Russia's Polymetal reports strong Q1 2021 production results
(Kitco News) - Russia's Polymetal, one of the world's major producers of silver and gold, reported today that its gold equivalent (GE) production in Q1 2021 grew by 3% year-on-year (y-o-y) to 375 Koz.
The company said that all-time highest quarterly production from Varvara and strong performance across other assets offset the planned grade-driven decline at Kyzyl.
Revenue for the quarter increased by 20% y-o-y to US$ 593 million on the back of higher gold and silver prices. A traditional lag between silver concentrate production and sales at Dukat is expected to close in H2 2021 as well as a lag in gold sales primarily related to Dore from Kyzyl conсentrate.
Net debt decreased by US$ 29 million during the quarter to US$ 1.32 billion as Polymetal generated positive quarterly free cash flow despite seasonal inventory accumulation.
Construction and development activities at Nezhda and POX-2 projects progressed on schedule even amid continued tightness in the construction contractor market and COVID-related cross-border travel restrictions. Nezhda is scheduled to achieve mechanical completion on September 1, 2021 and produce first concentrate on November 1, 2021.
Polymetal confirmed its 2021 production guidance of 1.5 Moz of GE. It also maintains the full-year cost guidance of US$ 700-750/GE oz for TCC and US$ 925-975/GE oz for AISC.
"In Q1 2021, Polymetal delivered strong production, strong free cash flow, and steady progress across development projects", said CEO Vitaly Nesis. "COVID-related construction cost inflation remains a pressing concern despite gradual improvements in the epidemiological situation".
Polymetal International is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan.