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Polymetal International plc (POLY)
Polymetal International plc: Q1 2019 Production results
18-Apr-2019 / 09:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Release time IMMEDIATE LSE, MOEX: POLY / ADR: AUCOY
Date 18 April 2019
Polymetal International plc
Q1 2019 production results
Polymetal International plc reports record production for the first quarter
ended 31 March 2019.
"Strong contribution from Kyzyl and steady operational results at other
mines drove a big jump in Q1 production", said Vitaly Nesis, Group CEO of
Polymetal. "Kyzyl's performance demonstrates both Polymetal's project
development capability and the asset's huge potential for cash flow
generation".
HIGHLIGHTS
? The Company's Q1 gold equivalent ("GE") production grew 27% year-on-year
to 374 Koz as Kyzyl exceeded design throughput and recovery and enjoyed
positive grade reconciliation. Meanwhile, a grade-driven increase in
production at Omolon offset the disposals of Okhotsk and Kapan. Gold
equivalent production from continuing operations was 369 Koz, up 37%
year-on-year.
? Q1 gold production was up 41% over the previous year at 302 Koz, while
silver production was down 15% due to the planned grade decline at the
Dukat underground mine. The share of gold production increased to 81% of
the Group's total output.
? Kyzyl continued to demonstrate an excellent operating performance in Q1
with flotation recoveries climbing up to 89% in March, while gold
production was 78 Koz with 92 Koz produced in concentrate.
? Revenues increased 28% year-on-year to US$ 454 million, largely driven
by a 41% uptick in gold sales compared to the prior year.
? Full-scale construction activities have commenced at both the Nezhda and
POX-2 projects which are expected to start up in Q4 2021 and H2 2023
respectively.
? The Company is on track to produce 1.55 Moz of GE in 2019 and reiterates
its full-year cost guidance: the TCC range of US$ 600-650/ GE oz while the
AISC range is US$ 800-850/ GE oz. The cost guidance remains contingent on
the Russian rouble and Kazakh tenge exchange rate dynamics, which has a
significant effect on the Group's operating costs.
? We are saddened to report a fatal accident that occurred on 8 March at
our Mayskoye operation. An underground development driller died following
injury from the rotating part of the rig. In response, the Company decided
to complete a comprehensive review of behavioural safety risks and
potential mitigation approaches.
? Net debt increased 12% during the quarter to US$ 1,704 million as at 31
March 2019, primarily due to seasonal advance purchases of diesel fuel and
other consumables. On the other hand, compared to 31 March 2018, the
relative leverage level has improved as 8% y-o-y increase in net debt was
outpaced by the growth of profitability metrics on the back of a 28%
increase in revenue. Free cash flow generation in 2019 will, as is usual
for Polymetal, be weighted towards the second half of the year on the back
of higher production volumes and seasonal working capital drawdowns.
? As previously announced, the final dividend for 2018 of US$ 0.31 per
share (approx. US$ 146 million) will be paid on 24 May 2019.
? The Company will host its annual Analyst and Investor Day on 24 April
2019 in London to provide an operating asset review and exploration
update.
3 months ended Mar 31, % change1
2019 2018
Waste mined, Mt 37.6 28.8 +30%
Underground 28.2 32.8 -14%
development, km
Ore mined, Mt 4.2 3.2 +32%
Open-pit 3.2 2.0 +57%
Underground 1.0 1.2 -12%
Ore processed, Mt 3.4 3.1 +13%
Production
Gold, Koz 302 214 +41%
Silver, Moz 5.1 6.0 -15%
Copper, Kt 0.9 0.7 +18%
Gold equivalent, 374 295 +27%
Koz2
Sales
Gold, Koz 291 206 +41%
Silver, Moz 4.7 4.8 -4%
Copper, Kt 0.4 0.3 +38%
Revenue, US$m3 454 354 +28%
Net debt, US$m4 1,704 1,518 +12%
Safety5
LTIFR 0.24 0.15 +60%
Fatalities 1 1 0%
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 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion
ratios.
(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 December 2018
(5) LTIFR = lost time injury frequency rate per 200,000 hours
worked.
PRODUCTION BY MINE
3 months ended Mar 31, %
change
2019 2018
GOLD EQ. (KOZ)1
Kyzyl 78 - NA
Dukat 78 79 -1%
Albazino-Amursk 81 90 -10%
Omolon 53 31 69%
Mayskoye 5 - NA
Varvara 38 35 8%
Voro 27 26 3%
Svetloye 9 8 10%
TOTAL (continuing 369 270 +37%
operations)
Okhotsk - 13 -100%
Kapan 52 12 -60%
TOTAL (including 374 295 +27%
discontinued
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
(2) Production up to asset disposal date on 30 January 2019
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Thursday, 18 April 2019
at 12:30 London time (14:30 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 95198051# (free from Russia), or
+44 203 009 24 83 (free from the UK), or
+1 646 722 49 12 (free from the US), or
follow the link: http://polymetal180419-live.audio-webcast.com. Please be
prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website
(www.polymetalinternational.com [1]) and at
http://polymetal180419-live.audio-webcast.com. A recording of the call will
be available immediately after the call at +44 20 3364 5147 (from within the
UK), +1 646 722 4969 (USA Toll Free) and +7 495 249 16 71 (from within
Russia), access code 418844238#, from 15:00 Moscow time Thursday, 18 April,
till 15:00 Moscow time Thursday, 25 April, 2019.
Enquiries
Media Investor Relations
FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000
Eugenia +44 20 7016 9505 (UK)
Leonid Fink Onuschenk
o
+7 812 334 3666 (Russia)
Viktor
Pomichal Timofey
Kulakov
Michael
Vasiliev
Joint Corporate Brokers
Morgan +44 20 7425 RBC +44 20 7653 4000
Stanley 8000 Europe
Limited
Andrew
Foster Marcus
Jackson
Richard
Brown Jamil
Miah
Panmure
Gordon +44 20 7886
2500
Charles
Lesser
James
Stearns
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
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