Polymetal Q1 shines on higher gold production

Polymetal said first quarter gold equivalent production grew 27% year-on-year to 374,000 ounces as the Kyzyl operation exceeded design throughput and recovery and enjoyed positive grade reconciliation.

Revenues increased 28% year-on-year to $454m, largely driven by a 41% uptick in gold sales compared to the prior year.

Quarterly gold production was up 41% over the previous year at 302,000 ounces, while silver production fell 15% due to the planned grade decline at the Dukat underground mine. The share of gold production increased to 81% of the group's total output.

Polymetal said the Kyzyl mine continued to demonstrate an “excellent” operating performance in the quarter with flotation recoveries climbing up to 89% in March, while gold production was 78,000 ounces, with 92,000 ounces produced in concentrate.

It added that full-scale construction activities had started at both the Nezhda and POX-2 projects which are expected to start up in the first quarter of 2021 and second half of 2023 respectively.

The company said it was on track to produce 1.55m ounces of gold equivalent in 2019 and reiterated full-year cost guidance: the total cash cost range of $600-$650 an ounce.

“The cost guidance remains contingent on the Russian rouble and Kazakh tenge exchange rate dynamics, which has a significant effect on the group's operating costs,” Polymetal said.