Polymetal International hails record production, confirms targets

Russian miner Polymetal International continued to produce strong levels of gold in the third quarter, with production up 26% and revenues for the quarter rising 17%.

The London-listed achieved a quarterly production record of 470,000 oz of gold equivalent, helped by a fully ramped up Svetloye heap leach operation and Mayskoye oxide ore processing, while Albazino and Kazakhstan's Varvara also achieved record quarterly production levels.

Full year production and cost targets were confirmed, with Polymetal on track to hit its target of 1.4m oz of gold equivalent at a total cash cost of $600-650 per oz and an all-in sustaining cost of $775-825 per oz.

Silver production declined 7% year-on-year to 7.4m oz for the three months to the end of September due to the planned grade decline at the Dukat underground mine.

Total group revenues of $546m were made, up 17% over the previous year as gold sales jumped 50% on the back of higher output and prices.

During the quarter, the FTSE 250-listed company generated free cash flow which was used to pay $60m in interim dividends and a $20m consideration for a stake increase in the Nezhda gold property.

Polymetal, which said it will continue to generate free cash flow in the fourth quarter, saw net debt increase to $1.6bn by the end of September, from June's $1.58bn.

Chief executive Vitaly Nesis said the high-grade Kyzyl project in north-eastern Kazakhstan continued to advance towards first concentrate production "in less than a year's time".

For 2018, he re-confirmed production guidance of 1.55m oz of gold equivalent and for 2019 at 1.7m oz of gold.