TIDMPOG
RNS Number : 5082D
Petropavlovsk PLC
27 April 2017
27 April 2017
Peropavlovsk PLC
Q1 Production Results
Petropavlovsk PLC ("Petropavlovsk" or the "Company" or, together
with its subsidiaries, the "Group") is pleased to announce
production results for the quarter ended 31 March 2017.
Dr Pavel Maslovskiy, Chief Executive, comments: "These results
represent a strong start to 2017; generating solid operational cash
flows. In addition to accessing better than expected grades in the
Central Zone of the Albyn orebody, we are delighted to report that
technical upgrades across the RIP plants have been successful and
reiterate our focus on maximising operational efficiency and
productivity.
While these results support a level of production towards the
top end of our 2017 annual forecast, taking into account the
operational risks associated with the start of underground mining,
we have decided to maintain the current full year guidance and will
review again at our half year results.
As outlined at our Investor Day in March, our stable open pit
asset base provides the foundation with which we can build and
unlock value through our transformative growth project, the POX
Hub, while also bringing on additional near term cash flow from our
underground operations."
Summary:
-- Total gold production for the quarter was 118,046 ounces, an
equivalent 18% increase QoQ (Q1 2016: 100,406 ounces)(1)
-- Total gold sold for the quarter was c.118,000 ounces, a 17%
increase QoQ (Q1 2016: 101,000 ounces)
-- Average realised gold price of US$1,247/oz (including
US$19/oz effect from hedging), and increase of 7% QoQ
-- The Company is on track to achieve full year 2017 production
forecast of 420,000-460,000 ounces.
-- Total open pit ore mined for the quarter was 3,304,000
tonnes, a 15% increase QoQ (Q1 2016: 2,866,000 tonnes)
-- Total ore processed for the quarter was 4,013,000 tonnes
-- Implementation of a resin treatment facility to improve
operational efficiencies, specifically reduce the amount of
gold-in-circuit (GIC). Successful results achieved throughout the
quarter
-- Pioneer underground development progresses on schedule for
first production in Q2. Total development (including transportation
and ventilation declines) in the quarter was c.800m
-- Malomir underground experienced minor delays due to
contractor mobilisation. All personnel and equipment are now on
site. Development and ventilation portals complete. Total
development (including transportation and ventilation declines) in
the quarter was c.115m. First production remains on schedule during
H2 2017.
-- POX Hub construction is progressing on schedule and on
budget. Following a thorough welding tender process, two stainless
steel welding specialist contractors were appointed; one for the
vessel welding and one for piping. At the end of the quarter, the
vessel welding work was greater than 50% complete - scheduled for
completion Q3 2017. Piping welding is scheduled to commence H1
2017.
Q1 2017 Group Consolidated Operating Results
--------------------------------------------------------------------------------
units Q1 Q1 2016 FY 2016
2017
---------------------------- ------ -------------- --------------- ---------
Open Pit - Total material 000
moved m3 14,301 15,871 61,947
Open Pit - Total ore
mined kt 3,303 2,866 10,798
Underground - Total
developement m 808 - 675
Combined plant throughput kt 4,012 3,993 16,166
Avg weighted process
recovery rate % 77 84 86.1
Average weighted processed
grade g/t 0.85 0.85 0.91
Total heap leach (2) kt - - 1,141
Avg weighted leach
grade g/t - - 0.50
Avg weighted leach
recovery rate (%) % - - 51
Total gold produced
(koz) koz 118.0 100.4(1) 400.3(1)
Total gold sold (oz) oz 118.0 101.0 400.0
---------------------------- ------ -------------- --------------- ---------
Notes.
(1) 2017 gold production is defined as gold poured. Comparable
2016 gold production numbers are adjusted accordingly.
(2) Seasonal heap leach processing at Pioneer and Pokrovskiy are
not operational throughout winter months.
Operational Optimisations
Following the extensive tests and research completed in 2015 and
2016, a dedicated resin treatment facility has been established to
cost effectively improve the processing efficiency of the resin at
the Group Resin in Pulp plants.
The fundamental process involves:
-- a staged acid-alkaline treatment to dissolve calcium and
silica build up, cleanse the resin of other contaminants, including
releasing gold trapped in the resin.
-- a carbon sorption conditioning treatment of any recycled
water, has been introduced. This cleanses the recycled water of any
contaminants accumulated over time.
Implementation of these upgrades have been successful as
measured by positive contribution towards gold production
throughout the quarter. The positive results of this treatment
facility were expected and conservatively budgeted for within our
production guidance for 2017.
From the beginning of 2017, the Company moved to using gold
poured as the definition for production. This further bringing
inline production reported with production sold and thereby
reducing the impact of GIC.
Conference Call
Petropavlovsk will be hosting a conference call for analysts and
investors on Thursday 27(th) at 09.00 BST (London time). The dial
in details are below:
UK toll free number 0800 368 0649
UK Local number 020 3059 8125
International participant + 44 20 3059 8125
To join the call, please use:
Participant Password: Petropavlovsk
About Petropavlovsk
Petropavlovsk is one of Russia's leading gold mining companies.
As at 31 December 2016, the Company had produced approximately
6.3Moz of gold.
Petropavlovsk is in the construction phase of a state of the art
pressure oxidation facility to process the Company's substantial
refractory resource base. The Company's combined 3,605km(2) license
holding has untapped resource potential. The Company is a leading
employer and contributor to the development of the local economy in
the Amur region, Russian Far East, where it has operated since
1994.
Petropavlovsk is a shareholder (31.1%) of IRC Limited and is the
guarantor of the US$340 million project finance facility (US$234
million principal outstanding, as at 31 December 2016). IRC is a
vertically integrated iron ore producer and developer in the
Russian Far East and North Eastern China. IRC is listed on the Hong
Kong Stock Exchange (Ticker: 1029.HK).
Petropavlovsk is listed on the Main Market of the London Stock
Exchange (Ticker POG:LN)
Enquiries
For more information, please visit www.petropavlovsk.net and
www.ircgroup.com.hk or contact
Petropavlovsk PLC
Alexandra Carse
Grace Hanratty
+44 (0) 20 7201 8900
TeamIR@petropavlovsk.net
Maitland
Neil Bennett
James Isola+44 (0) 20 7379 5151
Petropavlovsk-Maitland@maitland.co.uk
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCPGUCWCUPMUAM
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