BAKU, Azerbaijan, Jan. 29
By Nargiz Sadikhova - Trend:
The FY2020 gold equivalent (GE) output of Polymetal International plc, which is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan amounted to 1.55 million ounces, a 4 percent increase year-on-year and 4 percent above the original production guidance of 1.5 million ounces, Trend reports citing the company.
Strong contribution from Kyzyl, Varvara, and Albazino offset planned grade declines at Svetloye and Voro, the company said. 4Q2020 GE production was roughly stable year-on-year and stood at 358,000 ounces.
Revenue in 2020 jumped by 28 percent to reach $2.9 billion while Q4 revenue was up 31 percent year-on-year to $0.8 billion on the back of higher gold sales and higher metal prices. The lag between gold production and sales has been closed.
The Company expects full-year Total Cash Costs (TCC) to be below the original guidance of $650-700 per GE ounce.
“Sharp devaluation of domestic currencies (RUR and KZT) outweighed additional COVID-related costs and price-driven increase in royalties. All-in Sustaining Cash Costs (AISC) are expected to be within the guidance range of $850-900 per GE ounce as the Company has accelerated pre-stripping and mine fleet renewals against the backdrop of higher commodity prices,” the report said.
Polymetal generated strong quarterly free cash flow resulting in a Net Debt reduction to $1.35 billion as, at the end of 2020, Net Debt/EBITDA is expected to be below 1x. For the full year, Net Debt decreased by $128 million and the Company paid $480 million of dividends implying a record annual FCF.
“Construction and development activities at Nezhda and POX-2 progressed on schedule despite significant challenges posed by COVID-related disruptions and slowdowns. At Nezhda, the processing plant building was completed and most of the key equipment installed. Ore mining is ongoing. At POX-2, the autoclave building framework, concentrate storage facility, and the majority of concrete work for desorption/electrolysis building and oxygen station were completed,” the company said.
In 2020, the Board approved construction of the Voro flotation plant (start-up in 1Q2023) and Kutyn heap leach project, a part of Albazino operations (start-up in 2Q2023).
CAPEX for the full year is expected to amount to approximately 10 percent higher than guidance at $590 million. The increase is mostly related to:
- Accelerated spending across project portfolio in a bid to neutralize the impact of the pandemic on project schedules and
- Substantial increase in capitalized stripping aimed at ensuring operational flexibility and production stability against the backdrop of heightened epidemiological risks.
---
Follow the author on Twitter: @nargiz_sadikh