Polymetal production and revenues rise in second quarter

The FTSE 100 miner said gold equivalent output for the first half was up 4% year-on-year at 723,000 ounces.

Revenue for the second quarter was ahead 30% year-on-year reach $ 641m, on the back of higher gold prices and sales volumes, while first half revenue rose 20% to$1.14bn.

Polymetal said there was a lag between gold production and sales, due to Varvara concentrate sales, which was expected to close in the second half.

The company said it generated “significant” free cash flow in the reporting period, adding that net debt was “largely unchanged” relative to the first quarter at $1.69bn, while it paid $197m of final dividends for the 2019 financial year, or 42 US cents per share.

As in previous years, the board said free cash flow generation would be weighted towards the second half, on the back of seasonal working capital drawdown.

Construction and development activities at Nezhda and POX-2 progressed on schedule, the board said, adding that Covid-19 restrictions and cautionary measures had not slowed down execution progress on those projects.

The company confirmed its full-year 2020 production guidance of 1.5 million ounces of gold equivalent.

It also maintained its cost guidance, as depreciation of the Russianrouble and Kazakh tenge was currently counterbalanced by Covid-related costs.

“The second quarter saw a continued steady performance of the group,” said group chief executive officer Vitaly Nesis.

“We have been taking a range of measures aimed at protecting our employees and contractors in light of the Covid-19 pandemic, while allowing our operations and projects to proceed without interruptions or delays to date.”

At 0923 BST, shares in Polymetal were up 3.49% at 1,766.5p.