DGAP-News: Polyus Finance Plc: Trading update for the third quarter of 2018
DGAP-News: Polyus Finance Plc / Key word(s): Miscellaneous
Polyus Finance Plc: Trading update for the third quarter of 2018
16.10.2018 / 09:12
The issuer is solely responsible for the content of this announcement.
Press Release 16 October 2018
PJSC Polyus
Trading update for the third quarter of 2018
PJSC Polyus ("Polyus" or the "Company") today releases its 3Q 2018 operating results.
3Q 2018 Highlights
Total gold output increased 15% to 691 thousand ounces compared to the previous quarter (2Q 2018: 602 thousand ounces). Year on year, volumes of doré gold and total gold output rose by 10% and 8%, respectively.
Volumes of ore mined amounted to 12,673 thousand tonnes, a 36% increase on the previous quarter and 28% increase year on year.
Volumes of ore processed rose to 10,382 thousand tonnes, up 5% on the previous quarter as the Company is continuing to expand processing capacities at its core assets.
Volumes of antimony contained in flotation concentrate amounted to 6.4 thousand tonnes, up 3% on the previous quarter.
Sukhoi Log: Polyus has launched the Pre-feasibility Study ("PFS") at Sukhoi Log. The drilling campaign remains in progress.
Estimated gold sales amounted to $821 million, up 20% compared to the previous quarter, with an estimated weighted-average gold selling price (incl. the impact from the SPPP) of $1,209/oz (down 7% on the second quarter of 2018).
Estimated net debt stood at $3,029 million as at 30 September 2018, compared to $3,208 million as at the end of the previous quarter and $3,077 million as at the end of 2017.
9M 2018 Highlights
Total gold output increased to 1,800 thousand ounces, compared to 1,580 thousand ounces during the respective period of 2017, representing a 14% increase. Doré volumes totalled 1,865 thousand ounces, up 16% compared to the prior-year period.
Volumes of ore processed rose by 38% year on year, to 28,746 thousand tonnes, driven by the ramp-up of the Natalka Mill as well as the expansion of existing operations.
Recovery rate stood at 80.9%, down 2.8 ppts from the prior-year period. Recoveries at the group level, adjusted for the Natalka operations, stood at 82.3%.
Estimated gold sales increased 8% year on year to $2,112 million, with an estimated weighted-average gold selling price (incl. the impact from the SPPP) of $1,275/oz, broadly in line with the respective period of 2017.
Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:
"Polyus delivered another robust operational performance in the third quarter. Our debottlenecking initiatives at Olimpiada, Blagodatnoye and Kuranakh are progressing well, each posting a gradual increase in throughput. We remain focused on addition of profitable ounces within the perimeter of existing operations as this is where we see the greatest opportunity for ongoing value-creation.
With 1.8 million ounces of gold produced during the nine months of 2018, the Company remains confident of delivering on its production guidance of 2.375-2.425 million ounces for the full year.
The ramp-up of production at Natalka, our key development project, is approaching completion. Being among the top largest deposits globally, Natalka is not only a cornerstone of our production growth, but also an affirmation of Polyus' team ability to bring operations on line in an efficient manner."
Health and safety update
The LTIFR rate for the third quarter of 2018 stood at 0.11, compared to 0.10 registered in the prior-year period.
The Company works continually to ensure that it has the appropriate health and safety practices in place and that all personnel receive the optimal training. Over the course of the third quarter of 2018, three HSE inspections took place in the Krasnoyarsk Business Unit, Natalka and the Power Group in order to ensure their compliance with HSE requirements. At Kuranakh, a pre-certification audit of the integrated Health & Safety management system was carried out and confirmed that there were no critical non-compliance issues
Lost Time Injury Frequency Rate (LTIFR) [i]
3Q'18
3Q'17
9M 2018
9M 2017
0.11
0.10
0.11
0.14
Consolidated operating results
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Olimpiada
283.0
276.0
3%
213.1
297.9
264.1
7%
772.1
709.4
9%
Blagodatnoye
110.1
102.0
8%
91.4
126.7
116.0
-5%
303.5
330.1
-8%
Verninskoye
59.7
53.3
12%
58.6
45.6
53.1
12%
171.6
160.1
7%
Alluvials
83.7
23.7
253%
-
29.8
85.0
-2%
107.4
115.9
-7%
Kuranakh
43.9
44.1
-1%
46.5
48.4
43.4
1%
134.5
123.1
9%
Natalka
43.4
39.8
9%
22.5
3.3
-
n.a.
105.7
-
n.a.
Refined gold, koz
623.8
538.9
16%
432.1
551.7
561.6
11%
1,594.8
1,438.5
11%
Flotation concentrate production, t
31,768
27,826
14%
35,760
13,620
39,892
-20%
95,354
71,342
34%
Antimony in flotation concentrate, t
6,408
6,219
3%
7,441
-
-
n.a.
20,068
-
n.a.
Gold in flotation concentrate, koz
67.4
63.1
7%
74.4
28.1
80.7
-16%
204.9
141.9
44%
Gold payable in concentrate, koz
49.8
46.7
7%
55.1
19.7
56.5
-12%
151.6
99.3
53%
Total gold output, koz
691.2
602.0
15%
506.5
579.8
642.3
8%
1,799.7
1,580.4
14%
Rock moved, kt
79,757
72,808
10%
67,134
63,256
61,898
29%
219,699
161,167
36%
Stripping ratio, t/t
5.3
6.8
-22%
6.6
5.3
5.2
2%
6.1
4.8
27%
Ore mined, kt
12,673
9,317
36%
8,821
10,065
9,915
28%
30,811
27,744
11%
Ore processed, kt
10,382
9,872
5%
8,492
7,809
7,299
42%
28,746
20,854
38%
Recovery rate, %
80.6%
80.6%
-
81.5%
82.7%
83.8%
-3.2ppts
80.9%
83.7%
-2.8ppts
Total doré & slime gold output, koz
698.8
627.6
11%
538.8
554.7
635.8
10%
1,865.2
1,607.1
16%
3Q 2018 Highlights
Total gold output in the third quarter of 2018 amounted to 691 thousand ounces, compared to 602 thousand ounces in the second quarter of 2018. The increase was mainly driven by higher seasonal production volumes at Alluvials and supported by solid performance at hard rock deposits.
Volumes of ore mined amounted to 12,673 thousand tonnes, up 36% on the previous quarter, primarily reflecting higher ore volumes mined at Olimpiada and Kuranakh.
Volumes of ore processed increased 5%, to 10,382 thousand tonnes, compared to the previous quarter, due to the ramp up of heap leaching operations at Kuranakh and higher processing volumes at Blagodatnoye.
Recovery rate stood at 80.6% and remained flat compared to the previous quarter. The recoveries at the group level, adjusted for the Natalka operations, amounted to 82.1%.
Flotation concentrate output amounted to 31.8 thousand tonnes, up 14% on the previous quarter. Volumes of antimony and gold contained in flotation concentrate increased 3% to 6.4 thousand tonnes and 7% to 67 thousand ounces, respectively.
9M 2018 Highlights
Total gold output for the first nine months of 2018 stood at 1,800 thousand ounces (including 205 thousand ounces of gold contained in concentrate from Olimpiada), compared to 1,580 thousand ounces in the prior-year period. This growth was driven by increased production volumes at Olimpiada and the start of operations at Natalka. Doré volumes totalled 1,865 thousand ounces, up 16% on a year on year basis.
Volumes of ore processed increased to 28,746 thousand tonnes, compared to 20,854 thousand tonnes in the first nine months of 2017, reflecting the implementation of expansion projects at Polyus' core assets as well as the launch of the Natalka Mill.
Recovery rate stood at 80.9%, down 2.8 ppts from the prior-year period, reflecting the on-going ramp up at Natalka and a decrease in recoveries at Olimpiada and Blagodatnoye. The recoveries at group level, adjusted for the Natalka operations, amounted to 82.3%.
Flotation concentrate volumes increased 34% compared to the prior-year period and reached 95.4 thousand tonnes. Volumes of antimony contained in flotation concentrate totaled 20.1 thousand tonnes.
Olimpiada
3Q 2018 Highlights
Total gold output was 350 thousand ounces.
Recoveries increased 0.2 ppts to 79.2%.
Volumes of antimony contained in flotation concentrate amounted to 6.4 thousand tonnes.
Gold output
Doré gold output in the third quarter of 2018 stood at 347 thousand ounces, up 2% compared to the previous quarter. Total gold output (refined and concentrate) grew by 3% compared to the previous quarter, to 350 thousand ounces, driven by higher production volumes of gold contained in concentrate, increased ore processed volumes and improved recoveries. On a year on year basis, doré gold output remained largerly unchanged, while refined gold production and total gold output increased 7% and 2%, respectively.
Mining works
Rock moved volumes totalled 33,234 thousand tones, a 12% increase on the second quarter of 2018.
Polyus continued upgrading its mining fleet at Olimpiada in the reporting period. The Company delivered two Komatsu bulldozers and two large wheel loaders to the site. In addition, the Company commissioned two TYHI WK-35 shovels. Four WK-35 shovels and 34 CAT 793 trucks with capacity of 220 t are currently operating on site, contributing to the higher volumes of rock moved.
Volumes of ore mined rose to 5,884 thousand tonnes, from 3,698 thousand tonnes in the previous quarter. In line with the mining plan, Polyus intensified mining activities at low-grade flanks of the Vostochny pit, which resulted in a 14% decline in average grades, to 3.48 g/t from 4.04 g/t in the second quarter of 2018.
Ore processing
Volumes of ore processed totalled 3,365 thousand tonnes, remaining almost flat compared to the previous quarter. This reflects the sequence of maintenance works, with Mill-3 undergoing a scheduled maintenance in August. The average grades in ore processed at Olimpiada remained almost in line with the average grades in the second quarter of 2018, at 4.12 g/t.
Polyus' technical team proceeds with optimization of the processing parameters at Mill-1. Installation of turbo-elevators drove a 6% increase in hourly throughput of Mill-1, compared to the previous quarter.
Recovery rate increased to 79.2% reflecting lower gold losses with flotation tailings. Polyus expects recovery rates to increase going forward as the Company proceeds with operational initiatives targeting recovery improvement, including the launch of the alkaline leaching circuit and flash flotation.
Volumes of antimony contained in flotation concentrate amounted to 6.4 thousand tonnes, a 3% increase on the previous quarter.
Mining works and ore processing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Rock moved, kt
33,234
29,691
12%
28,507
24,108
20,812
60%
91,432
51,958
76%
incl. stripping, kt
27,349
25,993
5%
25,088
20,960
17,777
54%
78,430
42,923
83%
Stripping ratio, t/t
4.6
7.0
-34%
7.3
6.7
5.9
-22%
6.0
4.8
25%
Ore mined, kt
5,884
3,698
59%
3,420
3,149
3,035
93%
13,002
9,035
44%
Average grade
3.48
4.04
-14%
3.79
3.90
4.19
-17%
3.72
4.15
-10%
Ore processed, kt
3,365
3,337
1%
3,155
3,140
3,490
-4%
9,857
9,302
6%
Average grade in ore processed, g/t
4.12
4.10
0%
4.17
3.94
3.93
5%
4.13
3.75
10%
Recovery, %
79.2%
79.0%
0.2ppts
80.0%
80.2%
81.4%
-2.2ppts
79.4%
80.9%
-1.5ppts
Doré gold (incl. gold in concentrate), koz
346.7
340.6
2%
318.0
307.1
347.4
0%
1,005.3
869.6
16%
Refined gold output, koz
283.0
276.0
3%
213.1
297.9
264.1
7%
772.1
709.4
9%
Flotation concentrate production, t
31,768
27,826
14%
35,760
13,620
39,892
-20%
95,354
71,342
34%
Antimony in flotation concentrate, t
6,408
6,219
3%
7,441
-
-
n.a.
20,068
-
n.a.
Gold contained in concentrate, koz
67.4
63.1
7%
74.4
28.1
80.7
-16%
204.9
141.9
44%
Total gold output, koz
350.4
339.1
3%
287.5
326.0
344.8
2%
977.0
851.3
15%
Blagodatnoye
3Q 2018 Highlights
Refined gold output amounted to 110 thousand ounces.
Volumes of ore mined totalled 1,512 thousand tonnes, compared to 1,445 thousand tonnes in the previous quarter.
Volumes of ore processed were 2,349 thousand tonnes, compared to 2,195 thousand tonnes in the second quarter of 2018.
Gold output
Doré gold output in the third quarter of 2018 was 111 thousand ounces, up 9% compared to the previous quarter, mainly reflecting higher processing volumes. Refined gold output amounted to 110 thousand ounces, up 8% on the previous reporting period. Doré gold output increased 7% compared to the third quarter of 2017 on the back of higher processing volumes.
Mining works
Volumes of rock moved increased 2% to 20,231 thousand tonnes compared to the previous quarter. Volumes of ore mined rose 5% to 1,512 thousand tonnes, compared to 1,445 thousand tonnes in the second quarter of 2018. The pit cutback at Blagodatnoye remains in progress. A 3% decline in average grade (1.54 g/t in the third quarter of 2018 vs 1.59 g/t in the second quarter of 2018) was the result of continuing mining activities at low-grade flank areas of the deposit, which will allow the Company to extract higher-grade material in later periods.
Ore processing
The average grade in ore processed was 1.66 g/t during the reporting period. Volumes of ore processed totaled 2,349 thousand tonnes, a 7% increase compared to the previous quarter, reflecting the sequence of maintenance works (maintenance of the first line of Mill-4 was carried out in May). Installation of turbo-elevators at SAG mills positively impacted the hourly throughput of Mill-4 and contributed to a strong performance in the reporting period.
The recovery rate increased to 87.7% from 87.3% in the previous quarter, owing to decreased gold losses at CIL due to lower arsenic content in ore feed.
Mining works and ore processing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Total rock moved, kt
20,231
19,760
2%
19,265
20,392
20,495
-1%
59,256
55,468
7%
including stripping, kt
18,719
18,315
2%
17,024
16,823
17,018
10%
54,058
46,187
17%
Stripping ratio, t/t
12.4
12.7
-2%
7.6
4.7
4.9
153%
10.4
5.0
108%
Ore mined, kt
1,512
1,445
5%
2,241
3,569
3,477
-57%
5,198
9,264
-44%
Average grade in ore mined, g/t
1.54
1.59
-3%
1.68
1.90
1.90
-19%
1.61
1.95
-17%
Ore processed, kt
2,349
2,195
7%
2,040
2,199
1,880
25%
6,584
5,963
10%
Average grade in ore processed, g/t
1.66
1.64
1%
1.74
2.06
1.93
-14%
1.68
1.97
-15%
Recovery, %
87.7%
87.3%
0.4ppts
87.2%
87.7%
88.0%
-0.3ppts
87.4%
87.9%
-0.5ppts
Doré gold, koz
111.1
101.7
9%
100.0
125.7
103.4
7%
312.8
332.0
-6%
Refined gold output, koz
110.1
102.0
8%
91.4
126.7
116.0
-5%
303.5
330.1
-8%
Verninskoye
3Q 2018 Highlights
Total gold output totalled 60 thousand ounces.
Recovery rate stood at 89.5%.
Gold output
Doré gold output was 54 thousand ounces, down 11% on the previous quarter, due to scheduled maintenance works at the Mill. Refined gold output amounted to 60 thousand ounces, compared to 53 thousand ounces in the second quarter of 2018, reflecting changes in gold in inventory at the refinery. Refined gold output rose 12% compared to the third quarter of 2017.
Mining works
Volumes of rock moved declined by 13% to 4,726 thousand tonnes, in line with the mining paln. Volumes of ore mined rose to 755 thousand tonnes, up 2% on the previous quarter, with grades remaining flat at 2.60 g/t. Implemetation of Mine-to-Mill programme along with the Wenco mining fleet management system continued to positively impact equipment productivity at Verninskoye in the reporting period.
Ore processing
In the reporting period, the average grade in ore processed stood at 2.64 g/t vs 2.63 g/t in the second quarter of 2018. Volumes of ore processed amounted to 712 thousand tonnes, down 11% on the previous quarter. This decline was driven by scheduled maintenance works at the Verninskoye Mill in September.
The recovery rate stood at 89.5%.
Mining works and ore processing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Total rock moved, kt
4,726
5,415
-13%
5,026
4,504
4,629
2%
15,167
13,874
9%
including stripping, kt
3,971
4,674
-15%
4,182
3,522
3,783
5%
12,827
11,109
15%
Stripping ratio, t/t
5.3
6.3
-16%
5.0
3.6
4.5
18%
5.5
4.0
38%
Ore mined, kt
755
741
2%
845
982
846
-11%
2,341
2,765
-15%
Average grade in ore mined, g/t
2.60
2.61
0%
2.63
2.06
2.36
10%
2.62
2.22
18%
Ore processed, kt
712
801
-11%
674
760
693
3%
2,187
2,029
8%
Average grade in ore processed, g/t
2.64
2.63
0%
2.64
2.57
2.61
1%
2.64
2.62
1%
Recovery, %
89.5%
89.5%
0.0ppts
89.4%
88.8%
88.7%
0.8ppts
89.5%
88.4%
1.1ppts
Doré gold , koz
54.2
60.6
-11%
51.0
55.8
51.5
5%
165.8
150.7
10%
Refined gold output, koz
59.7
53.3
12%
58.6
45.6
53.1
12%
171.6
160.1
7%
Alluvials
3Q 2018 Highlights
Gold in slime production amounted to 86 thousand ounces.
Refined gold output totalled 84 thousand ounces.
In the third quarter of 2018, Alluvial deposits produced 86 thousand ounces of gold in slime, up 158 % on the second quarter of 2018. The third quarter period is peak production season for the alluvial operations.
Refined gold output totalled 84 thousand ounces, compared to 24 thousand ounces in the previous quarter.
Sands washing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Sands washed, 000 m³
4,457
1,974
126%
-
1,092
4,999
-11%
6,431
7,250
-11%
Average grade, g/m³
0.60
0.53
13%
-
0.53
0.55
9%
0.58
0.55
5%
Gold in slime, koz
86.3
33.4
158%
-
18.4
88.9
-3%
119.7
127.1
-6%
Refined gold output, koz
83.7
23.7
253%
-
29.8
85.0
-2%
107.4
115.9
-7%
Kuranakh
3Q 2018 Highlights
Ramp up of the heap leaching operations.
Refined gold output was 44 thousand ounces, remaining flat to the previous quarter.
Gold output
Doré gold output in the third quarter of 2018 amounted to 55 thousand ounces, a 13% increase compared to the second quarter of 2018, driven by higher volumes of ore processed at heap leaching facilities. On a year on year basis, doré gold output has increased by 24%. Refined gold output amounted to 44 thousand ounces, in line with the second quarter of 2018, reflecting changes in gold in inventory at the refinery.
Mining works
Volumes of rock moved amounted to 8,477 thousand tonnes, up 5% on the previous quarter.
During the same period, volumes of ore mined increased 27% to 2,522 thousand tonnes compared to the previous quarter, as Polyus continued mining activities at the areas with a lower stripping ratio. Polyus increased the share of lower-grade material in ore mined in order to provide the leaching facilitites with a continous feed of material. Consequently, the average grade decreased to 0.97 g/t.
Ore processing
Volumes of ore processed at the mill stood at 1,303 thousand tonnes, in line with the previous quarter. Re Recovery rate at the Mill stood at 88.9%, remaining unchanged from the second quarter of 2018.
Heap leaching
Leaching activities were recommenced in May 2018 and reached design parameters in July 2018. 1,030 thousand tonnes were processed at heap leaching facilities in the third quarter of 2018, with average grade of 0.75 g/t. Doré gold output amounted to 9.2 thousand ounces.
Mining works and ore processing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Total rock moved, kt
8,477
8,103
5%
7,629
7,795
8,836
-4%
24,209
24,157
0%
including stripping, kt
5,955
6,115
-3%
5,995
6,371
7,138
-17%
18,065
19,603
-8%
Stripping ratio, t/t
2.4
3.1
-23%
3.7
4.5
4.2
-43%
2.9
4.3
-33%
Ore mined, kt
2,522
1,988
27%
1,635
1,424
1,698
49%
6,145
4,554
35%
Average grade in ore mined, g/t
0.97
1.07
-10%
1.14
1.25
1.16
-16%
1.05
1.16
-10%
Total ore processed, kt
2,333
1,646
42%
1,255
1,176
1,234
89%
5,234
3,525
48%
Mill
Ore processed, kt
1,303
1,308
0%
1,255
1,176
1,180
10%
3,866
3,471
11%
Average grade in ore processed, g/t
1.22
1.25
-2%
1.23
1.32
1.32
-8%
1.23
1.29
-5%
Recovery, %
88.9%
88.9%
0.0ppts
88.3%
88.6%
88.5%
0.4ppts
88.7%
88.4%
0.3ppts
Doré gold, koz
45.6
46.2
-2%
44.2
45.4
44.3
3%
136.0
126.4
8%
Heap-leach
Ore processed, kt
1,030
338
204%
-
-
54
n.m.
1,368
54
n.m.
Average grade in ore processed, g/t
0.75
0.75
0%
-
-
0.75
0%
0.75
0.75
0%
Recovery, %
72.3%
72.0%
0.3ppts
-
-
-
n.a.
72.3%
-
n.a.
Doré gold, koz
9.2
2.5
268%
-
0.6
-
n.a.
11.7
-
n.a.
Total doré gold, koz
54.8
48.7
13%
44.2
46.0
44.3
24%
147.7
126.4
17%
Refined gold output, koz
43.9
44.1
0%
46.5
48.4
43.4
1%
134.5
123.1
9%
Natalka
3Q 2018 Highlights
Volumes of ore mined amounted to 1,998 thousand tonnes, up 39% on the previous quarter.
Grades in ore processed stood 1.32 g/t.
Mining works
In the third quarter of 2018, volumes of rock moved totaled 13,088 thousand tonnes, while volumes of ore mined increased to 1,998 thousand tonnes, posting a 39% increase from the second quarter of 2018. In accordance with the mine plane, the average grades in ore mined increased to 1.05 g/t.
During the reporting period, the Company finished assembling three Komatsu E730 trucks, bringing the total number of operating Komatsu E730 trucks of 186 t capacity to 17 units. In addition, Polyus delivered a TYHI WK -20 excavator to the site, to be commissioned in October.
Ore processing
In August 2018, Polyus stopped capitalising borrowing costs and other directly attributable operating costs related tothe development of Natalka, as the Natalka Mill reached commercial production.
In the third quarter of 2018, the Company proceeded with the construction works at the Natalka Mill's auxiliary infrastructure, including earthworks at the fuel warehouse and finishing works for an assay laboratory. The Company is also developing wireless broadband at Natalka, which, along with mining fleet automation system, will allow to improve control of mining equipment.
The Company conducted scheduled maintenance works in July-August. The latter resulted in a temporary decline in ore treatment volumes compared to the previous quarter (1,623 thousand tonnes vs. 1,893 thousand tonnes). Over the course of the maintenance works, Polyus put the gyratory crusher MK-60-110E back into operation, in line with the previously outlined schedule. The average grade in ore processed was 1.32 g/t, an 18% increase on the previous quarter.
By the end of the third quarter, as the Natalka Mill reached its annualized design throughput run rate, the ball mill motor went out of order due to a deformation of the mounting face for the bearing on the rotor shaft. Consequently, the Company has switched to a shortened flowsheet, utilizing a one-stage grinding process at the SAG mill and therefore bypassing the ball mill, which resulted in lower throughput rates and recoveries. The Company anticipates putting the ball mill back into operation post repairs in November 2018 and expects the mill to revert promptly to operating at full capacity. In December, Natalka will undergo scheduled maintenance.
Mining works and ore processing
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Total rock moved, kt
13,088
9,828
33%
6,674
6,458
6,772
93%
29,590
15,308
93%
including stripping, kt
11,090
8,392
32%
6,011
5,517
6,020
84%
25,493
13,311
92%
Stripping ratio, t/t
5.5
5.8
-5%
9.1
5.9
8.0
-31%
6.2
6.7
-7%
Ore mined, kt
1,998
1,436
39%
663
942
752
166%
4,097
1,997
105%
Average grade in ore mined, g/t
1.05
0.98
7%
0.93
0.96
1.01
4%
1.00
0.95
5%
Ore processed, kt
1,623
1,893
-14%
1,368
536
2
n.m.
4,884
35
n.m.
Average grade in ore processed, g/t
1.32
1.12
18%
1.02
0.56
0.56
136%
1.16
1.31
-11%
Recovery, %
65.1%
65.5%
-0.4ppts
62.9%
37.9%
37.0%
28.1ppts
64.7%
74.2%
-9.5ppts
Doré gold, koz
45.8
42.6
8%
25.5
1.7
0.3
n.m.
113.9
1.5
n.m.
Refined gold output, koz
43.4
39.8
9%
22.5
3.3
-
n.a.
105.7
-
n.a.
Sukhoi Log
3Q 2018 Highlights
Polyus has entered the Pre-feasibility stage.
Current status
In the reporting period, Polyus launched the Pre-feasibility Study at Sukhoi Log, which is expected to be completed in 2020.
The Company is currently proceeding with the drilling campaign. As at the end of the third quarter of 2018, Polyus had completed approximately 50% of the planned 105 thousand meters of in-fill drilling, which will be followed by deep-level and flank drilling. Polyus had also launched hydrogeological and geotechnical drilling program in the reporting period.
The Company expects to have the Measured and Indicated Mineral Resources estimate by the end of 2018, and the Proven and Probable Mineral Reserves report - in 2020.
Financial update
Gold sales
In the third quarter of 2018, the Company sold a total of 699 thousand ounces of gold, a 32% increase on the previous quarter. Total gold sales include 92 thousand ounces of gold contained in the concentrate from Olimpiada.
Estimated gold sales in the reporting period increased to approximately $819 million, compared to $683 million in the previous quarter and $733 million in the third quarter of 2017.
Debt management
As of the end of the third quarter of 2018, the Company's gross debt decreased to $4,029 million, compared to $4,116 million as of the end of the second quarter. Polyus' debt portfolio is predominantly comprised of US dollar denominated instruments in regards to currency allocation. The Company's debt maturity profile remains smooth with limited debt maturities outstanding until the end of 2018.
As at 30 September 2018, the Company's estimated cash position was $1,000 million (30 June 2018: $908 million) and its estimated net debt position amounted to $3,029 million (30 June 2018: $3,208 million). Net debt amounts exclude liabilities under cross currency swaps related to RUB-denominated bank credit facilities and rouble bonds, in a total amount of $507 million as of the end of the third quarter.
In the reporting period, Polyus attracted a new credit line facility with Sberbank in a total amount of RUB 65 billion due in 2024 to refinance existing Sberbank credit line facility due in 2019. The funds under the new facility will become available for drawdown by maturity of the existing Facility in April 2019. The Company plans to repay the principal amount and liabilities under cross-currency swaps in the amount of approximately $1.0 billion in 2019, in line with the current maturity schedule.
Debt capital markets activities
In September, Polyus has invited holders of its notes due 2020, 2022, 2023 and 2024 (the "Series"). to tender those notes for purchase in the aggregate maximum consideration amount of $300 million. The purchase prices were determined pursuant to a Modified Dutch Auction. Polyus repurchased ca. $132 million in aggregate principal amount of notes across all the Series.
Dividends
In August, the Board of Directors of PJSC Polyus has recommended the dividends for the first six months ended 30 June 2018 in the amount of 131.11 Russian roubles per ordinary share. The dividend amount is equivalent to approximately 1.91 U.S. dollars per ordinary share, or 0.96 U.S. dollars per depositary share (with two depositary shares representing interest in one ordinary share).[1]
The total recommended dividend payout for the first half of 2018 will amount to 17,351,049,675.96 Russian roubles and correspond to $253.2 million, representing 30% of the Company's EBITDA for the first half of 2018, in line with the Company's dividend policy.
The dividend has been approved by the Company's Extraordinary General Shareholders' Meeting on 28 September 2018. The dividend record date is set on 18 October 2018.
2018
2019
2020
2021
2022
2023
2024
Debt maturities [ii], $ mln
3
8
697
448
614
1,313
985
Eurobonds
Bank loans
Convertibles
Local rouble bonds
59%
30%
5%
6%
3Q'18
2Q'18
Q-o-Q
1Q'18
4Q'17
3Q'17
Y-o-Y
9M'18
9M'17
Y-o-Y
Refined gold sold, koz
607
499
22%
447
515
561
8%
1,553
1,474
5%
Gold containedin concentrate, koz
92
31
197%
13
82
16
475%
136
88
55%
Gold payablein concentrate, koz
70
25
179%
9
58
12
482%
104
61
70%
Total gold sales, koz
699
531
32%
459
597
578
21%
1,689
1,561
8%
Gold sales
(incl. an SPPP effect), $ mln
821
683
20%
608
734
733
12%
2,112
1,951
8%
Weighted-average refined gold selling price (excl. SPPP), $/oz
1,204
1,300
-7%
1,336
1,275
1,279
-6%
1,273
1,254
2%
Weighted-average refined gold selling price (incl. SPPP), $/oz
1,209
1,300
-7%
1,336
1,275
1,279
-5%
1,275
1,269
0%
SPPP effect, $ mln
3
0
n.a.
0
0
0
n.a.
3
22
-88%.
Average LBMA price, $/oz
1,209
1,306
-7%
1,329
1,275
1,278
-5%
1,279
1,251
2%
Net debt, $ mln
3,029
3,208
-6%
3,079
3,077
3,151
-4%
3,029
3,151
-4%
Conference call
Polyus will host an analyst conference call on 16 October 2018 at 3 pm London time (5 pm Moscow time) to present and discuss the third quarter operating results.
To join the conference call, please dial:
Conference ID: 6018397
UK
+44 (0)330 336 9411 (Local access)
0800 279 7204 (Toll free)
USA
+1 646-828-8143 (Local access)
800-949-2175 (Toll free)
Russia
+7 495 646 9190 (Local access)
8 10 8002 8675011 (Toll free)
To access the replay, please dial:
Passcode: 6018397
UK
+44 (0) 207 660 0134 (Local access)
0 808 101 1153 (Toll free)
USA
+1 719-457-0820 (Local access)
888-203-1112 (Toll free)
Russia
810 800 2702 1012 (Toll free)
Enquiries:
Investor contact
Victor Drozdov, Investor Relations Director
+7 495 641 33 77
drozdovvi@polyus.com
Media contact
Victoria Vasilyeva, Director Public Relations
+7 (495) 641 33 77
vasilevavs@polyus.com
Forward looking statements
This announcement may contain "forward-looking statements" concerning Polyus and/or Polyus Group. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus' and/or Polyus Group's operations. Many of these risks and uncertainties relate to factors that are beyond Polyus' and/or Polyus Group's ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as of the date of this announcement. Polyus and/or any Polyus Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.
[1] Based on the currency exchange rate of the Central Bank of Russia of 68.5259 Russian roubles per 1 U.S. dollar as of 24 August 2018.[i] LTIFR is calculated based on a 200,000 work hours factor.[ii] Net of non-cash IFRS adjustments
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
16.10.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de
Language:
English
Company:
Polyus Finance Plc
16 Berkeley Street
W1J 8DZ London
United Kingdom
Phone:
+44 (0)203 907 4050
E-mail:
sergei.nossoff@pgil.co.uk
Internet:
http://polyus-finance.polyus.com/
ISIN:
XS1533922933
WKN:
A19CYF
Listed:
Regulated Unofficial Market in Stuttgart; London
End of News
DGAP News Service
733871 16.10.2018