PETROPAVLOVSK Petropavlovsk PLC ("Petropavlovsk", or the "Company" and, together with its subsidiaries, the "Group") today issues its Trading Update for the period from 1 January 2017 through 30 June 2017 ("the Period" or "H1 2017") in advance of its 2017 Half-Year Interim Results, which are expected to be published in the week commencing 11 September 2017.
H1 2017 Highlights and FY 2017 Outlook
Production19% yoy increase in H1 total gold production - c.232,400oz vs c.195,600oz in H1 2016
Production forecast for full year production of c.420,000 - 460,000oz reconfirmed
From the beginning of 2017, the Company moved to using gold poured as the definition for production.
Gold Sales19% yoy increase in physical volumes of gold sold - c.231,800oz vs H1 2016 c.195,400oz
5% increase in average realised gold price - US$1,255/oz, vs H1 2016 US$1,194/oz
As at 30 June 2017, the Group had outstanding hedging contracts for 500koz of gold at an average price of US$1,252/oz
Net Debt5% reduction in net debt as at 30 June 2017 - c.US$570m (preliminary unaudited) from US$599m as at 31 December 2016
Q2 2017 | Q2 2016 | H1 2017 | H1 2016 | |
Pioneer | 47.9 | 34.7 | 96.4 | 71.0 |
Pokrovskiy | 8.4 | 9.1 | 14.2 | 17.2 |
Malomir | 12.3 | 12.2 | 28.7 | 24.8 |
Albyn | 45.7 | 38.8 | 93.1 | 82.6 |
Total | 114.3 | 94.8 | 232.4 | 195.6 |
"The increase in production in first half was due to operational efficiencies. The operations are currently progressing in line with the Company's plan.
The wide range in the production forecast for the full year reflects the Company's conservative approach to the development of underground mines at Pioneer and Malomir.
The development of the POX plant is currently progressing on schedule and on budget. Further exploration of new discoveries made in the last year continues.
The Board's current focus is on the timely delivery of the Company's stated objectives: development of the POX Hub; the commissioning of underground mining operations; and the optimisation of the Company's capital structure.
A more detailed update on the Group's operational progress and outlook will be included in the interim results announcement."
Operations Report PioneerPioneer mining operations
Units | Q2 2017 | Q2 2016 | H1 2017 | H1 2016 | |
Total material moved | m3 '000 | 3, 812 | 4, 754 | 7, 206 | 9, 597 |
Ore mined | t '000 | 1, 895 | 788 | 2, 935 | 1, 656 |
Average grade | g/t | 0.78 | 1.05 | 0.90 | 0.94 |
Gold content | oz. '000 | 47.5 | 26.5 | 85.1 | 49.9 |
Pioneer processing operations
Resin-in-pulp (RIP) plant
Total milled | t '000 | 1, 707 | 1, 775 | 3, 349 | 3,372 |
Average grade | g/t | 0.78 | 0.69 | 0.79 | 0.74 |
Gold content | oz. '000 | 42.7 | 39.5 | 85.4 | 80.2 |
Recovery | % | 82.4 | 85.8 | 76.8 | 82.6 |
Gold recovered | oz. '000 | 35.2 | 33.8 | 65.6 | 66.3 |
Heap leach operations
Total stacked | t '000 | 359 | 281 | 359 | 281 |
Average grade | g/t | 0.51 | 0.53 | 0.51 | 0.53 |
Gold content | oz. '000 | 5.9 | 4.8 | 5.9 | 4.8 |
Recovery | % | 39.6 | 30.2 | 39.6 | 30.2 |
Gold recovered | oz. '000 | 2.3 | 1.5 | 2.3 | 1.5 |
Pioneer gold production - Dore | oz. '000 | 47.9 | 34.7 | 96.4 | 71.0 |
The main sources of low grade ore were pits of the Alexandra, Yuzhnaya and Promezhutachnaya zones. This ore was blended with lower grade material from stockpiles.
Heap leach operations commenced on schedule in April.
The development of the North East Bakhmut underground mine progressed as planned. Underground work during H1 totaled c.1,446m. The first ore was mined in June - c.3.5kt with an average gold content of c.2.7 g/t. As per the mine plan, production began at a low grade "bridge" area between North-East Bakhmut 2 and 3. Ore grades are expected to improve as mining moves into the higher grade North East Bakhmut 3 zone.
The significant increase in doré gold production in relation to gold recovered is mainly due to the successful implementation of measures for cleaning resin, and the resulting reduction in gold in circuit.
In H2, the main sources of low grade ore are expected to be Alexandra, Yuzhnaya and Andreevskaya West, with high grade ore to be mined from NE Bahkmut via underground.
The H2 gold production forecast for Pioneer is c.73,000-98,000oz.
Pokrovskiy Pokrovskiy mining operationsUnits | Q2 2017 | Q2 2016 | H1 2017 | H1 2016 | |
Total material moved | m3 '000 | 1 ,036 | 1,223 | 2 ,073 | 2,253 |
Ore mined | t '000 | 392 | 134 | 520 | 332 |
Average grade | g/t | 0.51 | 1.14 | 0.50 | 0.98 |
Gold content | oz. '000 | 6.4 | 4.9 | 8.4 | 10.5 |
Resin-in-pulp (RIP) plant
Total milled | t '000 | 450 | 451 | 888 | 899 |
Average grade | g/t | 0.47 | 0.65 | 0.44 | 0.62 |
Gold content | oz. '000 | 6.8 | 9.5 | 12.4 | 17.9 |
Recovery | % | 84.8 | 91.7 | 78.3 | 91 |
Gold recovered | oz. '000 | 5.8 | 8.7 | 9.7 | 16.2 |
Heap leach operations
Total stacked | t '000 | 246 | 193 | 246 | 193 |
Average grade | g/t | 0.40 | 0.4 | 0.40 | 0.4 |
Gold content | oz. '000 | 3.2 | 2.7 | 3.2 | 2.7 |
Recovery | % | 22.4 | 46 | 22.4 | 46 |
Gold recovered | oz. '000 | 0.7 | 1.2 | 0.7 | 1.2 |
Pokrovsky gold production - Dore | oz. '000 | 8.4 | 9.1 | 14.2 | 17.2 |
The Zeyskaya and Vodorazdelnaya zones were the main sources of low grade ore, which was blended with ore from stockpiles. This contributed to the decrease in processing recovery at the plant compared to H1 2016, due to the technological qualities of ores from stockpiles (initially scheduled), which were worse than expected.
Heap leaching began in April in line with the mining plan.
In H2, the main sources of low grade ore (c.15,000oz) are again expected to be Zeyskaya and Vodorazdelnaya.
Malomir Malomir mining operationsUnits | Q2 2017 | Q2 2016 | H1 2017 | H1 2016 | |
Total material moved | m3 '000 | 2, 772 | 1,957 | 5, 126 | 3,721 |
Ore mined | t '000 | 675 | 253 | 1, 434 | 390 |
Average grade | g/t | 0.68 | 1.2 | 0.78 | 1.2 |
Gold content | oz. '000 | 14.9 | 9.5 | 36.0 | 15.1 |
Resin-in-pulp (RIP) plant
Total milled | t '000 | 858 | 771 | 1, 652 | 1,554 |
Average grade | g/t | 0.71 | 0.8 | 0.78 | 0.7 |
Gold content | oz. '000 | 19.6 | 19.4 | 41.7 | 37.1 |
Recovery | % | 58.9 | 66.8 | 59.8 | 67.3 |
Gold recovered | oz. '000 | 11.5 | 13.0 | 24.9 | 25.0 |
Malomir gold production - Dore | oz. '000 | 12.3 | 12.2 | 28.7 | 24.8 |
The main sources of low grade ore were pits at the Quartzitovoye and Magnetitovoye zones. Ore from stockpiles also contributed to production.
Construction of an underground mine at Quartzitovoye 1 began in January 2017, after delays due to the late mobilization of equipment by the mining contractor. Since May, the contractor has worked at the scheduled capacity in accordance with the mining plan. In the first half of the year, c.697m of underground workings had been completed. In spite of the delay, the first ore was mined in June - a total of c.4.2kt with an average gold content of c.5.4 g/t.
The volumes of ore treated through the plant were in line with the plan. Recovery rates were lower than planned for H1 2016 due to ore from the Quartzitovoye 2 pit being more refractory than expected. This pit was completed in H1.
In H2, the main sources of low grade ore will be Quartzitovoye 1 and Magnetitovoye. High grade ore will be mined from underground at Quartzitovoye 1.
The Malomir production forecast for the second half of the year is c.20,000-30,000oz.
Albyn Albyn mining operationsUnits | Q2 2017 | Q2 2016 | H1 2017 | H1 2016 | |
Total material moved | m3 '000 | 7, 426 | 7,775 | 14, 942 | 16,009 |
Ore mined | t '000 | 1, 258 | 867 | 2, 633 | 2,530 |
Petropavlovsk plc published this content on 18 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 18 July 2017 06:23:09 UTC.
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