27 July 2021

Polymetal reports solid production results for the second quarter and the six months ended June 30, 2021.

“In Q2, Polymetal delivered steady results. All producing mines made budget targets while mechanical completion and start of commissioning at Nezhda represented a key development milestone”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

  • There were no fatal accidents during the first half of the year (consistent with H1 2020) among Polymetal’s workforce and the Company’s contractors. Unfortunately, on July 18 a drilling contractor lost his life at the Saum open-pit mine, part of Voro operations. We send our condolences to the family and friends of our colleague.

  • The Company’s Q2 gold equivalent (“GE”) production decreased by 6% y-o-y to 339 Koz due to the planned grade declines at Kyzyl and Albazino. GE output for H1 was 714 Koz, a 1% decrease y-o-y.

  • Russia and Kazakhstan have entered the third wave of the COVID pandemic with record numbers of infections and deaths from the virus. At Polymetal, the epidemiological situation remains well controlled with less than fifty presently active cases, none at operating sites. COVID-related transportation restrictions have led to a material increase of Kyzyl concentrate in storage and transit to China and prompted the management to accelerate seasonal summer purchasing campaign across the portfolio. These factors drove a significant increase in working capital levels, which should normalise by the year-end.

  • Revenue for the quarter was up 6% y-o-y and reached US$ 681 million on the back of higher metal prices. H1 revenue increased by 12% y-o-y to US$ 1,274 million. Net debt increased by US$ 0.5 billion for the quarter to US$ 1.83 billion due to record final dividend payment of US$ 0.4 billion and working capital build-up.

  • Construction and development activities at Nezhda and POX-2 projects progressed on schedule amid continued tightness in the construction contractor market and COVID-related cross-border travel restrictions. Nezhda achieved mechanical completion of the key equipment. The project is on track to produce first concentrate in early November in line with the schedule.

  • Following the latest review by Vigeo Eris, a global leader in ESG assessments, data, research and analytics, Polymetal’s ESG overall score improved to 69 (out of 100), corresponding to the Advanced level of performance and placing Polymetal on the 2nd place among 43 industry peers1.

  • Polymetal confirms its 2021 production guidance of 1.5 Moz of GE and maintains the full-year cost guidance of US$ 700-750/GE oz for TCC and US$ 925-975/GE oz for AISC. The cost guidance remains contingent on the Russian rouble and Kazakh tenge exchange rate dynamics. The Company notes the continuous macro and COVID-related pressures affecting its capital expenditures. The Company continues to prioritize timely project execution and to incur additional costs to avoid project schedule slippage.

(1) For more information visit vigeo-eiris.com.        

OPERATING HIGHLIGHTS

 

 

3 months ended June 30,

% change1

6 months ended June 30,

% change1

 

2021

2020

2021

2020

 

 

 

 

 

 

 

Waste mined, Mt

52.5

39.2

+34%

98.0

79.1

+24%

Underground development, km

23.3

23.2

+0%

46.3

46.4

-0%

Ore mined, Mt

3.8

4.1

-8%

7.5

8.0

-6%

Open-pit

2.8

3.0

-7%

5.6

5.9

-6%

Underground

0.9

1.0

-9%

1.9

2.0

-5%

Ore processed, Mt

4.0

4.3

-7%

7.6

7.8

-3%

Average GE grade processed, g/t

3.5

3.8

-9%

3.6

4.0

-9%

Production

 

 

 

 

 

 

Gold, Koz

299

318

-6%

635

642

-1%

Silver, Moz

4.8

4.9

-1%

9.4

9.8

-4%

Gold equivalent, Koz2

339

358

-6%

714

723

-1%

Sales

 

 

 

 

 

 

Gold, Koz

315

324

-3%

595

595

+0%

Silver, Moz

4.3

5.2

-18%

8.0

9.9

-19%

Revenue, US$m3

681

641

+6%

1,274

1,135

+12%

Net debt, US$m4

1,827

1,321

+38%

1,827

1,351

+35%

 

 

 

 

 

 

 

LTIFR5

0.10

0.08

+25%

0.17

0.07

+143%

Fatalities

0

0

NA

0

0

NA

Notes:
(1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.
(2) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 31 March 2021 (for the three months period) and 31 December 2020 (for the six months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.

PRODUCTION BY MINE

 

3 months ended June 30,

%

change

6 months ended June 30,

%

change

 

2021

2020

2021

2020

 

 

 

 

 

 

 

GOLD EQ. (KOZ)1

 

 

 

 

 

 

Kyzyl

93

104

-10%

182

213

-14%

Varvara

51

41

+23%

110

84

+31%

Dukat

50

52

-3%

98

104

-5%

Omolon

50

46

+9%

96

88

+10%

Albazino

46

62

-26%

123

140

-12%

Svetloye

26

31

-15%

53

52

+2%

Voro

18

22

-17%

40

42

-5%

Mayskoye

4

1

NM

10

1

NM

TOTAL

339

358

-6%

714

723

-1%

Notes:
(1) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.

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CONFERENCE CALL AND WEBCAST

Polymetal will release the Group’s Q2 2021 production results on Tuesday, July 27.

The Company will hold a conference call and webcast on Tuesday, 27 July 2021 at 12:00 London time (14:00 Moscow time).

To participate in the call, please dial:

From the UK:
+44 203 984 9844 (local access)
+44 800 011 9129 (toll free)

From the US:
+1 718 866 4614 (local access)
+1 888 686 3653 (toll free)

From Russia:
+7 495 283 9858 (local access)

To participate from other countries, please dial any of the local access numbers listed above.

Conference code: 785872

To participate in the webcast follow the link: https://mm.closir.com/slides?id=785872.

Please be prepared to introduce yourself to the moderator or register.

A recording of the call will be available at the same numbers and webcast link listed above within an hour after the call and until 3 August 2021.

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