9th Oct 2020 09:52
(Alliance News) - Petropavlovsk PLC on Friday said it expects full year 2020 production to be below its previous guidance but assured that the impact on profitability will be less significant given the lower margins on third-party production processing.
The FTSE 250-listed Russian gold miner said it expects total production of between 560,000 to 600,000 ounces, down from previous forecasts of between 620,000 to 720,000 ounces, blaming the underperformance on lower than expected grades - primarily from third-party material - and logistical issues associated with Covid-19 impacting deliveries of third-party concentrates.
For comparison, gold production in 2019 was 517,300 ounces.
Gold production of Petropavlovsk own ore is expected to be between 395,000 and 415,000 ounces, down from previous guidance of 430,000 to 460,000 ounces as it saw lower grades from its Malomir mine and slower development of underground operations at the Andreevskaya zone at its Pioneer flotation plant.
It added it has decided to delay full commissioning of the Pioneer plant from the fourth quarter of 2020 until the second quarter of 2021 due to delays to the commissioning of some equipment items and a desire to avoid full commissioning during the winter months. It stated that it will continue to process stockpiles of lower grade non-refractory ore at the Pioneer RIP plant.
Total cash costs of the company's own production is expected to be between USD800 per ounce to USD850 per ounce versus previous guidance of between USD700 per ounce to USD800 per ounce as the company saw lower production and higher unit costs at the POX Hub due to lower throughput following the delay to the start-up of the Pioneer flotation plant.
Petropavlovsk expects to report annual capital expenditure of between USD90 million to USD100 million, up from previous forecasts of between USD70 million to USD80 million.
The stock was trading 3.8% lower at 31.45 pence each on Friday morning in London.
By Ife Taiwo; [email protected]
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