2012 Half Year Trading Update
Petropavlovsk PLC ("Petropavlovsk", the "Company" or, together with its subsidiaries excluding IRC Limited ("IRC"), the "Group") today issues its Trading Update for the period from 1 January 2012 to 30 June 2012 ("the Period" or "H1 2012") in advance of its half-year results, which are expected to be published on 23 August 2012.
HIGHLIGHTS
Total attributable gold production(1)for H1 2012
|
|
Q2 2012 |
Q2 2011 |
Variance |
H1 2012 |
H1 2011 |
Variance |
|
|
'000oz |
'000oz |
% |
'000oz |
'000oz |
% |
|
Pioneer |
59.7 |
80.0 |
(25%) |
125.3 |
116.6 |
7% |
|
Pokrovskiy |
22.7 |
24.0 |
(5%) |
37.4 |
41.9 |
(11%) |
|
Malomir |
33.5 |
17.3 |
94% |
66.1 |
37.9 |
74% |
|
Albyn |
16.2 |
0.0 |
n/a |
24.1 |
0.0 |
n/a |
|
Alluvial operations |
26.2 |
22.4 |
17% |
26.2 |
22.7 |
15% |
|
TOTAL |
158.3 |
143.7 |
10% |
279.1 |
219.1 |
27% |
Operations and gold production
Total attributable gold production for the Period was 279,100oz, a 27% increase compared to the same period in 2011 (219,100oz) and in line with the Group's increased production target for the full year;
Production during the second half of 2012 is expected to be higher than in the first half due to a greater contribution from the Group's seasonal heap-leach and alluvial operations and the expanded processing capacity at Pioneer and Albyn;
The Group reiterates its production target of 700,000oz for the full year.
Gold sales and costs
Gold sales during the period totalled 286,000oz, an 8% increase on the equivalent period in 2011 (266,000oz);
The average realised gold price for the period was US$1,639/oz, a 13% increase compared to H1 2011 (US$1,455/oz);
Operating costs for the Period for the Group's hard-rock mines (excluding Albyn) were marginally in line with H1 2011.
1. Total attributable gold production, as stated throughout this document, is comprised of 100% of production from the Group's subsidiaries. The Group has held a c.1.1% interest in Rusoro Mining Ltd since March 2009; no attributable ounces are included in the Group figures. The Company's direct and indirect interest in JSC "Pokrovskiy rudnik" (the holder of the Group's Pokrovskiy and Pioneer interests) is 98.61%. Cumulative gold production, as stated throughout this document, consists of gold physically recovered and gold in circuit. Accordingly, gold produced in the year consists of gold recovered during the period and adjusted for the movement in gold still in circuit.
Project development: Pioneer and Albyn expansion
On 4 June 2012, the fourth processing line at Pioneer mine was commissioned ahead of schedule, increasing the plant's design capacity by c.40% to c.6.6Mtpa;
On 10 June 2012, the second processing line was commissioned at Albyn ahead of schedule, doubling the plant's design capacity to c.3.6Mtpa.
POX processing hub
Construction work has been progressing according to schedule, with work on the oxygen plant at Pokrovskiy under way and key items of equipment on order;
The first delivery of equipment at the Pokrovskiy site is scheduled to take place in Q3 2012.
Exploration
The Group successfully continued exploration at and around its operating mines in the Amur region;
A new reserves and resource estimate in accordance with JORC Code (2004), including the results of further H1 2012 exploration work is being prepared for release on 23 August 2012, together with the Group's half-year results.
IRC Limited ("IRC")
On 12 July 2012, IRC issued its Q2 Trading Update which noted the following highlights:
- Kuranakh 2012 full year production targets reaffirmed;
- K&S project construction on track; processing plant foundations underway and electrical substation ready;
- Garinskoye DSO scoping study announced to realise near-term value for reduced capital expenditure;
- Molybdenum exploration and Bolshoi Seym transactions announced.
Commenting on the announcement, Peter Hambro, Chairman, said:
"We are delighted to look back on six months of record gold production at our mines, following yet another quarter of strong operational performance. Our track-record of building a successful multi-mine portfolio was strengthened further with the commissioning, ahead of schedule, of the fourth processing line at Pioneer and the second processing line at Albyn. The latter doubles the designed capacity at Albyn eight months after it commenced production. In parallel, our exploration programme is continuing to uncover further non-refractory reserves adjacent to our existing assets, ensuring that our growth trajectory is maintained in the years to come. We look forward to providing a further update on exploration in August.
Our strong performance this quarter supports our upgraded full-year production target of 700,000oz. Work has been progressing well on the pressure oxidisation ("POX") facilities for our planned commissioning at the end of 2013. At the same time, training has been continuing at our in-house facilities for the expert team which will be running the process in the years to come. Our focus for the second half of the year will remain on tight cost control and an increase in operational efficiencies."
