Russian company Polymetal posts lower gold-equivalent production in second quarter, net debt climbs to $2.8 billion

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(Kitco News) – Russian Polymetal, one of the world’s leading producers of gold and silver, today announced that its quarterly gold-equivalent production fell 9% year-on-year to 326 Koz in the second quarter of 2022.

According to the company’s statement, a decrease in quarterly gold equivalent production was due to lower grades and a long planned maintenance shutdown at the Amourk POX and reduced production at Kyzyl and Albazino.

The company said it was reiterating its full-year production guidance of GE’s 1.7 Moz (1.2 Moz in Russia and 500 Koz in Kazakhstan), but Polymetal noted a risk of underperformance given persistent blockages and logistical constraints at Chinese ports and railways.

The company’s revenue for the quarter was down 36% year-over-year to $433 million, while first-half revenue was down 18% to $1,048 million ($605 million). million for Russia and $443 million for Kazakhstan).

Polymetal explained that this negative momentum was the result of lower sales volumes due to inventory accumulation, while the average realized price was slightly higher.

The company also said its net debt at the end of the second quarter was about US$2.8 billion, adding that a quarterly increase of US$0.8 billion was due to inventory accumulation. bullion and concentrates, the acceleration of equipment and spare parts purchases, the financing of critical subcontractors and suppliers, and the upward revaluation in U.S. dollars of ruble-denominated debt , driven by the significant strengthening of the ruble during the quarter.

“In the second quarter, we met our production targets and are on track to meet our full year guidance. International sanctions against Russia continue to have a significant impact on sales, purchasing and logistics. Management is fully focused on maintaining the operational and financial stability of the business,” commented Vitaly Nesis, CEO of Polymetal Group.

Polymetal International is a major global gold and silver producer with assets in Russia and Kazakhstan. On July 19, 2022, Polymetal announced that it was considering divesting its Russian assets to focus on its operations in Kazakhstan.






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