Polyus Gold plans to produce about 1.7 mln oz of gold in 2015 - CEO
MOSCOW. Dec 26 (Interfax) - Polyus Gold plans to produce about 1.7 million ounces of gold in 2015, about the same amount as this year, CEO Pavel Grachev said.
"It will be roughly in the neighborhood of current indicators for 2014, in the region of 1.7 million oz," he said.
The latest production forecast for 2014 is 1.68 million-1.72 million oz of gold. The company produced 1.65 million oz in 2013. Polyus Gold increased gold production by 4% year-on-year to 1.236 million oz in the first nine months of 2014.
Grachev said the company's budget for 2015 is based on a gold price forecast of $1,200 per oz, although he recalled that under the company's price protection program the average price is $1,375 per oz.
The strategy to support prices has two parts. Under the first, Polyus Gold entered into forward contracts to sell 310,000 oz of gold over two years at a price of $1,321 per oz. The second part is a series of options called zero cost Asian gold collars or revenue stabilizer. Polyus Gold benefits given a moderately optimistic scenario of development, selling gold to banks at a maximum price: $1,382 or $1,359 per oz, depending on the tranche, in the first three years of the program and $1,037 or $1,100 in the fourth year. In exchange, the miner gives counterparties the "cream" in the event of a significant price increase. Polyus Gold can sell up to 2.52 million oz of gold under the second part of the program.