Recovery at the concentrator improved by 2 p.p. and 3 p.p. in Q2 and H1 2021 respectively as feedstock mix shifted to ores from deeper underground levels.

Construction at the Kutyn heap leach project is in full swing with final construction permits in place and contractors fully mobilized on site.

 

MAYSKOYE

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

1.0

0.6

+63%

2.0

1.7

+16%

Underground development, km

4.7

5.5

-14%

9.8

11.0

-11%

Ore mined, Kt

197

306

-36%

388

567

-32%

Open-pit

38

108

-64%

51

186

-73%

Underground

158

197

-20%

336

380

-12%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Ore processed, Kt

218

230

-5%

435

458

-5%

Gold grade, g/t

5.7

6.7

-15%

6.0

6.2

-4%

Gold recovery

92.0%

84.4%

+9%

92.3%

87.5%

+5%

Gold in concentrate, Koz2

37

37

-1%

77

76

+2%

 

 

 

 

 

 

 

Gold produced in dore from concentrate (POX), Koz

4

-

NM

5

-

NM

Gold produced in dore from carbon, Koz3

-

1

NM

5

1

NM

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

4

1

NM

10

1

NM

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 dore production at Amursk POX.

(3) Gold produced from carbon at Amursk POX.

At Mayskoye, in Q2 2021 the plant only processed sulphide ore while in Q2 2020 oxidised material from the open pit was also part of the feed. Thus, the grades and recoveries are not comparable y-o-y. The Company started processing oxidised ore in July 2021.

Underground mine electrification project is running on schedule. Conveyor installation has commenced with first ore deliveries to the surface expected in Q2 2022.

 

AMURSK POX

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

Concentrate processed, Kt

50

53

-7%

110

115

-4%

    Albazino

33

38

-14%

77

79

-2%

    Kyzyl

13

13

+1%

25

29

-13%

    Mayskoye

2

-

NA

3

-

NA

    Veduga

-

1

-100%

4

3

+38%

    Other1

1

0

NA

1

3

-73%

Gold recovery

93.0%

94.2%

-1%

94.0%

94.2%

-0%

Average gold grade, g/t

69.8

75.6

-8%

69.7

75.2

-7%

Average sulphur grade

14.1%

13.5%

+4%

13.8%

13.9%

-1%

Total gold produced2, Koz

103

116

-11%

224

261

-14%

    Albazino

45

51

-13%

112

111

+1%

    Kyzyl

53

54

-0%

96

121

-20%

    Mayskoye

4

-

NA

5

0

NA

    Veduga

-

4

-100%

9

19

-49%

    Other1

1

6

-86%

1

10

-91%

Notes: (1) Purchased concentrates which are included in reportable production in the Albazino segment.

           (2) For information only. Already accounted for in production at operating mines.

POX quarterly output was down due to lower production from Albazino concentrate and a 1 p.p. decrease in POX recovery on the back of the increased share of more metallurgically challenging material from Kyzyl.

A planned three-week autoclave maintenance shutdown in April went smoothly and identified no material issues.

 

VARVARA

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

10.0

10.1

-1%

19.5

20.3

-4%

Ore mined, Kt

850

702

+21%

1,906

1,484

+28%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Leaching

 

 

 

 

 

 

Ore processed, Kt

794

796

-0%

1,558

1,530

+2%

Gold grade, g/t

1.7

1.5

+11%

1.7

1.5

+12%

Gold recovery1

89.9%

89.1%

+1%

88.2%

88.1%

+0%

Gold production (in dore), Koz

38

32

+19%

84.4

66.8

+26%

 

 

 

 

 

 

 

Flotation

 

 

 

 

 

 

Ore processed, Kt

185

188

-1%

375

317

+19%

Gold grade, g/t

2.8

2.6

+9%

2.7

2.8

-4%

Recovery1

83.9%

87.2%

-4%

84.3%

86.5%

-3%

Gold in concentrate, Koz

12

9

+41%

26

18

+47%

 

 

 

 

 

 

 

Total ore processed, Kt

979

984

-0%

1,933

1,876

+3%

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

51

41

+23%

110

84

+31%

Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore.

(2) To be further processed at Amursk POX.

Q2 gold production at Varvara was up 23% y-o-y driven by higher grade leach ore from Komar and grade increase in third-party material at flotation circuit. Gold recovery from low copper grade ore improved to 89.9% after leaching circuit expansion increased residence time.

 

DUKAT OPERATIONS

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

0.7

-

NA

1.1

-

NA

Underground development, km

11.1

10.9

+1%

22.8

22.2

+3%

Ore mined, Kt

638

545

+17%

1,283

1,084

+18%

    Open-pit

119

-

NA

223

-

NA

    Underground

518

545

-5%

1,060

1,084

-2%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Omsukchan concentrator

 

 

 

 

 

 

Ore processed, Kt

508

496

+3%

1,021

1,009

+1%

Grade

 

 

 

 

 

 

Gold, g/t

0.6

0.6

-6%

0.5

0.5

-3%

Silver, g/t

257

273

-6%

255

280

-9%

Recovery1

 

 

 

 

 

 

Gold

87.1%

85.1%

+2%

85.3%

84.8%

+1%

Silver

87.6%

87.4%

+0%

87.2%

86.6%

+1%

Production

 

 

 

 

 

 

Gold, Koz

8

8

-1%

14

14

-0%

Silver, Moz

3.6

3.7

-4%

7.1

7.7

-7%

 

 

 

 

 

 

 

Lunnoye plant

 

 

 

 

 

 

Ore processed, Kt

122

116

+5%

237

232

+2%

Grade

 

 

 

 

 

 

Gold, g/t

1.6

1.4

+15%

1.6

1.5

+7%

Silver, g/t

219

278

-21%

235

273

-14%

Recovery1

 

 

 

 

 

 

Gold

90.0%

91.8%

-2%

90.8%

91.2%

-0%

Silver

93.2%

92.8%

+0%

92.6%

92.1%

+1%

Production

 

 

 

 

 

 

Gold, Koz

6

5

+17%

11

10

+9%

Silver, Moz

0.8

1.0

-17%

1.6

1.9

-12%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

13

13

+6%

25

24

+3%

Silver, Moz

4.4

4.7

-6%

8.8

9.5

-8%

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

Dukat continues to experience planned grade decline, which resulted in a y-o-y production decrease. Ore mined was higher y-o-y as open-pit mining recommenced in Q1.

Primorskoye satellite underground mine produced first ore from development with first deliveries of high-grade direct shipment material to third-party smelters expected in Q3.

 

 


OMOLON OPERATIONS

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

1.3

1.1

+13%

1.6

2.0

-23%

Underground development, Km

3.0

3.7

-19%

5.7

7.0

-19%

Ore mined, Kt

113

763

-85%

186

1,564

-88%

    Open-pit

34

642

-95%

34

1,331

-97%

    Underground

78

121

-35%

151

234

-35%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Kubaka Mill

 

 

 

 

 

 

Ore processed, Kt

217

220

-1%

429

433

-1%

Grade

 

 

 

 

 

 

Gold, g/t

6.5

6.6

-1%

6.7

6.7

-1%

Silver, g/t

64

26

+150%

44

20

+122%

Recovery1

 

 

 

 

 

 

Gold

95.0%

94.3%

+1%

93.9%

93.2%

+1%

Silver

81.0%

69.5%

+17%

79.5%

74.3%

+7%

Gold production, Koz

43

41

+6%

88

83

+7%

Silver production, Moz

0.3

0.1

+177%

0.5

0.2

+144%

 

 

 

 

 

 

 

Birkachan Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

308

707

-56%

353

707

-50%

Gold grade, g/t

1.3

2.3

-44%

1.2

2.3

-45%

Gold production, Koz

4

3

+7%

4

3

+24%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

47

45

+6%

93

86

+8%

Silver, Moz

0.3

0.1

+171%

0.5

0.2

+141%

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

In Q2, the Merrill-Crowe circuit at Kubaka plant was re-launched after a shut-down in 2020 as sufficient volumes of high silver grade material became available.

Grade at Birkachan heap leach decreased due to the higher base in 2020 when higher-grade stockpiled ore was processed. Stacking was lower with the crusher focused on re-handling of previously stacked ore.

Ore mining was down as Olcha open pit and underground mines as well as Birkachan open pit have been depleted. A new open pit mine at Burgali, 110 km from the processing plant, produced first ore.

The commissioning of the 2.5 MWh solar power plant commenced in July. The dry tailings storage facility achieved mechanical completion and is on track to enter production by the end of 2021.

 

SVETLOYE

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

1.1

0.9

+22%

1.8

1.6

+9%

Ore mined (open pit), Kt

536

561

-4%

926

907

+2%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Ore stacked, Kt

366

317

+16%

648

626

+4%

Gold grade, g/t

2.8

3.7

-24%

3.7

4.0

-9%

Gold production, Koz

26

31

-15%

53

52

+2%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

26

31

-15%

53

52

+2%

Quarterly gold production at Svetloye contracted y-o-y on the back of the planned decline in grade. Stacking increase is attributable to the low base of Q2 2020 when stacking volumes were impacted by maintenance shutdown of the ore crushing complex.

Waste mined jumped as mining started at the new Lyudmila pit.

VORO

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

3.0

-

NA

3.6

-

NA

Ore mined, Kt

57

-

NA

68

-

NA

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

CIP

 

 

 

 

 

 

Ore processed, Kt

262

260

+1%

522

529

-1%

Gold grade, g/t

1.9

2.2

-17%

2.0

2.2

-8%

Gold recovery1

84.6%

82.5%

+3%

84.2%

82.3%

+2%

Gold production, Koz

16

18

-11%

36

36

-0%

 

 

 

 

 

 

 

Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

-

22

-100%

 -

22

-100%

Gold grade, g/t

-

0.9

-100%

 -

0.9

-100%

Gold production, Koz

2

4

-53%

4

6

-38%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

18

22

-18%

40

42

-6%

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

Gold production at Voro continued to drift lower as the plant processed predominantly low-grade historical stockpiles. Recovery for the reporting quarter and H1 improved by 3 p.p. and 2 p.p. y-o-y respectively as oxidized ore from Saum was introduced to the feed.

At the Voro flotation plant, the foundations for equipment and steel framework for the concentrator building were completed. SAG and ball mills have been installed. The project is 50% completed.

 

NEZHDA

 

3 months ended June 30,

% change

6 months ended June 30,

% change

 

2021

2020

2021

2020

MINING

 

 

 

 

 

 

Waste mined, Mt

5.6

-

NA

11.0

-

NA

Ore mined, Kt

365

-

NA

710

-

NA

Construction and mining activities proceeded on schedule. Mechanical completion of key equipment, including SAG and ball mills, was achieved. Cold commissioning of individual equipment items is in progress with multiple representatives of international suppliers on site.

Construction of the dry-stack tailings storage facility is nearing completion. The project is on track to produce first concentrate on November 1, 2021.

POX-2

Construction progressed on schedule. In Q2, the large-sized equipment of oxygen station was installed. Equipment foundation construction at the POX building is being finalized. Downstream circuit metal framework construction was completed.

The Suez straits crisis lead to multiple delays in shipment of key equipment from Europe. The management is evaluating alternative options of ensuring the timely arrival of items on the critical path, including booking single-cargo vessels at increased cost.

SUSTAINABILITY, HEALTH AND SAFETY

There were no fatal accidents during the first half of the year (consistent with H1 2020) among Polymetal's workforce and the Company's contractors. We regret to report that on July 18 a drilling contractor lost his life at the Saum open-pit mine, part of Voro operations. We send our condolences to the family and friends of our colleague. The incident is currently under investigation to understand the root cause of the accident to prevent any recurrence.

LTIFR among the Group's employees in Q2 2021 stood at 0.10, in comparison with 0.08 in Q2 2020, while for the first half of 2021 LTIFR was 0.17 vs 0.07 a year earlier. There were three incidents among employees during the quarter and no incidents with contractor workers. During H1 2021, there were ten lost-time injuries in total vs four cases during H1 2020.

In Q2, Vigeo Eiris (part of Moody's ESG solutions), a global leader in ESG assessments, data, research and analytics, raised Polymetal's overall ESG score from 48 to 69 (out of 100) which corresponds with the Advanced level, the highest on the company's ranking scale. The new score places Polymetal on the second place out of 43 in the Mining & Metals sector and 22nd place in the global ranking universe (4,939 companies). For more information visit vigeo-eiris.com.

The reporting quarter was also marked with a couple of other external recognitions, which confirms our success as a responsible company: Polymetal took the 7th place in Russia's 30 most eco-friendly companies rating and the 2nd place among metals and mining companies in Russia by Forbes.

COVID-19 UPDATE

Epidemiological situation in the Company remains under control. Number of active cases increased q-o-q as Russia and Kazakhstan entered the third wave of the pandemic. As of the date of this press release, there are less than 50 active cases of the disease in Polymetal, none of which observed at production sites. Operations and development projects continue undisrupted. All precautionary measures, including extensive testing and observatory periods, are maintained at all sites.

Multiple regions introduced requirements for mandatory vaccination within certain industries (hospitality, transportation services). Continuously operating industries (including mining) are currently not targeted. Polymetal continues to facilitate non-obligatory vaccination among employees by organizing vaccination at local hospitals or establishing vaccination points on site.

The Company estimates COVID-related cash expenses at approximately US$ 5 million per month with the majority recorded as operating costs. This translates into roughly US$ 35 per GE ounce in AISC.

 

 


[1] For more information visit vigeo-eiris.com.




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