Trading update fourth quarter and full year 2019 28 January 2020
PJSC Polyus ("Polyus" or the "Company") today releases its 4Q 2019 and FY 2019 operating results for the period ending 31 December 2019.
FY 2019 Highlights
· Total gold output increased to 2,841 thousand ounces, compared to 2,440 thousand ounces in the prior year, a 16% increase year on year. This is 1.5% higher than the official guidance for the full year 2019 of 2,800 thousand ounces.
· Dor gold volumes totalled 2,847 thousand ounces, up 16% compared to the prior year.
· Volumes of ore mined rose by 54% year on year to 66,095 thousand tonnes, driven by intensified mining activities at Natalka, Blagodatnoye and Olimpiada.
· Volumes of ore processed increased 16% year-on-year to 44,078 thousand tonnes, reflecting the performance of the Natalka Mill post the ramp-up completion in December 2018, and the implementation of throughput capacity expansion projects across core assets.
· Recovery rate stood at 82.3%, up 1.5 ppts from the previous year.
· Estimated gold sales increased 38% year-on-year to $3,965 million, with an estimated weighted-average gold selling price of $1,403/oz (FY2018: $1,265/oz).
4Q 2019 Highlights
· Total gold output increased 7% to 804 thousand ounces compared to the previous quarter. Year on year, volumes of dor gold and total gold output grew by 22% and 26% respectively.
· Volumes of ore mined amounted to 19,011 thousand tonnes, a 9% increase on the previous quarter. On a year on year basis, volumes of ore mined rose by 58%, driven by intensified mining activities at Natalka and Verninskoye.
· Volumes of ore processed totalled 11,527 thousand tonnes, remaining largely flat compared to the previous quarter. Year on year, volumes of ore processed rose by 24% mainly due to the ramp-up of the Natalka Mill.
· Recovery rate stood at 83.2%, up 1.1 ppts from the previous quarter.
· Estimated gold sales amounted to $1,277 million, up 20% compared to the previous quarter, with an estimated weighted-average gold selling price of $1,482/oz, remaining flat quarter-on-quarter.
· As at 31 December 2019, the estimated net debt stood at $3,285 million, compared to $3,317 million as at the end of the previous quarter.
Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:
"In 2019, Polyus delivered solid results, surpassing production guidance for the sixth consecutive year. Natalka contributed 405 thousand ounces of gold in its first year of operations following the ramp up completion, and was a key driver behind the 16% year-on-year increase in our total gold output figure of 2,841 thousand ounces.
Polyus continues to examine new brownfield opportunities within its existing operations. We have recently approved further expansion of throughput capacity at Verninskoye Mill to 3.5 million tonnes per annum. We expect that this initiative will add approximately 40 thousand ounces of incremental volumes in 2021. We are currently evaluating a number of other brownfield options and will provide the market with details on these later in 2020 once feasibility studies are complete.
Progress at Sukhoi Log, one of the world's largest gold greenfield projects, has continued to schedule. With the comprehensive exploration drilling programme being completed, and our Pre-Feasibility under way, we expect to provide a maiden Ore Reserve estimate for Sukhoi Log and the key outcomes of the Pre-Feasibility study in 2020.
On ESG front, Polyus once again emphasized its commitment to being a sustainable and socially responsible company in joining the UN Global Compact. We are pleased that our work has been recognized with our inclusion in the MSCI Emerging Markets ESG Leaders Index and further improved scores in sustainability ratings including SAM and Sustainalytics. For the first time, we were named Russia's most transparent metals & mining company in the annual rating prepared by WWF.
Looking ahead to 2020, we remain committed to our production target of approximately 2.8 million ounces of gold."
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