Polymetal International plc (POLY)
Polymetal: Q2 2019 production results
24-Jul-2019 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 24 July 2019
Polymetal International plc
Q2 2019 production results
Polymetal reports strong production for the second quarter and the six
months ended June 30, 2019.
"Excellent results from Kyzyl drove our production growth while other
operations delivered strong performances", said Vitaly Nesis, Group CEO of
Polymetal."
HIGHLIGHTS
? The Company's Q2 gold equivalent ("GE") production grew 19% year-on-year
to 384 Koz as Kyzyl delivered at full capacity with 81 Koz of gold
produced in the quarter. GE production from continuing operations was up
29% year-on-year.
? Q2 gold production was up 30% over the previous year at 302 Koz. Silver
production was down 11% at 6.0 Moz on the back of asset disposals.
? GE production for H1 2019 was 756 Koz, up 22% year-on-year. We expect
stronger production in 2H driven by seasonal concentrate de-stockpiling at
Mayskoye.
? Revenue for Q2 increased 13% year-on-year to US$ 492 million, with gold
sales rising 31% on strong production. Silver sales fell 22% due to a
temporary logistical lag between production and sales to be eliminated in
H2.
? The Company is well positioned to meet its full-year 2019 production
guidance of 1.55 Moz of GE and reiterates its cost guidance: TCC of US$
600-650/ GE oz and AISC of US$ 800-850/ GE oz1.
? Polymetal generated significant free cash flow in Q2. Net debt remained
unchanged during the quarter at US$ 1,700 million as of 30 June 2019,
while the Company paid US$ 146 million of final dividends for FY 2018 (US$
0.31 per share). As in previous years, we expect significantly stronger
free cash flow generation in the second half of the year on the back of
higher production volumes and seasonal working capital drawdown.
? We are saddened to report a fatal accident that occurred on 10 May 2019.
A pump station operator died at Omolon. The Company's risk management
activities increasingly focus on behavioral and cultural issues
underpinning unsafe labor practices. We remain committed to our strategic
objective of zero fatalities.
? At Nezhda, mining activities focused on constructing pit access roads.
Construction proceeded according to schedule with the concentrator
building comfortably on track for full winterization by the time the cold
season starts in November. The project is expected to start up in Q4 2021.
? At POX-2, detailed engineering of the facility is in full swing. All
long-lead equipment has been contracted. Site preparation activities
including deforestation and topsoil removal are in progress. The project
is on track for launch in H2 2023.
Note: (1) 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.
3 months ended % 6 months ended %
June 30, change1 June 30, change1
2019 2018 2019 2018
Waste 40.0 32.1 +25% 77.6 60.9 +27%
mined, Mt
Underground 26.1 31.8 -18% 54.3 64.4 -16%
development
, km
Ore mined, 4.3 3.4 +30% 8.6 6.5 +31%
Mt
Open-pit 3.3 2.2 +53% 6.5 4.2 +55%
Underground 1.0 1.2 -13% 2.1 2.4 -12%
Ore 4.1 3.7 +11% 7.6 7.0 +8%
processed,
Mt
Production
Gold, Koz 302 232 +30% 602 446 +35%
Silver, Moz 6.0 6.8 -11% 11.0 12.7 -14%
Copper, Kt 0.6 0.9 -38% 1.4 1.6 -13%
Gold 384 324 +19% 756 619 +22%
equivalent,
Koz2
Sales
Gold, Koz 314 239 +31% 604 445 +36%
Silver, Moz 5.6 7.3 -22% 10.3 12.1 -15%
Copper, Kt 0.7 1.2 -44% 1.0 1.5 -30%
Revenue, 492 435 +13% 946 789 +20%
US$m3
Net debt, 1,700 1,704 -0% 1,700 1,518 +12%
US$m4
Safety5
LTIFR 0.22 0.17 +29% 0.23 0.16 +44%
Fatalities 1 0 +1 2 1 +1
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, 2:1 Pb/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 March 2019 (for the three months period) and 31
December 2018 (for the six months period).
(5) LTIFR = lost time injury frequency rate per 200,000
hours worked.
PRODUCTION BY MINE
3 months % 6 months %
ended June 30, change ended June 30, change
2019 2018 2019 2018
GOLD EQ. (KOZ)1
Kyzyl 81 - NA 159 - NA
Dukat 82 76 9% 158 155 2%
Albazino-Amursk 55 63 -13% 136 153 -11%
Omolon 46 54 -16% 99 86 15%
Mayskoye - - NA 5 - NA
Varvara 39 31 24% 76 66 16%
Voro 29 28 3% 57 54 4%
Svetloye 52 45 16% 61 53 15%
TOTAL 384 297 +29% 751 568 +32%
(continuing
operations)
Okhotsk - 12 -100% - 24 -100%
Kapan - 15 -100% 5 27 -82%
TOTAL 384 324 +19% 756 619 +22%
(including
discontinued
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au
conversion ratios.
CONFERENCE CALL AND WEBCAST
Polymetal will hold a conference call and webcast on Wednesday, 24 July 2019
at 12:00 London time (14:00 Moscow time).
To participate in the call, please dial:
8 800 500 98 63 access code 34668237# (free from Russia), or
+44 203 009 24 80 (free from the UK), or
+1 646 722 49 14 (free from the US), or
follow the link: https://webcasts.eqs.com/polymetal20190724 [1]. Please be
prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website
(www.polymetalinternational.com [2]) and at
https://webcasts.eqs.com/polymetal20190724 [1]. 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 418860357#, from 14:30 Moscow time Wednesday, 24 July,
till 14:30 Moscow time Wednesday, 31 July, 2019.
Enquiries
Media Investor Relations
FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000
Eugenia +44 20 7887 1476 (UK)
Leonid Fink Onuschenk
o
Viktor
Pomichal Timofey
Kulakov
+7 812 334 3666 (Russia)
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
FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE
COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN
WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE
NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD
CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE
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