Polyus posts 49% drop in free cash flow from operations for H122, gold production down 15%

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(Kitco News) – Russian company Polyus, one of the world’s largest gold mining companies, today announced that its total gold production in the first half of 2022 was 1,068,000 ounces, in down 15% compared to the 1,263,000 ounces produced in the first half of 2021.

The company said the decline was due to lower refined gold production across all deposits due to lower average grades in ore processed, adding that ore volumes mined were down 16% year-on-year for reach 28,149 thousand tonnes, reflecting lower volumes of ore mined. on all operating assets except Kuranakh.

Ore volumes processed amounted to 23,777 thousand tonnes, up 2% compared to the same period of the previous year, thanks to higher processing volumes at Olimpiada, Verninskoye and Natalka. The recovery rate decreased to 81.8%, compared to 82.1% in the first half of 2021.

Polyus added that total gold sales volumes in the first half of 2022 were 1,015 thousand ounces, down 19% from the corresponding period a year earlier, while revenues for the reference period amounted to $1,852 million, down 19% compared to the first half of 2021.

The group’s total cash costs (TCC) for the first half of 2022 increased 12% year-over-year to $435 per ounce. This reflects lower average grades in ore processed at Olimpiada, Blagodatnoye and Natalka, continued consumable inflation and wage indexation, the company said.

The company’s adjusted EBITDA for the current period was $1,215 million, down 26% from $1,638 million in the first half of 2021, due to lower sales volumes of gold and the rise in the CPR per ounce.

Polyus also reported that its profit for the first half of 2022 was $1,387 million, up 27% from the first half of 2021 ($1,093 million), and that adjusted net profit for the period s was $792 million, down 25% from the first half of 2021 ($1,051 million). The company’s net cash flow from operations was $701 million, down 49% from the first half of 2021 ($1,379 million).

The company noted that its net debt (including derivatives) to adjusted EBITDA ratio increased to 0.8x in the first half of 2022 from 0.6x in the second half of 2021, reflecting a higher net debt position and lower adjusted EBITDA over the last twelve months.

Polyus is the largest gold producer in Russia and one of the top 5 gold producers in the world with one of the lowest cost profiles. The company also holds the largest gold reserves in the world with 104 million ounces of proven and probable gold reserves.

The Company’s main operations are located in Krasnoyarsk Territory, Irkutsk Region, Magadan Region and Sakha Republic (Yakutia) and include 5 operating mines, alluvial operations and several advanced development projects.

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