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Polymetal wary on 2013 production

Polymetal said gold production had topped expectations in 2012 but warned there was a moderate chance it would miss this year's target.

Polymetal said gold production had topped expectations in 2012 but warned there was a moderate chance it would miss this year's target.

Its full year production results showed total gold equivalent production of 1,063 Koz, up 31% compared to 2011 and exceeding the original guidance of 1 Moz by 6%.

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This was driven by stable performance at all its mature mines, with a notable improvement achieved at Dukat, and successful ramp-up at Omolon and Albazino.

In the fourth quarter total sales were up by 5% to $571m, driven by a 9% rise in silver sales, offsetting a 5% fall in gold and a 33% fall in copper sales.

While the company confirmed its 2013 production guidance of 1.2 Moz of gold equivalent, it added that delays in ramping its POX facility meant it could miss this by up to 5%.

The plant has suffered from unexpectedly high chlorine concentrations in process water and certain design weaknesses.

It had to be shut down in late December and currently operated at 60% of capacity, the firm said.

Annual gold production was 589 Koz, up 33% year-on-year driven mainly by the successful ramp-up at Omolon and Albazino.

Annual silver production was 26.5 Moz, up 33% year-on-year as a result of higher grades and recoveries at Dukat, successful processing of high-grade Sopka ore at Omolon, and increased silver grades at Khakanja.

The firm said that given current macroeconomic environment and a recent significant appreciation of the Russian rouble against the US Dollar, it expected total cash costs in 2013 to be around $700-725/GE oz and capital expenditures (inclusive of exploration) of around $300m.

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