Polymetal: Q1 2023 production results

Polymetal International plc (POLY) Polymetal: Q1 2023 production results 10-May-2023 / 09:01 MSK Release time IMMEDIATE                            LSE, MOEX, AIX: POLY ADR: AUCOY Date 10 May 2023 Polymetal International plc Q1 2023 production results Polymetal reports production results for the first quarter ended March 31, 2023. “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. HIGHLIGHTS No fatal accidents occurred among the Group’s workforce and contractors in Q1 2023 (consistent with Q1 2022). Lost time injury frequency rate (LTIFR) among the Group’s employees decreased by 10% year-on-year (y-o-y) to 0.09. During Q1 2023, one medium-severity incident and two minor incidents were recorded. Q1 gold equivalent (“GE”) production decreased by 5% y-o-y to 345 Koz. Increases 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. 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. 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 now expects POX-2 start-up in H2 2024 (previously Q2 2024). 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. The cost guidance remains contingent on the Russian rouble and Kazakh tenge exchange rate dynamics. OPERATING HIGHLIGHTS 3 months ended Mar 31, % change1 2023 2022 Waste mined, Mt 44.1 55.0 -20% Underground development, km 23.8 23.9 -0% Ore mined, Mt 3.4 4.3 -21% Open-pit 2.4 3.3 -28% Underground 1.0 1.0 +1% Ore processed, Mt 4.5 4.1 +11% Average GE grade processed, g/t 3.2 3.5 -7% Production Gold, Koz* 296 306 -3% Silver, Moz 3.9 4.5 -13% Gold equivalent, Koz2 345 362 -5% Sales Gold, Koz 318 268 +19% Silver, Moz 6.4 4.4 +48% Revenue, US$m3 733 616 +19% Net debt, US$m4 2,428 2,393 +1% Safety    LTIFR (Employees)5 0.09 0.10 -10%    Fatalities 0 0 NA Notes: (1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release. (2) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. (3) Calculated based on the unaudited consolidated management accounts. (4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 31 December 2022. (5) LTIFR = lost time injury frequency rate per 200,000 hours worked. Company employees only are taken into account. (6) DIS – days lost due to work-related injuries. Company employees only are taken into account. PRODUCTION BY MINE 3 months ended Mar 31, % change 2023 2022 GOLD EQ. (KOZ)1 Kazakhstan 115 139 -17% Kyzyl 71 82 -13% Varvara 44 57 -23% Russia 229 223 +3% Albazino 65 56 +16% Dukat 50 66 -25% Omolon 46 40 +17% Nezhda 36 20 +79% Svetloye 18 19 -3% Voro 13 20 -23% Mayskoye 1 3 -69% TOTAL 345 362 -5% Notes: (1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. CONFERENCE CALL AND WEBCAST The Group’s management will discuss the Q1 2023 production results and the proposed re-domiciliation during the Analyst and Investor Briefing on Wednesday, 10 May, 2023, at 10:00 BST (12:00 Moscow time, 15:00 Astana time) at the etc.venues, 8 Fenchurch Pl, London EC3M 4PB. To join the webcast please follow the link: https://event.on24.com/wcc/r/4215044/57F84C60B29C3706B85933B505CAF446. Enquiries Investor Relations Polymetal [e-mail] Evgeny Monakhov [phone] (UK) Kirill Kuznetsov [phone] (Russia) [phone] (Kazakhstan) FORWARD-LOOKING STATEMENTS This release may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “should” or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the company’s control that could cause the actual results, performance or achievements of the company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the company’s present and future business strategies and the environment in which the company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the company’s actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. KYZYL 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 20.0 20.7 -3% Ore mined (open-pit), Kt 518 584 -11% PROCESSING Ore processed, Kt 560 551 +2% Gold grade, g/t 5.2 4.8 +9% Gold recovery 88.5% 87.7% +1% Concentrate produced, Kt 30.0 24.8 +21% Concentrate gold grade, g/t 86.7 91.6 -5% Gold in concentrate, Koz1 84 73 +14% Concentrate shipped, Kt 8.8 10.8 -19% Payable gold shipped, Koz 16 20 -19% Amursk POX Concentrate processed, Kt 14 14 +7% Gold grade, g/t 125.4 132.6 -5% Gold recovery 93.6% 94.6% -1% Gold produced, Koz 55 62 -11% TOTAL PRODUCTION Gold, Koz 71 82 -13% Note: (1) For information only; not considered as gold produced and therefore not reflected in the table representing total production. It will be included in total production upon shipment to off-taker or dore production at Amursk POX. At Kyzyl, reported gold production for the quarter was down by 13% y-o-y to 71 Koz due to persistent railway congestion in eastward direction. As a result, concentrate shipments to both Amursk POX and China have been delayed. The management is evaluating alternative shipment routes and approaches, including trucking, to resolve the backlog. Meanwhile, gold in concentrate increased by 14% on the back of improvements in grade, throughput, and recovery. The Company expects the annual throughput of the concentrator to reach 2.4 Mtpa this year. VARVARA 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 10.6 11.0 -3% Ore mined, Kt 782 957 -18% PROCESSING Leaching Ore processed, Kt 768 769 -0% Gold grade, g/t 1.4 1.7 -14% Gold recovery1 89.1% 89.6% -1% Gold production (in dore), Koz 34 45 -24% Flotation Ore processed, Kt 189 179 +6% Gold grade, g/t 2.2 2.8 -23% Recovery1 85.1% 88.5% -4% Gold in concentrate, Koz 10 11 -17% TOTAL PRODUCTION Gold, Koz 44 57 -23% Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore. At Varvara, Q1 gold production contracted by 23% y-o-y to 44 Koz on the back of the planned decline in Komar ore grade as well as substantial work-in-progress release in Q1 2022. At the flotation circuit, the output was also down driven by a lower share of high-grade third-party feed. ALBAZINO 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 7.3 7.2 +1% Underground development, km 4.3 4.6 -7% Ore mined, Kt 634 772 -18% Open-pit 437 569 -23% Underground 197 203 -3% PROCESSING Albazino concentrator Ore processed, Kt 441 453 -3% Gold grade, g/t 3.1 3.2 -5% Gold recovery1 83.5% 86.7% -4% Concentrate produced, Kt 33.0 32.3 +2% Concentrate gold grade, g/t 34.8 39.0 -11% Gold in concentrate, Koz2 38 41 -7% Kutyn Heap Leach Ore stacked, Kt 380 - NA Gold grade, g/t 2.5 - NA Gold production, Koz 24 - NA Amursk POX Concentrate processed, Kt 36.9 43.2 -15% Gold grade, g/t 33.3 44.3 -25% Gold recovery 96.5% 96.5% +0% Gold produced, Koz 41 56 -27% TOTAL PRODUCTION Gold, Koz 65 56 +16% Notes: (1) To concentrate. (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production after Dore production at the Amursk POX. At Albazino, gold production increased by 16% y-o-y to 65 Koz driven by the contribution from Kutyn Heap Leach launched in the late Q3 2022. Gold production from Albazino concentrate at Amursk POX alone fell by 27% y-o-y as the high-grade Anfisa open pit was fully depleted in H2 2022 resulting in the scheduled grade decline. Open-pit ore mined decreased as planned due to the completion of mining at Anfisa and Ekaterina-2. DUKAT OPERATIONS 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 0.5 0.9 -45% Underground development, km 11.0 11.6 -5% Ore mined, Kt 598 633 -6%     Open-pit 68 107 -36%     Underground 530 527 +1% PROCESSING Omsukchan concentrator Ore processed, Kt 491 515 -5% Grade Gold, g/t 0.3 0.7 -50% Silver, g/t 201 249 -19% Recovery1 Gold 82.6% 83.7% -1% Silver 85.9% 84.9% +1% Production Gold, Koz 4 9 -53% Silver, Moz 2.6 3.4 -23% Lunnoye plant Ore processed, Kt 119 115 +4% Grade Gold, g/t 1.5 1.9 -23% Silver, g/t 170 185 -8% Recovery1 Gold 91.5% 91.5% +0% Silver 92.9% 92.7% +0% Production Gold, Koz 5 6 -20% Silver, Moz 0.6 0.7 -6% TOTAL PRODUCTION Gold, Koz 9 15 -39% Silver, Moz 3.2 4.0 -20% Notes: (1) Technological recovery, includes gold and silver within work-in-progress inventory. Silver and gold production at Dukat decreased driven by declining grades after the high-grade open pit was fully depleted. There was no reported production from Primorskoye in the quarter, ore shipment will recommence following the start of sea navigation in June.  OMOLON 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 1.7 1.8 -5% Underground development, Km 2.8 3.0 -7% Ore mined, Kt 218 104 +110%     Open-pit 86 - NA     Underground 133 104 +27% PROCESSING Kubaka Mill Ore processed, Kt 213 212 +1% Grade Gold, g/t 6.7 5.8 +16% Silver, g/t 19 24 -21% Recovery1 Gold 93.7% 92.9% +1% Silver 77.6% 75.8% +2% Gold production, Koz 43 37 +17% Silver production, Moz 0.1 0.1 -15% Birkachan Heap Leach Ore stacked, Kt 55 - NA Gold grade, g/t 1.1 - NA Gold production, Koz 2 1 +37% TOTAL PRODUCTION Gold, Koz 45 38 +18% Silver, Moz 0.1 0.1 -14% Note:  (1) Technological recovery, includes gold and silver within work-in-progress inventory. In Q1, gold production at Omolon grew by 18% y-o-y to 45 Koz on the back of the increased share of higher-grade ore from the Burgali open pit in the Kubaka mill’s feed. First ore from the Burgali underground is expected in Q2. Underground mining at Tsokol was completed. Underground workings will be flooded in line with a pre-approved reclamation plan. NEZHDA 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 0.6 4.9 -87% Ore mined, Kt 137 604 -77% PROCESSING Ore processed, Kt 511 484 +5% Grade Gold, g/t 3.1 3.7 -17% Silver, g/t 33.8 30.5 +11% Recovery1 Gold 70.6% 73.2% -4% Silver 79.9% 74.7% +7% Gold in concentrate, Koz 36 42 -14% Silver in concentrate, Moz 0.5 0.4 +27% Concentrate shipped, Kt 23 1 NM Payable gold in concentrate, Koz 24 16 +51% Payable silver in concentrate, Moz 0.5 0.2 +93% Gold produced in dore, Koz 6 1   NM TOTAL PRODUCTION Gold, Koz 31 17 +77% Silver, Moz 0.5 0.2 +93% Notes: (1) Includes concentrate produced and stockpiled for future sale, and excludes low-grade material. Expected 90% gold payable ratio is applied. At Nezhda, gold grade and recovery declined as processing focused on previously stockpiled oxidised ore and mining was halted for almost entire quarter to reduce costs. However, total production of gold grew by 77% y-o-y to 31 Koz due to larger volumes of concentrate shipped to off-takers and processed at POX. Dore from gravity and low-carbon flotation concentrates was produced in-house at Dukat, Voro, and Amursk POX. SVETLOYE 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 1.7 1.6 +4% Ore mined (open pit), Kt 199 369 -46% PROCESSING Ore stacked, Kt 312 312 -0% Gold grade, g/t 2.6 1.9 +38% Gold production, Koz 18 19 -3% TOTAL PRODUCTION Gold, Koz 18 19 -3% At Svetloye, gold production marginally decreased y-o-y and stood at 18 Koz. Average grade at the heap leach was substantially higher relative to the low base of Q1 2022, when stacking of stockpiled low-grade ore from the depleted Lyudmila main pit took place. VORO 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt 1.7 3.4 -50% Ore mined, Kt 151 76 +99% PROCESSING CIP Ore processed, Kt 262 246 +6% Gold grade, g/t 1.9 2.1 -9% Gold recovery1 78.5% 85.7% -8% Gold production, Koz 11.9 18 -34% Heap Leach Gold production, Koz 1 1 +11% TOTAL PRODUCTION Gold, Koz 13 19 -35% Note: (1) Technological recovery, includes gold within work-in-progress inventory. Voro recorded a 35% y-o-y decline in production on the back of decreasing volumes of the higher-grade Pesherny ore in the CIP feed, while its lower recovery also depressed the average recovery at the CIP plant. Ore mining at Pesherny accelerated in anticipation of the launch of the Voro flotation plant which is scheduled for June 2023. Wet commissioning at Voro flotation has already commenced. MAYSKOYE 3 months ended Mar 31, % change 2023 2022 MINING Waste mined, Mt - 1.0 -100% Underground development, km 5.7 4.7 +21% Ore mined, Kt 162 195 -17% Open-pit - 13 -100% Underground 162 183 -11% PROCESSING Ore processed, Kt 226 230 -1% Gold grade, g/t 5.2 5.6 -8% Gold recovery1 92.0% 90.8% +1% Gold in concentrate, Koz2 35 38 -8% Amursk POX Gold produced in dore from concentrate, Koz - 2 -100% Gold produced in dore from carbon, Koz3 1 1 -28% TOTAL PRODUCTION Gold, Koz 1 3 -69% Notes: (1) To concentrate. (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon sale to off-taker or dore production at Amursk POX. (3) Gold produced from carbon at Amursk POX. At Mayskoye, gold in concentrate produced inQ1 recorded a y-o-y decrease due to processing of larger volumes of lower grade stockpiles. The Company expects production to normalise over the course of 2023. The expansion of the scope of sanctions to include additional materials and equipment under the tenth EU/UK sanctions package is expected to have an adverse impact on the Mayskoye backfill project. The estimated start-up will likely be delayed for up to 9 months from the initial plan of Q3 2024, as some critical items will need to be re-sourced from Asia. AMURSK POX 3 months ended Mar 31, % change 2023 2022 Concentrate processed, Kt 54 58 -7%   Albazino 37 43 -15%   Kyzyl 14 14 +7%   Nezhda 3 - NA Gold recovery 94.6% 95.5% -1% Average gold grade, g/t 58.7 64.9 -10% Average sulphur grade 15.5% 13.5% +15% Total gold produced1, Koz 99 120 -18%   Kyzyl 55 62 -11%   Albazino 41 56 -27%   Nezhda 3 1 +127%   Mayskoye - 2 NM Notes: (1) For information only. Already accounted for in production at operating mines. The decrease in POX production was attributable to the grade decline in feedstock sourced from Kyzyl and Albazino. The Company increased the volume of Nezhda concentrate processed, which resulted in a minor decrease in recovery rate. At POX-2, construction and installation works at the intensive cyanidation section and other parts of the downstream circuit were completed. Section commissioning is underway; start-up is expected in Q2 2023. The construction of metal frameworks for technological equipment in the High Bay steam conditioning section is nearing completion. The installation of piping and equipment in the CIL section continues. All construction and installation works at the oxygen station are expected to be completed by the end of May together with the start the complex commissioning. The Company now expects POX-2 start-up in H2 2024 (previously Q2 2024) as more time is required to findreplacements for sanctioned equipment in China.  SUSTAINABILITY, HEALTH AND SAFETY No fatal accidents occurred among the Group’s workforce and contractors in Q1 2023. Lost time injury frequency rate (LTIFR) among the Group’s employees stood at 0.09 (0.10 in Q1 2022), representing a 10% y-o-y decline,  with three incidents recorded (three in Q1 2022) related to hit by an object, falling rock, slipping and tripping while walking resulting in minor lost-time injuries. Additionally, one lost-time injury (person hit by an object) took place among contractors working on site, classified as minor (three in Q1 2022). Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

ISIN:	JE00B6T5S470
Category Code:	UPD
TIDM:	POLY
LEI Code:	213800JKJ5HJWYS4GR61
OAM Categories:	3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.:	242496
EQS News ID:	1628639

End of Announcement	EQS News Service