Petropavlovsk gold production falls in first quarter

Russia-focussed precious metals miner Petropavlovsk reported total first quarter gold production of 95,600 ounces on Tuesday, making for a decrease of 49% over the same period a year earlier.

The FTSE 250 company said own-mined gold production totalled 82,400 ounces for the three months ended 31 March, down from 102,000 ounces a year earlier, with marginally higher production at Malomir offset by reduced output at Albyn and Pioneer.

Third-party concentrate gold production decreased to 13,200 ounces from 84,200 ounces in the prior year, which the board put down to expected lower volumes of concentrate available for purchase, and lower grades in the concentrates supplied.

On the sales front, Petropavlovsk said it sold 95,600 ounces in the first quarter, down from 162,500 year-on-year.

Its average realised gold price for the period was 14% higher at $1,789 per ounce, with no gains or losses from hedging in the quarter.

The company reiterated its production guidance for the year, saying it expected total 2021 gold production of between 430,000 and 470,000 ounces, comprising own gold production of 370,000 to 390,000 ounces, and gold production from third-party concentrate of 60,000 to 80,000 ounces.

“Gold production from our own ore in the first quarter of 2021 was broadly in line with the fourth quarter of 2020, and keeps us on track to meet our guidance for the year,” said chief executive officer Denis Alexandrov.

“Quarterly output was reduced year-on-year due to lower production from Albyn, where mining has moved to the nearby Elginskoye deposit, and as a result of processing lower volumes and grades of third-party concentrates at our POX hub.

“In the second half of the year, we anticipate higher output at Pioneer, following the commissioning of its new flotation plant in the second quarter, and a potential increase in third-party material.”

Alexandrov said he was continuing to work with the new management team on its “extensive” business review.

“This review has already delivered a revised management structure that is nearing completion.

“It will also evaluate the group's development strategy that we expect to complete in the third quarter of 2021, with the results to be shared later in the year.”

At 0901 BST, shares in Petropavlovsk were up 2.16% at 27.38p.