Thursday, July 27 2017 10:55
Emmanuil Mkrtchyan

Polymetal processed 246 thousand tons of ore for the first half of 2017 at Kapan mine

Polymetal processed 246 thousand tons of ore for the first half of 2017 at Kapan mine

ArmInfo. The Kapan Mining and Processing Enterprise (GOK), part of Polymetal  International plc, in the first half of 2017, processed 246 thousand tons of ore. Only in the second quarter the processing volumes were 132 thousand tons against 64 thousand tons for the same period last year. This is stated in the company's report on the production results of the II quarter of this year.

According to the report, the gold content per ton of ore was 2.6 grams, which is 17% higher than in the second quarter of 2016, the silver content was 45 grams. (+ 6%), copper - 0.32% (+ 18%) and zinc - 1.31% (-13%). At the same time, the gold recovery ratio was 86.3% (+ 3%), silver 84.9% (+ 1%), copper 91.6% (- 1%) and zinc90.8% (0%). As a result, gold production in the second half of the year was8.6 thousand ounces (for the first half-year - 14.4 thousand tons), silver - 0.1 million ounces (0.2 million tons), copper - 0.3 thousand tons (0.6 thousand tons) and zinc - 1.2 thousand tons (2.3 thousand tons). Almost for all extracted metals, the company showed more than double-digit growth of production volumes in the second half of the year: gold by 153%, silver by 128%, copper by 145% and zinc by 73%. 

During the first half-year, the mining deposit (underground penetration) operated by the company reached 7.723 meters. A total of 250 thousand tons of metal ore were mined (PGR) over the first half of the year. Only in the second quarter of the production volume amounted to 135 thousand tons, which is almost double the figures for the same period in 2016.

<Polymetal demonstrated excellent production results in the second quarter of 2017 and confirms the production plan for 2017. We are also pleased that our recent acquisitions, Komarovskoye and Kapan, show impressive results, " Vitaly Nesis, the  Polymetal Group Chief Executive Officer said.

According to the report, Kapan continues to demonstrate improvements in almost all indicators, including a significant increase in production volumes, which is associated with the continued introduction of measures to increase the productivity of the underground mine. Gold production during the quarter increased by 153% compared to the second quarter of 2016 due to the growth in processing volumes and significant improvement in content.

It is also reported that Valuation of reserves (VR) in accordance with the JORC Code and the combined operation plan for Kapan and Lichkvaz will be ready in the third quarter of 2017, as planned.  In total, the Polymetal group of companies produced 558,000 ounces of gold equivalent in the first half of 2017, which is 7% higher compared to year-on-year and corresponds to the production plan for 2017. The volume of sales of gold and silver during the second quarter increased by 29% and by 19%, respectively, compared to year-on-year, while revenue was $ 385 million, an increase of 26% compared to 2016. The time gap between production and sales has significantly decreased compared to the first half of the year.  Net debt increased slightly from $ 1.506 million as of March 31, 2017 to $ 1,583 million as of June 30, 2017, with the company paying final dividends for the fiscal year 2016 for $ 77 million ($ 0.18 per share) and actively investing in construction The Kyzyl project.

Polymetal confirms the production plan for 2017 in volume of 1.4 million ounces, as well as the forecast for cash costs of US $ 600-650 /ounce  of gold equivalent and total cash costs of US $ 775-825 /ounces of gold equivalent. Actual costs will depend on the dynamics of the ruble / US dollar exchange rate, which has a significant impact on operating costs in rubles. Polymetal will announce its financial results for the first half of August 29, 2017.

Recall that the company Polymetal began its activity in Armenia in 2015 with the acquisition of a polymetallic deposit Lichkvaz-Tey in the south, in the Syunik region. The company processes Lichkvaz ore at a concentrator in Kapan, where in April 2016 it acquired Kapan Mining Plant.  Polymetal is  one of the world's largest producers of primary silver, is one of the three leading gold mining companies in Russia. It conducts extraction of precious metals and geological exploration in Russia, Kazakhstan and Armenia. Polymetal Int independently carries out the whole complex of works on development of ore deposits - from geological prospecting to operation. The key element of the strategy is the creation of processing centers (hubs), which allow the most effective and responsible use of financial and human resources, contribute to achieving higher returns on invested capital. In November 2011, Polymetal  Int was the first Russian company to receive a premium listing on the London Stock Exchange (ticker POLY).

To note, the final beneficiary of about 27% of the share capital of Polymetal (LSE, Moscow Exchange:  POLY, ADR: AUCOY) is the Group of ICT of  Alexander Nesis, 13% of the company belongs to the Czech PPF Group NV Petr Kellner. In addition, about 1% of the authorized Capital controls the management of the company and directors, 19% - private individuals and 40% - individual investors.

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