22nd Oct 2014 07:08
LONDON (Alliance News) - Petropavlovsk PLC Wednesday said its on track to meet is gold production guidance for 2014, after output 2% rose in the third quarter compared with the previous quarter, while it now expects total cash costs for the year to fall thanks to cost cutting and the devaluation of the Russian rouble.
The Russian gold miner said it produced 150,100 ounces in the third quarter of this year, meaning its on track to hit its 625,000 ounce target for 2014 as a whole. It said it realised an average gold price of USD1,329 an ounce in the quarter, with hedging it had done contributing USD59 an ounce.
Its gold production and sales for the first nine months of the year stand at 456,500 onces and 460,900 ounces, respectively, lower than the corresponding period in 2013 after it sold its high-cost alluvial operations in the Magadan region.
It now expects cash costs for the year to be below USD900 an ounce, right at the bottom end of its previous USD900 to USD950 an ounce guidance.
Petropavlovsk's net debt stood at about USD902 million at the end of September, down by about USD46 million since the end of 2013. It said it remains on track to reduce further its net debt by the end of this year. Its cash balance was about USD80 million at the end of September 2014.
The miner is currently talking with its lenders and bondholders about a debt refinancing. It said Wednesday it is continuing detailed talks with senior lenders, bondholders, other stakeholders and third-parties with regards to refinancing the outstanding 4% convertible bonds due February 2015.
The latest production figures come a day after the company rubber stamped the re-appointment of Pavel Maslovskiy as chief executive. He will re-take the helm from November 5, leading the refinancing talks, after he retired as a Member of the Federation Council, Russia's upper house of parliament.
Maslovskiy and Chairman Peter Hambro founded Petropavlovsk in 1994.
Petropavlovsk shares were up 9.8% at 25.25 pence early Wednesday.
By Steve McGrath; [email protected]; @stevemcgrath1
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