Polymetal: Q1 2023 production results

Polymetal International plc

Q1 2023 production results

Polymetal reports production results for the first quarter ended March 31, 2023.

“Q1 saw continued metal inventory release and positive revenue dynamics. Management is optimistic that the unwinding of saleable inventory will be substantially completed by the end of Q2 2023. Quarterly production was in line with our plan and we confirm our full-year guidance of 1.7 Moz of GE”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

OPERATING HIGHLIGHTS

PRODUCTION BY MINE

CONFERENCE CALL AND WEBCAST

The Group’s management will discuss the Q1 2023 production results and the proposed re-domiciliation during the Analyst and Investor Briefing on Wednesday, 10 May, 2023, at 10:00 BST (12:00 Moscow time, 15:00 Astana time) at the etc.venues, 8 Fenchurch Pl, London EC3M 4PB. To join the webcast please follow the link:

https://event.on24.com/wcc/r/4215044/57F84C60B29C3706B85933B505CAF446.

Enquiries

FORWARD-LOOKING STATEMENTS

This release may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “should” or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the company’s control that could cause the actual results, performance or achievements of the company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the company’s present and future business strategies and the environment in which the company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the company’s actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

KYZYL

At Kyzyl, reported gold production for the quarter was down by 13% y-o-y to 71 Koz due to persistent railway congestion in eastward direction. As a result, concentrate shipments to both Amursk POX and China have been delayed. The management is evaluating alternative shipment routes and approaches, including trucking, to resolve the backlog.

Meanwhile, gold in concentrate increased by 14% on the back of improvements in grade, throughput, and recovery. The Company expects the annual throughput of the concentrator to reach 2.4 Mtpa this year.

VARVARA

At Varvara, Q1 gold production contracted by 23% y-o-y to 44 Koz on the back of the planned decline in Komar ore grade as well as substantial work-in-progress release in Q1 2022. At the flotation circuit, the output was also down driven by a lower share of high-grade third-party feed.

ALBAZINO

At Albazino, gold production increased by 16% y-o-y to 65 Koz driven by the contribution from Kutyn Heap Leach launched in the late Q3 2022. Gold production from Albazino concentrate at Amursk POX alone fell by 27% y-o-y as the high-grade Anfisa open pit was fully depleted in H2 2022 resulting in the scheduled grade decline.

Open-pit ore mined decreased as planned due to the completion of mining at Anfisa and Ekaterina-2.

DUKAT OPERATIONS

Silver and gold production at Dukat decreased driven by declining grades after the high-grade open pit was fully depleted. There was no reported production from Primorskoye in the quarter, ore shipment will recommence following the start of sea navigation in June.

OMOLON

In Q1, gold production at Omolon grew by 18% y-o-y to 45 Koz on the back of the increased share of higher-grade ore from the Burgali open pit in the Kubaka mill’s feed.

First ore from the Burgali underground is expected in Q2. Underground mining at Tsokol was completed. Underground workings will be flooded in line with a pre-approved reclamation plan.

NEZHDA

At Nezhda, gold grade and recovery declined as processing focused on previously stockpiled oxidised ore and mining was halted for almost entire quarter to reduce costs.

However, total production of gold grew by 77% y-o-y to 31 Koz due to larger volumes of concentrate shipped to off-takers and processed at POX. Dore from gravity and low-carbon flotation concentrates was produced in-house at Dukat, Voro, and Amursk POX.

SVETLOYE

At Svetloye, gold production marginally decreased y-o-y and stood at 18 Koz. Average grade at the heap leach was substantially higher relative to the low base of Q1 2022, when stacking of stockpiled low-grade ore from the depleted Lyudmila main pit took place.

VORO

Voro recorded a 35% y-o-y decline in production on the back of decreasing volumes of the higher-grade Pesherny ore in the CIP feed, while its lower recovery also depressed the average recovery at the CIP plant.

Ore mining at Pesherny accelerated in anticipation of the launch of the Voro flotation plant which is scheduled for June 2023. Wet commissioning at Voro flotation has already commenced.

MAYSKOYE

At Mayskoye, gold in concentrate produced inQ1 recorded a y-o-y decrease due to processing of larger volumes of lower grade stockpiles. The Company expects production to normalise over the course of 2023.

The expansion of the scope of sanctions to include additional materials and equipment under the tenth EU/UK sanctions package is expected to have an adverse impact on the Mayskoye backfill project. The estimated start-up will likely be delayed for up to 9 months from the initial plan of Q3 2024, as some critical items will need to be re-sourced from Asia.

AMURSK POX

The decrease in POX production was attributable to the grade decline in feedstock sourced from Kyzyl and Albazino. The Company increased the volume of Nezhda concentrate processed, which resulted in a minor decrease in recovery rate.

At POX-2, construction and installation works at the intensive cyanidation section and other parts of the downstream circuit were completed. Section commissioning is underway; start-up is expected in Q2 2023. The construction of metal frameworks for technological equipment in the High Bay steam conditioning section is nearing completion. The installation of piping and equipment in the CIL section continues.

All construction and installation works at the oxygen station are expected to be completed by the end of May together with the start the complex commissioning.

The Company now expects POX-2 start-up in H2 2024 (previously Q2 2024) as more time is required to findreplacements for sanctioned equipment in China.

SUSTAINABILITY, HEALTH AND SAFETY

No fatal accidents occurred among the Group’s workforce and contractors in Q1 2023. Lost time injury frequency rate (LTIFR) among the Group’s employees stood at 0.09 (0.10 in Q1 2022), representing a 10% y-o-y decline, with three incidents recorded (three in Q1 2022) related to hit by an object, falling rock, slipping and tripping while walking resulting in minor lost-time injuries. Additionally, one lost-time injury (person hit by an object) took place among contractors working on site, classified as minor (three in Q1 2022).