TIDMPOG
RNS Number : 3553F
Petropavlovsk PLC
14 June 2012
14 June 2012
Petropavlovsk Announces Updated Market Guidance for 2012
Petropavlovsk PLC ("Petropavlovsk" or the "Company", or,
together with its subsidiaries, the "Group") is pleased to announce
an update for the period from 1 January 2012 to date (the
"Period"), to coincide with a visit by analysts and investors to
the Company's main production sites in the Far East of Russia
starting on 16 June 2012.
Highlights:
n Production target increased to 700,000oz
n Cost expectations reduced
n New processing lines commissioned ahead of schedule
n 29% increase in gold production, 15% increase in the average
realised gold sales price and a 12% increase in total gold sold
during the first five months of 2012 vs. first five months of
2011
n Positive preliminary exploration results around existing
assets
Commissioning of two new processing lines ahead of schedule
n At Pioneer, the Group successfully commissioned its fourth
processing line, which has a capacity of 1.8Mtpa - 2.0Mtpa, on 4
June 2012;
n The second 1.8Mtpa - 2.0Mtpa processing line at Albyn was
successfully commissioned on 10 June 2012;
n Both new processing lines were commissioned ahead of the
scheduled Q3 start-up date and are expected to ramp up to full
capacity by July 2012; and
n The new processing lines are expected to increase plant
capacity at Pioneer by approximately 40% to 6.4Mtpa - 6.6Mtpa and
double plant capacity at Albyn to 3.6Mtpa - 4.0Mtpa.
Operational update
n The Group's flagship Pioneer mine delivered an outstanding
performance during the first five months of 2012, confidently
exceeding the proportion of its annual production target
attributable to the first five months of the year;
n Pioneer's strong performance was due to better recoveries and
higher grades than budgeted due to the inclusion of the high-grade
areas discovered in 2011 into the 2012 mine plan;
n Production from the Malomir and Pokrovskiy mines during the
first five months of the year was marginally ahead of plan;
n The first processing line at the Albyn mine, commissioned in
November 2011, ramped up to its full design capacity of 1.8Mtpa -
2.0Mtpa. The Group anticipates that the recent commissioning, ahead
of schedule, of the second 1.8Mtpa - 2.0Mtpa processing line should
enable Albyn to achieve its 2012 full year production target;
n The Company intends to issue its Trading Update for the period
from 1 January 2012 to 30 June 2012 on 25 July 2012, which will
include a full Q2 and H1 2012 production breakdown.
2012 production target increased to 700,000oz
n Due to the successful progress made at all hard-rock mines
during the Period, the Group is increasing its full year production
target by 20,000oz to 700,000oz.
Costs
n The increased capacity at Pioneer and Albyn is expected to
have a positive effect on unit costs during the year;
n Management is continuing its cost cutting programme, rolling
out the efficiency measures successfully implemented at Pioneer
during 2011 at its other mines;
n The recent weakness of the Russian Rouble against the US
Dollar has positively affected the cash cost of production;
n As a result, the Group does not currently expect an increase
in 2012 cash costs for its hard-rock mines by more than 15-20%
compared to 2011, revised from previous guidance of a 30-45%
increase. In 2011, Group total cash costs for hard-rock deposits
was US$586/oz and the Group-wide total costs for all assets
including alluvial operations was US$662/oz.
Capital expenditure
n The Company is constantly reviewing its capital expenditure
requirements for its gold projects. Although there is a possibility
of some variation between projects, the Company's total capital
expenditure budget for 2012 remains unchanged.
Average realised gold sales price and new financial measures
n The Group's average realised gold sales price for the first
five months of the year was US$1,652/oz, 15% higher than the price
achieved for the first five months of 2011 (US$1,438/oz);
n Total gold sold during the first five months of 2012 was
227,300oz, 12% higher than total gold sold during the first five
months of 2011 (203,300oz);
Exploration update
n The Group has continued to focus on exploration adjacent to
its existing mines. Work is on-going to reflect these results in
the Group JORC-compliant Reserves and Resources statement, which
the Company intends to publish together with the Group's half-year
results on 23 August 2012. Highlights from the Group's exploration
programme during the Period, which will be discussed at the Group's
forthcoming site visit, include:
n Albyn: Further encouraging results were received from
Elginskoye, a licence area situated 15km from Albyn and acquired by
the Group in 2010. A potentially mineralised zone has now been
traced by geochemical survey and trenches over a strike extending
28km. Within this zone, in addition to the mineralisation
previously reported by the Group in Q1 2012, high-grade
mineralisation has also now been identified, with intersections of
up to 6m at 12g/t Au. Grades ranging between 30-51g/t Au were
identified in selected samples. A further high-grade intersection,
with grades of 5.1-5.9g/t Au and an apparent thickness of 4-22m,
was discovered in a trench 1km to the north-west of the first
high-grade area;
n Pioneer: As a result of detailed exploration of the north-east
extensions of the NE Bakhmut zone, Group geologists are
preliminarily estimating the presence of an additional c.200koz of
non-refractory gold, at an average grade of 2g/t;
n Pokrovskiy: A preliminary estimate has indicated the presence
of a high-grade, non-refractory mineralised zone at Zheltunak, a
satellite deposit at Pokrovskiy. The zone has an average grade of
20g/t Au and intersections include a drill hole with 132g/t Au at
3.7m.
Enquiries:
+44 (0) 20 7201
Petropavlovsk PLC 8900
Alya Samokhvalova
Rachel Tuft
Merlin
David Simonson +44 (0) 20 7726
Ian Middleton 8400
Forward-looking statements
This release may include statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
release and include, but are not limited to, statements regarding
the Group's intentions, beliefs or current expectations concerning,
among other things, the Group's results of operations, financial
position, liquidity, prospects, growth, strategies and expectations
of the industry.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements are not guarantees of future performance
and the development of the markets and the industry in which the
Group operates may differ materially from those described in, or
suggested by, any forward-looking statements contained in this
release. In addition, even if the development of the markets and
the industry in which the Group operates are consistent with the
forward-looking statements contained in this release, those
developments may not be indicative of developments in subsequent
periods. A number of factors could cause developments to differ
materially from those expressed or implied by the forward-looking
statements including, without limitation, general economic and
business conditions, industry trends, competition, commodity
prices, changes in law or regulation, currency fluctuations
(including the US dollar and Rouble), the Group's ability to
recover its reserves or develop new reserves, changes in its
business strategy, political and economic uncertainty. Save as
required by the Listing and Disclosure and Transparency Rules, the
Company is under no obligation to update the information contained
in this release.
This information is provided by RNS
The company news service from the London Stock Exchange
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