Petropavlovsk posts record production in first quarter

Petropavlovsk achieved record gold production in the first quarter as output increased at its Pioneer and Albyn mines in Russia.

Petropavlovsk achieved record gold production in the first quarter as output increased at its Pioneer and Albyn mines in Russia.

The group produced 136,800 ounces (oz) of gold for the first three months of the year, up 13% from 2012.

It sold 146,400oz of gold at an average price of $1,639/oz.

Chairman Peter Hambro said it was reviewing its strategy following a sharp fall in gold price from $1,700/oz at the beginning of January to a recent low of $1,380/oz.

"One option is to conserve cash by restricting discretionary capital and exploration expenditure whilst redoubling our efforts to move newly identified, non-refractory resources at Pioneer into mineable reserves so as to de-risk the production schedule for 2014 - the year of scheduled commissioning of the POX [pressure oxidation] Hub - and perhaps for longer," he said.

Petropavlovsk is on track to complete installing a POX processing facility at its Pokrovskiy mine to process flotation concentrate from Pioneer for commissioning in the third quarter of this year and first quarter in 2014.

The company reiterated its full-year production target of 760,000oz to 780,000oz. In the year ahead, the group has in place forward sales contracts for 302,100oz of gold to be cash-settled at an average price of US$1,663/oz.

"Operationally, the year has begun positively for Petropavlovsk with output on track to achieve the previously guided production target," Hambro added.

RD

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