Output races ahead of sales at Polymetal

Precious metals miner Polymetal International produced more than half a million ounces of gold equivalent in the first half of 2012, with production reaching a new high in the second quarter.

Sales lagged production due to temporary increases in work-in-progress at the Omolon, Albazino, and Dukat mines, however. These increases in work-in-progress, accompanied by corresponding cash outflows, are expected to be reversed before year-end with cash inflows in the second half of 2012.

The company said it is firmly on track to deliver on its production guidance of more than 1m ounces of gold equivalent produced in 2012, thanks to the stronger than planned performance at Dukat and Khakanja.

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In the three months to June 30th the group produced 154,000 ounces of gold, up from 102,000 ounces in the corresponding period of last year. Silver production rose to 8.1m ounces from 5.0m ounces, while copper production weighed in at 1,624 tonnes, up from 1,768 tonnes last year.

In total, the group produced 298,000 ounces of gold equivalent in the second quarter, up 545 from 194,000 ounces in the same quarter of 2011.

Sales revenue in the quarter rose 19% to $376m from $315m a year earlier.

First gold was poured at the Amursk POX plant during the reporting period, while the Omolon project was also completed.

"We are now looking to achieve full capacity at the POX facility by year-end and to start-up Mayskoye as the next crucial steps on our growth path," revealed Vitaly Nesis, Chief Executive Officer of Polymetal.

JH