Thursday, July 26 2018 18:51
Emmanuil Mkrtchyan

In H1 2018 Polymetal company processed 312 thsd tons of ore in Kapan  mining and processing enterprise    

In H1 2018 Polymetal company processed 312 thsd tons of ore in Kapan  mining and processing enterprise     

ArmInfo.The Kapan Mining and Processing Enterprise, a member of the Polymetal International plc group of companies, processed 312 thsd tons of ore in the first half  of 2018, versus 246 thsd tons in the same period last year. In Q2  alone the volume of production amounted to 158 thousand tons of ore,  versus 132 thousand tons in the previous year.

This is stated in the company's report on production results for the second quarter of  2018. According to the report, in Q2 the gold content per tonne of  processed ore was 2,0 grams, which is 23% lower compared to the  results of the quarter 2 of 2017, the silver content was 34 g.  (-25%), copper - 0.32% (+ 2%) and zinc - 1.48% (+13%). 

At the same time, gold recovery ratio was 84,7% (-1%), silver 85,2%  (+0%), copper 95,8% (+5%) and zinc 86,7% (-4%). As a result, in the  second quarter gold production totaled 7,7 thousand ounces (in  H1-14,2 thsd tons), silver - 0.1 million ounces (0,2 mln tons),  copper - 0.4 thousand tons (0,8 thsd tons) and zinc - 1.6 thousand  tons (3,0 thsd tons). According to the report gold production for Q2  decreased slightly year-on-year as the upper levels of the mine with  high-grade stopes were temporarily unavailable due to the official  enquiry of the fatal incident on March 2.  Ore mined volumes  continued to grow, reflecting the positive results of ongoing  improvement measures to debottleneck the underground mine, especially  as mine personnel completed a full transition from manual to  mechanized drilling. The processing volumes grew in line with mining. 

 Gold grades declined year-on-year as manual shrinkage with minimal  dilution was completely phased out due to health and safety concerns.  In the first 6 months of 2018, in the Shahumyan deposit operated by  the company 9,684 meters of mining work (underground penetration) was  conducted, versus 7,723 meters in the same period last year. In 6  months of 2018, 311 thousand tons of metal ore were mined versus 250  thsd tons in the same period of 2017. In the II quarter of 2018 alone  the volume of production amounted to 154 thousand tons, which is 14%  higher than the same period in 2017. "We achieved excellent operating  results in the current quarter, and we confirm the production plan  for the year," said Vitaly Nesis, Polymetal Group Chief Executive  Officer. 

  In overall, Polymetal produced 619 Koz of gold equivalent (GE) in the  first half of 2018, up 11% year-on-year and fully in line with  guidance. Stronger production in the 2H will be driven by traditional  seasonal concentrate de-stockpiling at Mayskoye, as well as first  contributions from the recently launched Kyzyl operation. Gold sales  for the quarter increased by 17%, which largely offset a 7% decline  in silver sales as the Company generated a total of US$ 435 million  in revenues, up 13% compared to previous year. During the quarter the  Company generated significant free cash flow. Net debt increased by  approximately US$ 75 million as the company paid US$ 129 million of  final dividends for FY2017 (US$ 0.30 per share). As in prior years,  the company expects significantly stronger free cash flow generation  in the second half of the year on the back of higher production  volumes and seasonal working capital drawdowns. The Company remains  on track to meet its FY 2018 production guidance of 1.55 Moz of gold  equivalent at TCC of US$ 650-700/GE oz and AISC of US$ 875-925/GE oz.  Due to the seasonality of revenues, both TCC and AISC are expected to  be at the higher end of the guidance range for the first half of the  year. The cost guidance remains contingent on the Rouble/Dollar  exchange rate dynamic that has a significant effect on the Group's  Rouble denominated operating costs. Polymetal will announce its  half-yearly financial results on 22 August 2018.

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. The Kapan mine was acquired by  Polymetal in 2016. The mine comprises a fully mechanised underground  mine with a current capacity of approximately 400 ktpa, the Lichkvaz  deposit, a conventional 750 ktpa flotation concentrator and various  infrastructure facilities. 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  foundation 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).

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