22nd Apr 2014 07:06
LONDON (Alliance News) - Polymetal International PLC Tuesday said revenue fell in its first quarter despite an increase in gold and silver production, as seasonal factors and lower copper production hit the company.
The gold, silver and copper-mining exploration and production company, with operations in Russia and Kazakhstan, said its revenues fell 2% during the three months ended March 31 to USD336 million from USD341 million in the same period the previous year.
The company said sales lagged behind improvements in production of gold equivalent by 46,000 ounces as a result of New Year holidays at its refineries, and it expects a reversal of this gap during the year ahead.
Polymetal said its gold production increased 57% to 191,000 ounces from 121,000 ounces, and its silver production increased 14% to 7.3 million ounces from 6.4 million ounces, leading to a 34% increase in gold equivalent production to 316,000 ounces from 235,000 ounces the previous year.
The company said its production increases occurred as its Amursk POX plant enabled the steady processing of concentrate and its Dukat hub and Omolon operations both increased their grades of ore.
Polymetal said it is fully on track to deliver its production guidance of 1.3 million ounces of gold equivalent in 2014.
The company also said it is currently in negotiations for the off-take of its Mayskoye concentrate, and it expects contracts to be signed during its second quarter.
However, Polymetal did note a 48% fall in copper production to 709 tonnes from 1,355 tonnes and that there was no copper sold during the period.
The company said two employees have died at its mines since January 1 and said that it has started a comprehensive safety review to identify the systemic root causes of the issue.
In March, the company said it swung to a net loss in 2013 as gold prices, impairments and cash costs hit the company.
The company previously announced that it exceeded its original annual production guidance and produced 1.28 million ounces of gold equivalent in 2013, a 21% increase on the previous year, driven by its successful ramp-up at Amursk POX and Mayskoye and strong operational delivery at its Dukat hub.
However, earlier in March, the company announced that its 2013 ore reserves decreased 12% to 13.3 million ounces of gold equivalent from 15.1 million ounces by the end of 2012, and its average ore reserve grade fell 7% to 3.7 grams per tonne of gold equivalent as a result of lower gold prices used in estimates.
At the open Tuesday, Polymetal shares were quoted down 1.2% at 606.00 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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