Friday, September 8 2017 15:25
Emmanuil Mkrtchyan

Polymetal International plc group of companies for the first six months of 2017 invested in Kapan ore mining and processing enterprise $ 13 million

Polymetal International plc group of companies  for the first six  months of 2017 invested in Kapan ore mining and processing enterprise  $ 13 million

ArmInfo. The volume of  investments of the group of companies Polymetal International plc in  KAPAN MINING AND PROCESSING ENTERPRISE   for the first half of 2017  was $ 13 million. Investments were mainly related to the purchase of  equipment for underground mining and exploration in the vicinity of  the existing field, including drilling at the Lichkvaz-Teyskoye  field.

As reported in the company's semi-annual report on financial  results, the revenue from the operation of Kapan GOK for the first 6  months of 2017 was $ 20mln.  Indicators associated with cash costs  per ounce of gold equivalent are significantly  improved. The  implementation of the gold equivalent for the reporting period in  Kapan was 17 thousand rubles ounces, while the cash costs per ounce  of gold equivalent at the field in the first half of the year  amounted to 795US $ / oz compared to 1,186US $ / oz, having decreased  by 33%. In the second half of 2016 this indicator was equal to 865US  $ / oz. According to the report, the decrease in costs was due to the  production and financial recovery of the enterprise, as well as the  continued introduction of measures to eliminate bottlenecks in  underground mining.

It is noted that in total for the Group of companies, in the first  half of 2017, the cash costs per ounce of the realized gold  equivalent increased by 28% compared to the same period last year and  by 9% compared to the second half of 2016, amounting to US $ 656 per  ounce of gold equivalent. The continued growth of the Russian ruble  had a negative impact on the level of costs in dollar terms, which  was partially offset by sustained operating results at Varvarinskoye  and Svetly fields and Kapan mine.

At the same time, the cumulative cash costs per ounce of gold  equivalent in the I half of 2017 in Kapan mine amounted to 1,197 US $  / ounce versus 1,930 US $ / ounce in the first half of 2016, having  decreased by 38%. In the second half of last year, they amounted to  1,184 US $ / ounce.

According to the report, the so-called adjusted EBITDA for the Kapan  enterprise was $ 7 million by the end of the first half of 2017,  while at the end of the corresponding period of the past was  negative, at the level of $ 2 million.

To recall, Kapan Mining and Processing Combine , member of Polymetal  International plc, in the first half of 2017, processed 246 thousand  tonnes of ore. Only in the second quarter the processing volumes were  132 thousand tons, the gold content in tonne of ore was 2.6 grams,  which is 17% higher compared to the results of the second quarter of  2016, the silver content was 45 g. (+ 6%), copper - 0.32% (+ 18%) and  zinc - 1.31% (-13%). At the same time, gold recovery ratio was 86.3%  (+ 3%), silver 84.9% (+ 1%), copper 91.6% (-1%) and zinc 90.8% (0%).  As a result, gold production in the second half of the year amounted  to 8.6 thousand ounces (for the first six months - 14.4 thousand  tons), silver - 0.1 million ounces (02 million tons), copper - 0.3  thousand tons (06 thousand tons) and zinc - 1.2 thousand tons (2.3  thousand tons). Almost all recoverable metals showed in the second  half of the year more than double-digit growth in production volumes:  gold by 153%, silver by 128%, copper by 145% and zinc by 73%.

To recall, Polymetal company started operating in Armenia in 2015 by  acquiring shares in Lichkvaz, which has a subsoil use right in  respect of the Lichkvaz-Tey gold mine, which will produce 300,000  tons of ore per year after commissioning the underground mine. Ore  will be processed at Kapan mine, which the company acquired in April  2016.

Polymetal is one of the leading gold and silver mining companies in  Russia, Kazakhstan and Armenia. It was founded in 1998. Has 19 years  of experience in geological exploration, design, construction and  commissioning of large mining enterprises. Polymetal 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, final beneficiary of about 27% of the share capital of  Polymetal (LSE, Moscow Exchange: POLY, ADR: AUCOY) is the Alexander  Group of ICTs Nesis, 13% of the company belongs to the Czech PPF  Group NV Petr Kellner. In addition, about 1% of the authorized  capital is controlled by the management of the company and the  director, 19% by private persons and 40% by individual investors.

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