30th Jul 2014 10:54
(An article published at 1017 BST included the wrong first half gold equivalent production figure due to an error in the company's statement. The correct version follows.)
LONDON (Alliance News) - Polymetal International PLC Wednesday said its revenues fell slightly in its second quarter as lower gold and copper sales volumes hit the company, but it now expects to beat its gold equivalent production guidance for the full year.
The gold, silver and copper-mining exploration and production company, with operations in Russia and Kazakhstan, said its revenues fell 2.5% during the three months ended June 30 to USD389 million from USD399 million during the previous year.
The company said its first half revenues were down 2.2% to USD724 million from USD740 million, as the company also saw a sales decrease in the first quarter compared to the previous year.
Polymetal said its gold equivalent production was up 4% to 335,000 ounces during the second quarter as higher gold and silver production due to strong performance at the company's Amursk POX site, as well as as improved grades and throughput at Dukat and Omolon mines, offset planned grade erosion at Varvara and Khakanja and a 45% fall in copper production.
It produced 652,000 ounces of gold equivalent in the first half, an increase of 17% and said that it now expects to exceed its full-year production guidance of 1.3 million ounces by roughly 5%.
The company said its gold sales volumes fell 6% to 181,000 ounces, and its copper sales volumes fell 88% to 300 tonnes during the period, but its silver sales volumes increased 52% to 7.9 million ounces.
Polymetal said it signed contracts with three off-takers in China for Mayskoye concentrate during the quarter on improved terms from 2013, with first shipments expected to take place in August.
The news comes after the company announced in May that it had agreed to acquire the major Kyzyl gold project in Kazakhstan for up to USD1.12 billion in cash and shares, a move which will increase its reserves by 50%.
Polymetal entered binding agreements with Sumeru Gold BV and Sumeru LLP for the acquisition of Altynalmas Gold Ltd, the holding company for the Kyzyl gold project.
The Kyzyl gold project is a highly prospective mining area including the Bakyrchik and Bolshevik gold deposits, which Polymetal said would increase its gold equivalent reserves by roughly 50% including a single high-grade region holding 6.7 million ounces of gold at 7.5 grams per tonne.
The company also said at the time that the Kyzyl Project offers further substantial potential of additions to existing reserves, through conversion of certain inferred resources and further exploration at adjacent properties which are covered by its exploration licences.
"Polymetal is consistently delivering robust operating performance", said Chief Executive Vitaly Nesis, commenting on the results. "We generate meaningful free cash flow at the current commodity prices and expect this trend to strengthen in the second half of the year, which should allow us to continue paying regular dividends, subject to Polymetal's stated dividend policy."
Polymetal shares were down 0.2% to 528.00 pence on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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