31st Mar 2014 07:51
LONDON (Alliance News) - Polymetal International PLC Monday said it swung to a net loss in 2013 as gold prices, impairments and cash costs hit the company.
The gold, silver and copper-mining exploration and production company, with operations in Russia and Kazakhstan, posted a net loss of USD198 million in 2013, versus a net profit of USD428 million in 2012, as revenues fell 8% to USD1.71 billion from USD1.85 billion.
Polymetal announced in January that it expected the revenue fall as its full-year sales volumes for gold increased 38% to 818,000 ounces but volumes for silver fell 2% to 27.4 million tonnes, and its volumes for copper fell 8% to 6,165 tonnes.
On Monday, the company said its revenues also fell as a result of lower key metal prices during the period, including a 19% fall in the average realised gold price to USD1,326 per ounce from USD1,640 per ounce and a 28% fall in the average realised silver price to USD21.6 per ounce from USD30.0 per ounce.
Polymetal noted that its total cash costs increased 8% to USD745 per gold equivalent ounce from USD690 per gold equivalent ounce, as an elevated level of unit costs and lower recoveries during the ramp-up at its Amursk POX facility and at its newly launched Mayskoye mine hit the company.
The company also said that it took a non-cash pretax impairment charge of USD366 million for the year as a result of the lower gold and silver prices bringing down the carrying value of its Varvara and Khakanja sites and its low-grade ore stockpiles at Omolon.
Polymetal slashed its final dividend USD0.08 per share from USD0.31 per share the previous year, bringing its total dividend for the year to USD0.09 per share.
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.
At the time, Polymetal re-iterated its production guidance of 1.3 million ounces of gold equivalent for 2014 and 1.35 million ounces in 2015.
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.
Polymetal shares were up 0.2% to 616.50 pence early Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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