24 Jan 2018 13:05

Polymetal boosts 2017 output 13% to 1.14 mln oz GE, just above guidance

MOSCOW. Jan 24 (Interfax) - Polymetal produced 1.433 million ounces of gold equivalent (GE) in 2017, 13% more than in 2016, the miner said in a statement.

This was 2% above the company's own guidance for the year, which was 1.4 million oz.

"The strong finish to 2017 was driven by contributions from the fully ramped-up Svetloye heap leach (Okhotsk hub), as well as a strong performance at Komar (Varvara hub), Omolon and Amursk-Albazino," Polymetal said.

Production in Q4 2017 rose 8% year-on-year to 405,000 oz.

Polymetal affirmed production guidance of 1.55 million oz for 2018 and 1.7 million oz for 2019.

It said net debt fell $178 million during Q4 2017 to $1.421 billion "as free cash flows benefited from the traditional seasonal de-stockpiling at a number of operations."

Polymetal revised up its 2017 total cash costs (TCC). The company expects that based on the actual 2017 average exchange rate of 58.3 rubles per dollar, TCC will be in the range of $650-675/GE ounce, as opposed to initial guidance of $600-650/GE ounce based on an exchange rate of 60 rubles to the dollar. The increase in TCC was driven by rising domestic diesel fuel prices and the strengthening of the ruble on the back of the recent oil price rally. All-in sustaining cash costs (AISC) are expected to be in the range of $850-900/GE ounce, compared to initial guidance of $775-825/GE ounce.

TCC in 2018 are expected to be in the range of $650-700/GE ounce while AISC are expected to average $875-925/GE ounces. The anticipated increase in costs is due to rising domestic diesel prices and expected strengthening of the ruble. Cost guidance remains contingent on the ruble/dollar exchange rate dynamic that has a significant effect on the group's operating costs.