Polymetal cuts gold output 9%, ups silver 12% in 2015
MOSCOW. Jan 21 (Interfax) - Polymetal reduced gold production 9% to 861,000 oz in 2015 but raised silver production 12% to 32.2 million oz.
Gold equivalent production for the year, based on 1:60 Ag/Au conversion ratio, was 1.4 million oz, down 2% from 2014, and exceeded the original production guidance for 2015 of 1.35 million oz by 4%.
Given the persistent change in gold/silver market price ratio, Polymetal has decided to change the gold/silver ratio used in presenting gold equivalent (GE) production from 1/60 to 1/80. On that basis, Polymetal's production fell 3% to 1.27 million oz last year.
The company reconfirmed its production guidance for 2016 and 2017, which is 1.23 million oz of gold equivalent and for 2017 at 1.30 million oz of gold equivalent, after restatement of the gold/silver price ratio to 1/80.
Total cash cost guidance for 2016 remains unchanged at $525-575/GE oz and all-in sustaining cash costs of $700-750/GE oz, with an update to be provided along with the preliminary financial results release in March 2016
A further reduction of cash costs is expected from continuing devaluation of the Russian ruble and Kazakh tenge.
Polymetal's sales revenue fell 15% last year to $1.44 billion. Net debt grew 2% during Q4 and 4% during the full year to $1.298 billion.
Polymetal operating results:
| Q4 2015 | Q4 2014 | Change | 2015 | 2014 | Change | |
| Waste mined, mln tonnes | 15,3 | 17,7 | -13% | 65,3 | 77,5 | -16% |
| Underground development, km | 19 | 15,1 | +26% | 73,1 | 60,7 | +20% |
| Ore mined, mln t | 3,555 | 3,693 | -4% | 12,679 | 13,706 | -7% |
| - Open-pit | 2,772 | 2,973 | -7% | 9,626 | 11,046 | -13% |
| - Underground | 0,783 | 0,720 | +9% | 3,053 | 2,660 | +15% |
| Ore processed, mln tonnes | 2,532 | 2,771 | -9% | 10,821 | 11,300 | -4% |
| Production | ||||||
| - Gold, '000 oz | 219 | 299 | -27% | 861 | 945 | -9% |
| - silver, mln oz | 7,2 | 5,5 | +30% | 32,1 | 28,7 | +12% |
| - copper, tonnes | 20 | 0 | n/a | 827 | 1 631 | -49% |
| - Gold equivalent (1:80), '000 oz | 310 | 368 | -16% | 1 267 | 1 312 | -3% |
| - Gold equivalent (1:60), '000 oz | 340 | 391 | -13% | 1 401 | 1 431 | -2% |
| Sales | ||||||
| - Gold, '000 oz | 249 | 337 | -26% | 864 | 943 | -8% |
| - Silver, mln oz | 8,8 | 8,1 | +8% | 31,2 | 29,3 | +6% |
| - Copper, tonnes | 790 | 729 | +8% | 1 488 | 1 029 | +45% |
| Revenue, $ mln | 391 | 513 | -24% | 1 441 | 1 689 | -15% |
Polymetal, Russia's largest silver producer and one of the country's biggest gold miners, has operations in Magadan and Sverdlovsk regions, Khabarovsk Territory, Chukotka and Kazakhstan. The company is listed on the LSE and Moscow Exchange , with a free float of more than 50%. Polymetal's largest shareholders are Alexander Nesis's ICT Group with 21.29%, Petr Kellner's PPF Group with 17.85% and the family of Alexander Mamut with 10.04%.