Polymetal International plc (POLY)
Polymetal: Q4 and full year 2019 production results
23-Jan-2020 / 10:00 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 23 January 2020
Polymetal International plc
Q4 and full year 2019 production results
Polymetal International plc reports strong production results for the fourth
quarter and twelve months ended December 31, 2019.
"A strong Q4 allowed Polymetal to exceed both original and updated guidance
for the eighth year in a row. Robust production and positive gold price
dynamics drove strong free cash flow generation", said Vitaly Nesis, Group
CEO of Polymetal. "Stable operating performance should ensure steady and
significant dividend flow while planned progress with execution of Nezhda
and POX-2 projects will enable us to resume production growth in 2022".
HIGHLIGHTS
? The Company's FY2019 gold equivalent ("GE") production amounted to 1,614
Koz, an increase of 3% over 2018 and 4% above the original production
guidance of 1.55 Moz. A strong contribution from Kyzyl more than
compensated for disposals against the backdrop of stable results from the
rest of the portfolio. Production from continuing operations grew by 14%
year-on-year to 1,609 Koz GE.
? Safety performance in 2019 deteriorated both in terms of frequency of
lost-time injuries and the number of fatalities. Management expects the
Board to consider and approve significant safety-related changes to the
remuneration structure for all levels of the Company management together
with a comprehensive action plan focused on impacting the behavior and
attitudes of the employees. Our goal remains zero fatalities.
? Q4 GE output was 383 Koz, 15% below Q4 2018 production from continuing
operations, mainly as a result of limited throughput at the POX plant in
the reporting quarter due to scheduled downtime which was part of the
POX-2 project activities.
? Gold production for the full year was up 8% while silver output
contracted by 15% on the back of asset disposals and planned grade decline
at Dukat.
? Full-year revenue jumped by 19% to reach US$ 2.2 billion on the back of
higher volumes and metal prices. Q4 revenue increased by 1% to US$ 643
million as lower volumes were offset by increasing prices.
? The Company expects full-year costs to be close to the top of the range
of its cost guidance of US$ 600-650/GE oz for Total Cash Costs ("TCC") and
US$ 800-850/GE oz for All-in Sustaining Cash Costs ("AISC"). The main
factors driving this guidance are: stronger Rouble, higher royalties
driven by higher metal prices, and higher domestic diesel prices.
? In Q4, Polymetal generated strong free cash flow resulting in Net Debt
reduction to US$ 1.48 billion as at the end of 2019. The Company expects
Net Debt/EBITDA ratio to be lower than the target level of 1.5x.
2020 OUTLOOK
? The Company reiterates its current production guidance of 1.6 Moz of GE
for each of FY2020 and 2021.
? TCC in 2020 is expected to be in the range of US$ 650-700/GE oz while
AISC is expected to average US$ 850-900/GE oz. The expected increase over
2019 cost levels is driven by the current appreciation of the Russian
rouble and increased domestic diesel fuel price, as well as increased
royalties on the back of continued strong gold and silver price
performance. The guidance remains contingent on the Rouble/Dollar exchange
rate and Brent oil price.
? Capital expenditures in 2020 are expected to be approximately US$ 475
million. The US$ 50 million increase compared to the previous estimate is
driven by accelerated pre-stripping at Nezhda, several environmentally
driven investments, as well as stronger Rouble.
3 months ended % 12 months ended %
Dec 311, change2 Dec 311, change2
2019 2018 2019 2018
Waste 39.7 32.2 +23% 158.6 126.7 +25%
mined, Mt
Underground 25.6 33.2 -23% 105.8 130.0 -19%
development
, km
Ore mined, 4.2 3.8 +11% 17.2 14.0 +23%
Mt
Open-pit 3.1 2.6 +19% 13.0 9.3 +40%
Underground 1.1 1.1 -6% 4.2 4.7 -10%
Ore 3.5 3.7 -6% 15.0 15.2 -1%
processed,
Mt
Production
Gold, Koz 312 414 -25% 1,316 1,216 +8%
Silver, Moz 5.2 5.9 -11% 21.6 25.3 -15%
Copper, Kt 0.5 1.3 -66% 2.5 3.9 -37%
Gold 383 497 -23% 1,614 1,562 +3%
equivalent,
Koz3
Sales
Gold, Koz 374 432 -13% 1,366 1,198 +14%
Silver, Moz 5.7 8.3 -31% 22.1 25.7 -14%
Copper, Kt 0.8 1.4 -42% 2.8 3.3 -15%
Revenue, 643 634 +1% 2,245 1,882 +19%
US$m4
Net debt, 1,479 1,702 -13% 1,479 1,518 -3%
US$m5
Safety
LTIFR6 0.18 0 NA 0.19 0.09 +111%
Fatalities 0 0 NA 2 1 +100%
Notes: (1) Including discontinued operations.
(2) % 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.
(3) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1
Zn/Au conversion ratios.
(4) Calculated based on the unaudited consolidated
management accounts.
(5) Non-IFRS measure based on unaudited consolidated
management accounts. Comparative information is presented
for 30 September 2019 (for the three months period) and
31 December 2018 (for the twelve months period).
(6) LTIFR = lost time injury frequency rate per 200,000
hours worked.
PRODUCTION BY MINE
3 months % 12 months %
ended Dec 31, change ended Dec 31, change
2019 2018 2019 2018
GOLD EQ. (KOZ)1
Kyzyl 90 86 +4% 343 96 257%
Dukat 70 75 -7% 302 306 -1%
Albazino-Amursk 30 67 -55% 241 308 -22%
Omolon 57 58 -3% 205 195 5%
Varvara 35 39 -9% 149 142 5%
Mayskoye 52 70 -25% 129 117 10%
Svetloye 27 23 14% 134 136 -1%
Voro 22 29 -23% 107 107 -1%
TOTAL 383 448 -15% 1,609 1,407 +14%
(continuing
operations)
Okhotsk - 35 NA - 104 NA
Kapan - 13 NA 5 51 -90%
TOTAL 383 497 -23% 1,614 1,562 +3%
(including
discontinued
operations)
Notes: (1) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.
CONFERENCE CALL AND WEBCAST
The company will hold a conference call and webcast on Thursday, 23 January
2020 at 11:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 330 336 9411 (local access)
0800 279 7204 (toll free)
From the US:
+1 929 477 0324 (local access)
800 458 4121 (toll free)
From Russia:
+7 495 646 9190 (local access)
8 10 8002 867 5011 (toll free)
To participate from other countries, please dial any of the local access
numbers listed above.
Conference code: 9191693
To participate in the webcast follow the link:
https://webcasts.eqs.com/polymetal20200123. Please be prepared to introduce
yourself to the moderator or register.
A recording of the call will be available immediately after the call at +44
20 7660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 8002 702
1012 (from Russia), access code 9191693, from 17:30 Moscow time Thursday, 23
January, till 17:30 Moscow time Thursday, 30 January, 2020. Webcast replay
will be available on Polymetal's website (www.polymetalinternational.com
[1]) and at https://webcasts.eqs.com/polymetal20200123.
About Polymetal
Polymetal International (LSE, MOEX: POLY, ADR: AUCOY) (together with its
subsidiaries - "Polymetal", the "Company", or the "Group") is the top-20
global gold producer and top-5 global silver producer with assets in Russia
and Kazakhstan. The Company combines strong growth with a robust dividend
yield.
Enquiries
Media Investor Relations
FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000
Evgeny +44 20 7887 1475 (UK)
Leonid Fink Monakhov
Viktor Timofey
Pomichal Kulakov
+7 812 334 3666 (Russia)
Kirill
Kuznetsov
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
James
Stearns
Forward-looking statements
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2020 02:00 ET (07:00 GMT)
