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(Kitco News) - Russia's Polymetal, a senior global gold and silver producer, announced on Tuesday that its Q1 2023 gold equivalent (GE) production was 345 koz, down 5% y-o-y and in line with plan.
The company said increases in production at Nezhda and Albazino (Kutyn) were offset by grade-driven production slump at Dukat as well as the build-up of concentrate inventory at Kyzyl and Varvara.
Polymetal added that revenue for the quarter was up by 19% y-o-y to US$733 million as sales channels stabilized, with reduction in stockpiles taking full advantage of higher gold prices.
According to a news release, net debt was broadly flat during the quarter as the release of inventory was offset by traditional seasonal payments for winter road deliveries, fuel supplies, and annual bonuses.
The company said it now expects POX-2 start-up in H2 2024 (previously Q2 2024), adding that Urals flotation and Prognoz (ore mining) are on track to launch in Q2 2023.
Polymetal reiterates its 2023 production guidance of 1.7 Moz of GE, and also maintains the full-year cost guidance of US$ 950-1,000/GE oz for TCC and US$ 1,300-1,400/GE oz for AISC.
“Q1 saw continued metal inventory release and positive revenue dynamics. Management is optimistic that the unwinding of saleable inventory will be substantially completed by the end of Q2 2023. Quarterly production was in line with our plan and we confirm our full-year guidance of 1.7 Moz of GE", said Vitaly Nesis, Group CEO of Polymetal.
Importantly, Polymetal announced today its intention to re-domicile to the Astana International Financial Centre (“AIFC") in Kazakhstan, which is subject to shareholder approval.
“Today, the board is asking for the approval of the shareholders to re-domicile the company from Jersey to the AIFC in Kazakhstan," the company said in a statement. “We believe this is a necessary and critical first step to preserve Polymetal's business continuity and restore shareholder value in the current environment."
Polymetal explained that the designation of Jersey as an “unfriendly jurisdiction" under Russian law places a significant restriction on the ability of the company to carry out customary corporate activity with its Russian operations and, moreover, places a significant risk on the continued existence of the group in its current form.
“The board is of the view that all the proposed resolutions in connection with the re-domiciliation are in the best interests of the company and its stakeholders, and encourage shareholders to vote in favour. If they are passed, it will allow the company to remove the burden of a number of significant restrictions and open the way for further value-generating corporate actions," said Vitaly Nesis, commenting on the proposed re-domiciliation.
Polymetal International is a senior global gold and silver producer with assets in Russia and Kazakhstan.
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