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Polyus' 2022 profit down on lower gold production and higher costs

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(Kitco News) - Polyus, Russia’s largest and the fifth largest gold producer globally, reported today that its total gold output in 2022 was 2,541 thousand ounces, down 6.5% compared to 2,717 thousand ounces produced in 2021.

The company said that the decrease in production was primarily driven by lower production of refined gold at Olimpiada due to temporary decline in grades in ore processed.

Total gold sales volumes in 2022 amounted to 2,423 thousand ounces of gold, down 11% compared to the previous year. This was primarily driven by lower production volumes at Olimpiada, Blagodatnoye and Natalka, it added.

Revenue for the full year amounted to $4,257 million, a 14% decrease year-on-year. This was driven by the decline in production volumes as well as by the lower average realised refined gold price compared to the previous year.

The group’s total cash costs for the full year 2022 rose by 28% to $519 per ounce, compared to 2021, reflecting lower average grades in ore processed at almost all hard-rock deposits. The consumables prices inflation, wage indexation and rouble appreciation have also negatively impacted the company’s cost performance in 2022, Polyus said.

Adjusted EBITDA in 2022 stood at $2,584 million, a 27% decrease compared to the previous year, due to lower gold sales volumes and higher total cash costs on a per ounce basis.

The company also reported profit for the period of $1,559 million (2021 – profit of $2,278 million) as well as basic earnings per share of $11.53 per share (2021 – basic earnings per share of $16.82 per share), and said that its Board has yet to make a final decision on the dividend recommendation for the full year 2022.

Polyus expects gold production for the full year of 2023 to reside within the range of 2.8 — 2.9 million ounces. The year-on-year increase in production is expected to be mainly driven by higher grades in ore processed at Olimpiada since Polyus will be mining rich gold-bearing zones of the Vostochny pit.

Polyus is the largest gold producer in Russia and a top 5 gold producer globally with one of the lowest cost profiles. The company also holds the world’s largest gold reserves with 104 million ounces of proven and probable gold reserves underpinning its strong growth profile.

The company’s principal operations are located in Krasnoyarsk Territory, Irkutsk Region, Magadan Region and the Republic of Sakha (Yakutia) and include 5 operating mines, alluvial operations and several advanced development projects.

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