Q3 2017 Production Results

RNS Number : 6572T
Polymetal International PLC
16 October 2017
 

 

 

Release time

 

IMMEDIATE

Date

16 October 2017

 

 

Polymetal International plc

Q3 2017 production results

 

Polymetal International plc (LSE, MOEX: POLY; ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to report the Group's production results for the third quarter and nine months ended September 30, 2017.

HIGHLIGHTS

·     In Q3 2017, Polymetal achieved a record production of 470 Koz of gold equivalent (GE), which represents a 26% increase over the previous year. The increase was driven by strong contributions from the fully ramped up Svetloye heap leach operation (Okhotsk hub) and Mayskoye oxide ore processing. Albazino and Varvara also achieved record quarterly production levels.

·     In the first nine months of 2017, the Company produced 1,028 Koz of GE, a 15% increase over the previous year and in line with the FY2017 production plan of 1.4 Moz of GE.

·     Q3 gold output increased 38% year-on-year to 370 Koz. Silver production declined 7% year-on-year to 7.4 Moz due to the planned grade decline at the Dukat underground mine.

·     Q3 sales amounted to US$ 546 million, up 17% over the previous year as gold sales jumped 50% on the back of higher output and prices. The timing gap between silver production and sales is expected to be fully closed in Q4 2017.

·     At Kyzyl, construction is progressing on schedule. During the quarter, all major processing equipment has been installed with external electrical infrastructure now fully operational. Construction activities are now focused on finalising the tailings storage facility. The project remains on track to produce its first concentrate in Q3 2018.

·     During the quarter, the Company generated free cash flow which was used to pay US$ 60 million in interim dividends (US$ 0.14 per share) and a US$ 20 million consideration for a stake increase in the Nezhda gold property. The Company will continue to generate free cash flow in the fourth quarter. Net debt increased marginally from US$ 1,583 million as of June 30 to US$ 1,599 million as of September 30, 2017.

·     The Company is on track to meet its FY2017 production guidance of 1.4 Moz of GE at TCC of US$ 600-650/GE oz and AISC of US$ 775-825/GE oz. Cost guidance remains contingent on the Rouble/Dollar exchange rate dynamic that has a significant effect on the Group's Rouble-denominated operating costs.

·     Polymetal re-confirms its production guidance for FY2018 at 1.55 Moz of GE and for FY2019 at 1.7 Moz of GE.

·     Polymetal will be hosting an Analyst and Investor Day on November 13 in London to provide an update on key development projects.

"Our operational performance in the third quarter was very robust and the Company remains on track to meet its annual production and cost guidance", said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. "Meanwhile, Kyzyl continues to advance towards first concentrate production in less than a year's time".

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change1

 

2017

2016

2017

2016

 

 

 

 

 

 

 

Waste mined, Mt

29.7

23.9

+24%

84.7

58.1

+46%

Underground development, km

30.0

24.6

+22%

83.9

68.3

+23%

Ore mined, Kt

3,066

3,462

-11%

9,657

9,194

+5%

Open-pit

1,975

2,405

-18%

6,377

6,448

-1%

Underground

1,091

1,057

+3%

3,279

2,746

+19%

Ore processed, Kt

3,725

3,306

+13%

10,011

8,593

+13%

Production

 

 

 

 

 

 

Gold, Koz

370

268

+38%

759

606

+25%

Silver, Moz

7.4

8.0

-7%

20.2

22.2

-9%

Copper, Kt

0.9

0.3

+193%

1.9

1.3

+50%

Zinc, Kt

1.3

1.3

+1%

3.6

2.0

+77%

Gold equivalent, Koz2

470

372

+26%

1,028

894

+15%

Sales

 

 

 

 

 

 

Gold, Koz

363

242

+50%

742

561

+32%

Silver, Moz

5.8

8.3

-31%

18.2

21.3

-15%

Copper, Kt

0.8

0.3

+139%

1.3

0.4

+189%

Zinc, Kt

1.2

1.4

-11%

3.5

1.5

+123%

Revenue, US$m3

546

466

+17%

1,229

1,059

+16%

Net debt, US$m4

1,599

1,583

+1%

1,599

1,329

+20%

Safety5

 

 

 

 

 

 

LTIFR

0.11

0.20

-45%

0.14

0.19

-22%

Fatalities

0

0

0%

1

2

-50%

Notes:     (1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.

                (2) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.

                (3) Calculated based on the unaudited consolidated management accounts. Concentrate sales are recorded based on forward prices for the expected dates of final settlement and concentrate revenue is presented net of refining and treatment charges.

(4) Non-IFRS measure based on unaudited consolidated management accounts. Net debt equals to current and non-current borrowings less cash and cash equivalents and includes the liability for dividend payable. Comparative information is presented for 30 June 2017 (for the 3 months period) and 31 December 2016 (for the 9 months period).

                (5) LTIFR = lost time injury frequency rate per 200,000 hours worked.

               

PRODUCTION BY MINE

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

%

change1

 

2017

2016

2017

2016

 

 

 

 

 

 

 

GOLD EQ. (KOZ) 2

 

 

 

 

 

 

Dukat

83

93

-11%

241

280

-14%

Albazino-Amursk

89

72

+24%

197

190

+4%

Mayskoye

81

47

+70%

90

68

+31%

Omolon

45

41

+10%

139

108

+28%

Voro

30

36

-18%

89

93

-4%

Varvara

33

22

+52%

88

57

+55%

Okhotsk

97

49

+100%

147

79

+87%

Kapan

12

12

+2%

37

18

+103%

TOTAL

470

372

+26%

1,028

894

+15%

Notes:     (1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.

                (2) Based on 1:80 Ag/Au, 5:1 Cu/Au and 2:1 Zn/Au conversion ratios.

 

CONFERENCE CALL AND WEBCAST

Polymetal will hold a conference call and webcast on Monday, October 16 at 13:00 London time (15:00 Moscow time).

To participate in the call, please dial:

8 10 800 204 140 11 access code 33335091# (free from Russia), or

+44 20 3367 9461 (free from the UK), or

1 855 402 7761 (free from the US), or 

Any of the above numbers (from outside the UK, the US and Russia) or follow the link: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=4995.

Please be prepared to introduce yourself to the moderator or register.

The webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=4995. A recording of the call will be available immediately after the call at +44 20 3367 9460 (from within the UK), 1 877 642 3018 (from within the US) and +7 495 745 79 48 (from within Russia), access code 311079#, from 15:00 Moscow time on Monday, October 16 and until 15:00 Moscow time on Monday, October 23, 2017.

Enquiries

Media

 

Investor Relations

FTI Consulting

Leonid Fink

Viktor Pomichal

+44 20 3727 1000

Polymetal

Evgenia Onuschenko

Maryana Nesis

Michael Vasiliev                   

ir@polymetalinternational.com

+44 20 7016 9505 (UK)

 

+7 812 334 3666 (Russia)

Joint Corporate Brokers

 

Morgan Stanley

Sam McLennan

Richard Brown


Panmure Gordon

Adam James

Tom Salvesen

+44 20 7425 8000

 

 

 

+44 20 7886 2500

RBC Europe Limited

Tristan Lovegrove

Marcus Jackson

+44 20 7653 4000

 

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

 

DUKAT OPERATIONS

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Dukat

 

 

 

 

 

 

Underground development, m

8,710

8,928

-2%

24,923

26,514

-6%

Ore mined (underground), Kt

395

409

-4%

1,211

1,211

+0%

 

 

 

 

 

 

 

Goltsovoye

 

 

 

 

 

 

Underground development, m

1,834

1,449

+27%

5,098

4,712

+8%

Ore mined (underground), Kt

51

48

+6%

143

141

+1%

 

 

 

 

 

 

 

Lunnoye + Arylakh

 

 

 

 

 

 

Underground development, m

2,045

1,407

+45%

5,847

3,952

+48%

Ore mined (underground), Kt

134

104

+29%

419

314

+33%

 

 

 

 

 

 

 

Perevalnoye

 

 

 

 

 

 

Underground development, m

1,002

-

NA

2,259

-

NA

 

 

 

 

 

 

 

Nachalny-2

 

 

 

 

 

 

Waste mined, Kt

197

-

NA

273

-

NA

Ore mined (open pit), Kt

32

-

NA

48

-

NA

 

 

 

 

 

 

 

Terem

 

 

 

 

 

 

Underground development, m

711

-

NA

1,169

-

NA

Ore mined (underground), Kt

6

-

NA

11

-

NA

 

 

 

 

 

 

 

 

TOTAL HUB

 

 

 

 

 

 

Waste mined, Kt

197

-

NA

273

-

NA

Underground development, m

14,302

11,784

+21%

39,296

35,178

+12%

Ore mined, Kt

 

 

 

 

 

 

    Open-pit

32

-

NA

48

-

NA

    Underground

586

561

+4%

1,785

1,667

+7%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Dukat

 

 

 

 

 

 

Ore processed, Kt

496

474

+5%

1,463

1,458

+0%

Grade

 

 

 

 

 

 

Gold, g/t

0.4

0.7

-42%

0.4

0.6

-29%

Silver, g/t

329

386

-15%

323

374

-14%

Recovery1

 

 

 

 

 

 

Gold

87.9%

87.1%

+1%

86.2%

86.3%

-0%

Silver

89.1%

85.6%

+4%

88.6%

85.2%

+4%

Production

 

 

 

 

 

 

Gold, Koz

5.9

9.2

-35%

17.7

23.9

-26%

Silver, Moz

4.6

4.9

-7%

13.2

14.8

+14%

 

Lunnoye

 

 

 

 

 

 

Ore processed, Kt

118

107

+10%

346

325

+7%

Grade

 

 

 

 

 

 

Gold, g/t

1.2

1.4

-12%

1.3

1.5

-18%

Silver, g/t

360

465

-23%

363

463

-22%

Recovery1

 

 

 

 

 

 

Gold

91.3%

91.9%

-1%

91.1%

92.4%

-1%

Silver

93.3%

91.0%

+3%

92.6%

92.0%

+1%

Production

 

 

 

 

 

 

Gold, Koz

4.3

4.5

-5%

12.7

15.2

-16%

Silver, Moz

1.3

1.5

-12%

3.7

4.5

-18%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

10.2

13.6

-25%

30.4

39.1

-22%

Silver, Moz

5.8

6.4

-8%

16.8

19.3

-13%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory (concentrate, precipitate)

Q3 silver production at the Dukat hub decreased 8% to 5.8 Moz year-on-year as higher processing volumes and improved recoveries failed to offset declining grades. Grade declines are partially attributable to lower cut-off-grades which take into account lower mining costs, lower treatment charges and higher recoveries.

Ores from Dukat satellite deposits, Nachalny-2 and Terem, were introduced to the feed at the Omsukchan concentrator as the Goltsovoye mine is winding down. First ore from the polymetallic Perevalnoye deposit is expected to enter processing in Q4 2017.

At Lunnoye record amounts of ore were mined and processed as stoping commenced at the new Zone 5 vein. Lower silver grade is mostly attributable to depletion of high-grade portion of the Zone 7 vein.

 

ALBAZINO-AMURSK

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Waste mined, Kt

5,235

5,226

+0%

14,624

13,845

+6%

Underground development, m

2,125

1,447

+47%

5,610

4,379

+28%

Ore mined, Kt

475

482

-1%

1,467

1,367

+7%

Open-pit

387

409

-6%

1,217

1,163

+5%

Underground

89

72

+23%

250

205

+22%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Albazino concentrator

 

 

 

 

 

 

Ore processed, Kt

436

409

+7%

1,291

1,239

+4%

Gold grade, g/t

4.9

5.1

-5%

4.8

5.1

-5%

Gold recovery1

88.3%

88.0%

+0%

87.5%

87.0%

+1%

Concentrate produced, Kt

34.3

34.2

+0%

105.8

102.8

+3%

Concentrate gold grade, g/t

54.5

53.6

+2%

51.5

53.2

-3%

Gold in concentrate, Koz2

60.1

58.9

+2%

175.2

175.8

-0%

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

47.3

43.9

+8%

113.5

117.1

-3%

Gold grade, g/t

62.1

53.3

+17%

58.2

52.1

+12%

Recovery

96.2%

94.1%

+2%

96.1%

94.1%

+2%

Gold produced, Koz3

89.2

71.9

+24%

197.3

189.9

+4%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

89.2

71.9

+24%

197.3

189.9

+4%

Notes:     (1) To concentrate

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon completion of downstream processing at the Amursk POX

(3) 1H 2016 now includes gold produced from the third-party concentrate, previously accounted in Mayskoye production

At Albazino/Amursk, gold production in the third quarter of 2017 increased 24% year-on-year to 89.2 Koz, making up for the 7-week maintenance and retrofit shutdown in Q2 2017.

The increase was mainly driven by the improvement of gold recovery levels at the Amursk Pox by 2% on the back of the water treatment and heat exchange section upgrades, as well as significantly higher grades in 3rd-party concentrates.

At the Albazino underground mine productivity continued to improve with the completion of the transition to partially consolidated backfill in primary stopes.

The debottlenecking project at the Amursk POX is on schedule with structural steel installation complete and all processing and auxiliary equipment on site.

OMOLON OPERATIONS

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Sopka

 

 

 

 

 

 

Waste mined, Kt

1,960

-

NA

4,290

-

NA

Ore mined (open pit), Kt

160

-

NA

224

-

NA

 

 

 

 

 

 

 

Tsokol

 

 

 

 

 

 

Underground development, m

962

1,022

-6%

2,859

2,954

-3%

Ore mined (underground), Kt

46

41

+10%

106

70

+52%

 

 

 

 

 

 

 

Birkachan

 

 

 

 

 

 

Waste mined, Kt

-

792

-100%

-

2,174

-100%

Underground development, m

1,060

869

+22%

3,408

1,574

+117%

Ore mined, Kt

29

253

-89%

83

616

-86%

Open-pit

-

230

-100%

-

589

-100%

Underground

29

23

+26%

83

27

+209%

 

 

 

 

 

 

 

Oroch

 

 

 

 

 

 

Waste mined, Kt

-

1,178

-100%

109

4,085

-97%

Ore mined (open pit), Kt

-

282

-100%

81

691

-88%

 

 

 

 

 

 

 

Olcha

 

 

 

 

 

 

Waste mined, Kt

-

288

-100%

184

288

-36%

Underground development, m

968

-

NA

2,294

-

NA

Ore mined (open pit), Kt

-

40

-100%

73

40

+80%

 

 

 

 

 

 

 

TOTAL HUB

 

 

 

 

 

 

Waste mined, Kt

1,960

2,257

-13%

4,583

6,546

-30%

Underground development, m

2,990

1,891

+58%

8,561

4,528

+89%

Ore mined, Kt

234

617

-62%

567

1,417

-60%

    Open-pit

160

553

-71%

378

1,320

-71%

    Underground

74

64

+16%

190

97

+95%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Birkachan Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

241

-

NA

362

-

NA

Gold grade, g/t

1.3

-

NA

1.3

-

NA

Gold production, Koz

3.4

-

NA

3.4

-

NA

 

 

 

 

 

 

 

Kubaka Mill

 

 

 

 

 

 

Ore processed, Kt

217

212

+2%

646

629

+3%

Grade

 

 

 

 

 

 

Gold, g/t

4.8

4.3

+12%

5.8

4.6

+26%

Silver, g/t

156

182

-15%

104

110

-6%

Recovery1

 

 

 

 

 

 

Gold

92.6%

92.5%

+0%

93.7%

90.7%

+3%

Silver

86.8%

91.3%

-5%

84.5%

86.2%

-2%

Gold production, Koz

29.1

27.4

+6%

113.4

85.7

+32%

Silver production, Moz

1.0

1.1

-6%

1.7

1.8

-4%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

32.5

27.4

+19%

116.8

85.7

+36%

Silver, Moz

1.0

1.1

-6%

1.7

1.8

-4%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory

In Q3, Omolon delivered a solid set of results with a 19% increase in gold production year-on-year. Gold grade in ore processed improved 12% to 4.8 g/t year-on-year as ore volumes from Tsokol and Birkachan underground mines continued to increase.

At Sopka, open-pit mining is proceeding ahead of schedule with 160 Kt of ore mined in Q3 to be transported to the Kubaka mill in Q1 2018.

MAYSKOYE

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Waste mined, Kt

1,477

-

NA

4,049

-

NA

Underground development, m

4,792

4,800

-0%

14,396

14,832

-3%

Ore mined, Kt

228

213

+7%

766

502

+53%

Open-pit

65

-

NA

208

-

NA

Underground

163

213

-23%

558

502

+11%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Flotation

 

 

 

 

 

 

Flotation

 

 

 

 

 

 

Ore processed, Kt

218

214

+2%

581

541

+7%

Gold grade, g/t

4.7

5.1

-8%

5.5

5.4

+1%

Gold recovery1

87.0%

87.1%

-0%

87.4%

87.6%

-0%

Concentrate produced, Kt

17.6

18.7

-6%

47.7

51.6

-8%

Gold in concentrate, Koz2

28.6

30.3

-6%

86.8  

82.6

+5%

Concentrate sold, Kt

39.3

29.7

+32%

39.3  

29.7

+32%

Payable gold in concentrate sold, Koz

67.1  

43.2

+55%

67.1  

43.2  

+55%

 

Leaching

 

 

 

 

 

 

Ore processed, Kt

3

-

NA

67

-

NA

Gold grade, g/t

10.1

-

NA

9.9

-

NA

Recovery

NM

-

NA

51.6%

-

NA

Gold in carbon, Koz3

4.1

-

NA

12.1

-

NA

Gold produced, Koz

11.3

-

NA

11.3

-

NA

 

 

 

 

 

 

 

 

 

Amursk POX

 

 

 

 

 

 

Concentrate processed, Kt

0.9

2.0

-55%

6.1

13.7

-55%

Gold grade, g/t

46.9

51.9

-10%

49.5

54.8

-10%

Recovery

96.2%

94.0%

+2%

96.2%

94.0%

+2%

Gold produced, Koz4

2.1

4.1

-49%

11.1

25.0

-56%

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

80.5

47.2

+70%

89.5

68.2

+31%

Notes:     (1) To concentrate

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in   total production upon sale to off-taker or internal downstream processing to saleable metal product

(3) Work in progress. For information only; not considered as gold produced and therefore not reflected in the table representing total production

(4) 2016 now excludes gold produced from the third-party concentrate, which is accounted in Albazino/Amursk production

In the third quarter, gold production at Mayskoye totalled 80.5 Koz, a 70% increase from the prior year period as most of Mayskoye concentrate was de-stockpiled, while the capacity of the Amursk POX plant has been taken up by third-party material.

After low CIL recoveries in Q2 at the crown pillar project, additional metallurgical testing was carried out during Q3. As a result, future oxide ore processing will be through a combined float-leach circuit with flotation removing the bulk of preg-robbing organic carbon. This circuit will commence operation in May 2018 and in the meantime, the processing plant will treat sulphide ore. Open-pit mining will be slowed-down during the winter months.

 

VARVARA

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Varvara

 

 

 

 

 

 

Waste mined, Kt

1,471

4,866

-70%

8,130

14,320

-43%

Ore mined, Kt

192

701

-73%

1,070

1,937

-45%

 

 

 

 

 

 

 

Komarovskoye

 

 

 

 

 

 

Waste mined, Kt

3,821

1,050

+264%

9,081

1,050

+765%

Ore mined, Kt

463

65

+614%

1,363

65

NM

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Flotation

 

 

 

 

 

 

Ore processed, Kt

103

1

NM

191

355

-46%

Grade

 

 

 

 

 

 

Gold, g/t

2.1

3.6

-42%

2.2

1.3

+70%

Copper

0.71%

0.29%

+141%

0.66%

0.33%

+97%

Recovery1

 

 

 

 

 

 

Gold

69.4%

75.0%

-7%

65.0%

70.2%

-7%

Copper

87.2%

75.0%

+16%

80.7%

72.6%

+11%

Production

 

 

 

 

 

 

Gold (in concentrate), Koz

3.9

0.5

+771%

7.2

7.0

+3%

Copper (in concentrate), Kt

596

20

+2881%

998

836

+19%

 

 

 

 

 

 

 

Toll-treated ore processed, Kt2

28

-

NA

91

-

NA

 

 

 

 

 

 

 

Leaching

 

 

 

 

 

 

Ore processed, Kt

731

731

+0%

2,140

1,954

+10%

Gold grade, g/t

1.2

1.1

+11%

1.3

0.9

+41%

Gold recovery1

84.0%

82.1%

+2%

82.1%

78.0%

+5%

Gold production (in dore), Koz

25.8

21.0

+23%

75.8

45.8

+66%

 

 

 

 

 

 

 

Total ore processed, Kt

862

732

+18%

2,422

2,310

+5%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

29.7

21.4

+39%

83.0

52.8

+57%

Copper, Kt

596

20

+2881%

998

836

+19%


Note:       (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore

(2) To be further processed at Amursk POX.

 

In the third quarter, Varvara delivered a 39% increase in gold production compared to the previous year thanks to the quick ramp-up in ore railed from Komar. The successful streamlining of Komar ore logistics prompted the decision to shift more mining and processing volumes from Varvara to Komar.

The results of a significant in-fill and step-out drilling campaign at Komar together with the updated cost estimates based on the recent performance yielded positive results. An updated reserve estimate was prepared by Polymetal under JORC standards, adding 535 Koz of gold with stable grades of 1.8 g/t. The upgraded estimate represents a significant increase over the previous estimate with a 60% increase in tonnage and a 57% increase in gold content, further extending the Varvara hub mine life by 3 years, until 2032.

The Company now plans to mine, transport by rail and process approximately 2Mt of Komar ore per year at the Varvara processing plant, which constitutes a substantial increase over the 1Mt that was first envisaged at the time of the acquisition.

VORO

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Voro

 

 

 

 

 

 

Waste mined, Kt

2,643

2,679

-1%

7,700

7,993

-4%

Ore mined, Kt

337

353

-4%

1,159

986

+18%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Voro Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

123

232

-47%

302

295

+2%

Gold grade, g/t

1.1

1.7

-35%

1.2

1.6

-26%

Gold production, Koz

5.9

6.7

-13%

11.6

12.2

-5%

Voro CIP

 

 

 

 

 

 

Ore processed, Kt

254

252

+1%

752

750

+0%

Gold grade, g/t

4.1

4.3

-3%

4.2

4.3

-3%

Gold recovery1

79.2%

78.3%

+1%

80.8%

78.4%

+3%

Gold production, Koz

23.8

29.4

-19%

76.5

80.2

-5%

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

29.7

36.1

-18%

88.1

92.4

-5%

Note:       (1) Technological recovery, includes gold within work-in-progress inventory 

Q3 gold production at Voro decreased 18% over 2016 to 29.7 Koz, primarily driven by anticipated lower head grades at both the HL and CIP operations.

Processing volumes and recovery levels at the CIP plant during the quarter remained relatively unchanged over the previous year.

Oxide ore is nearing depletion, while production at the CIP plant is expected to remain stable in mid-term.

 

OKHOTSK OPERATIONS

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Avlayakan

 

 

 

 

 

 

Underground development, m

1,271

1,107

+15%

3,738

3,438

+9%

Ore mined (underground), Kt

30

34

-11%

98

94

+4%

 

 

 

 

 

 

 

Svetloye

 

 

 

 

 

 

Waste mined, Kt

66

259

-75%

321

764

-58%

Ore mined (open pit), Kt

339

324

+5%

935

976

-4%

 

 

 

 

 

 

 

TOTAL HUB

 

 

 

 

 

 

Waste mined, Kt

66

259

-75%

321

764

-58%

Underground development, m

1,271

1,107

+15%

3,738

3,438

+9%

Ore mined, Kt

369

357

+3%

1,032

1,070

-4%

    Open-pit

339

324

+5%

935

976

-4%

    Underground

30

34

-11%

98

94

+4%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Khakanja

 

 

 

 

 

 

Ore processed, Kt

161

157

+3%

467

466

+0%

Grade

 

 

 

 

 

 

Gold, g/t

7.7

6.2

+23%

3.6

3.8

-4%

Silver, g/t

121

94

+29%

107

76

+41%

Recovery1

 

 

 

 

 

 

Gold

97%

96%

+1%

97%

95%

+2%

Silver

81%

83%

-2%

77%

77%

-1%

Gold production, Koz

33.9

29.2

+16%

48.8

53.2

-8%

Silver production, Moz

0.5

0.4

+23%

1.2

0.9

+36%

 

 

 

 

 

 

 

Svetloye Heap Leach

 

 

 

 

 

 

Ore stacked, Kt

455

401

+13%

921

401

+129%

Gold grade, g/t

4.8

3.7

+27%

4.6

3.7

+23%

Gold production, Koz

57.3

14.7

+290%

83.7

14.7

+470%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

91.2

43.9

+108%

132.5

67.9

+95%

Silver, Moz

0.5

0.4

+24%

1.2

0.9

+37%

Note:       (1) Technological recovery, includes gold and silver within work-in-progress inventory (precipitate)

At Okhotsk, gold production in Q3 jumped more than two-fold over the previous year, as the Svetloye heap leach operation continued to enjoy positive grade reconciliation.  In addition, a record 135 Kt of Avlayakan ore was shipped to Okhotsk during the summer navigation period.

Silver production grew 24% to 0.5 Moz as 3rd party ore with higher silver grades was introduced to the feed at the Khakanja plant.

Avlayakan's life-of-mine has been extended to H2 2018 on the back of positive down-dip exploration results earlier this year.

 

KAPAN

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

20161

2017

20161

MINING

 

 

 

 

 

 

Kapan

 

 

 

 

 

 

Underground development, m

4,548

3,537

+29%

12,270

5,938

+107%

Ore mined (underground), Kt

149

112

+33%

399

181

+120%

 

 

 

 

 

 

 

PROCESSING

 

 

 

 

 

 

Ore processed, Kt

143

116

+23%

389

180

+116%

Grade

 

 

 

 

 

 

Gold, g/t

2.0

2.3

-15%

2.3

2.3

-3%

Silver, g/t

35

47

-27%

41

46

-11%

Copper, %

0.27%

0.31%

-14%

0.29%

0.30%

-3%

Zinc, %

1.32%

1.59%

-17%

1.32%

1.56%

-15%

Recovery

 

 

 

 

 

 

Gold

84.6%

85.8%

-1%

84.9%

85.2%

-0%

Silver

81.6%

83.8%

-3%

83.3%

83.9%

-1%

Copper

92.5%

91.7%

+1%

91.7%

91.9%

-0%

Zinc

91.4%

91.4%

+0%

90.3%

91.3%

-1%

 

 

 

 

 

 

 

TOTAL PRODUCTION

 

 

 

 

 

 

Gold, Koz

6.7

6.5

+4%

21.1

9.9

+113%

Silver, Moz

0.1

0.1

-11%

0.4

0.2

+97%

Copper, Kt

0.3

0.3

+8%

0.9

0.4

+111%

Zinc, Kt

1.3

1.3

+1%

3.6

2.0

+77%

During the third quarter, Kapan delivered 6.7 Koz of gold, up 4% year-on-year driven by increased processing volumes on the back of ongoing improvement measures to debottleneck the underground mine. In August, the Kapan concentrator achieved a new throughput record, processing 51 Kt of ore in a single month.

At Lichkvaz, preparatory activities for underground mining are currently underway, and are aimed at widening the underground tunnels for consecutive underground and stope development in 2018.

KYZYL PROJECT

 

3 months ended Sep 30,

% change

9 months ended Sep 30,

% change

 

2017

2016

2017

2016

MINING

 

 

 

 

 

 

Bakyrchik

 

 

 

 

 

 

Waste mined, Kt

12,784

7,521

+70%

35,962

13,616

+164%

In the third quarter, stripping volumes at Kyzyl increased 70% over the previous year to 12,784 Kt as the preparation of the open-pit is underway. All mining activities are proceeding in line with the schedule to produce first ore in March of 2018.

Installation of all major processing equipment has been finalised with the bulk of construction activities now focused on the tailings storage facility.  All external electrical infrastructure (substation, power lines, switchboxes) is now operational and the project remains on track to deliver its first concentrate in Q3 2018.


This information is provided by RNS
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