PJSC Polyus (MOEX — PLZL), the largest gold producer in Russia, announces its production guidance for 2017–2019 together with a dividend update. The Company reiterates its production guidance for 2017 to be in the range of 2.075–2.125 moz. The group expects total gold output to increase further to 2.35–2.40moz in 2018 and 2.8 moz in 2019. The Board of Directors of the Company (the «Board») has considered and preliminarily approved the dividends in the ruble equivalent of USD 354 million.
These dividends are including:
- a regular dividend in respect of the financial year ended 31 December 2016 totaling USD 254 million, representing 30% of the Company’s EBITDA for 2H 2016 in line with the dividend policy wherebydividends are paid on a semi-annual basis; and
- a special dividend totaling USD 100 million in connection with the successful sale by the group of its stake in the Nezhdaninskoye deposit. The asset was in an exploration stage via a JV with Polymetal and non-cash producing.
Natalka Operations Status Update
- Construction works at Natalka, the Company’s main greenfield project, areprogressing well with early pre-commissioning already well advanced. The primary crusher, the main SAG mill and the main ball mill have undergone a successful trial run. Polyus has finalized delivery of all process equipment. The installationof all gravity concentrators and electrowinning cells has beencompleted. The installation of thickeners is under way. The construction of power facilities and auxiliary infrastructure is ongoing. Major equipment vendors are on site to assist with the commissioning.
- Mining at Natalka was relaunched in January 2017 and 6koz of gold wasproduced at the 100 kt pilot plant in 2016.
- The Company anticipates commissioning the Natalka project by the end of 2017, followed by a ramp-up period to achieve the project’s design parameters.
- Following the ramp-up, annual production at Natalka is expected to reach c. 420–470 koz for the life of mine.
Brownfield Development Projects Update
- Krasnoyarsk Business Unit:
- Reconfiguration of Mill No. 1 to process higher-grade ore from Olimpiada deposit. This project was completed in September 2016 and underpinned theincrease of the processing capacity to 3.0 mtpa.
- An additional bio-oxidation circuit at Olimpiada’s Mills No. 1, 2 and 3 complex. The project is on track and BIO-4 is expected to be completed by the end of 2017, enabling Polyus to process all gold in concentrate into doré gold in-house.
- Expansion of the Blagodatnoye Mill to 8.0 mtpa of throughput capacity.In 2016, Polyuscompleted the first stage of the Blagodatnoye Mill capacity expansion to 8.0 mtpa. This was followed by technical works in 2017, designed to ensure the Mill consistently operates at the current throughput capacity level and to support a further increase in recovery rates.
- In addition, the Company is continuing the design works related to the heap leaching at Blagodatnoye. Commencement of the project in 2019 will enable Polyusto process up to 10 mtpa of stockpiled and in situ low-grade ore.
- Irkutsk Business Unit:
- An increase of the Verninskoye Mill’s capacity to 3.0 mtpa. The first stage of the project was completed at the end of 2016. This resulted in the stabilization of the throughput capacity at 2.5 mtpa. The target designed throughput capacity of 3.0 mtpa is expected to be achieved before the end of 2018.
- Yakutia Business Unit:
- An increase of the Kuranakh Mill’s capacity to 5.0 mtpa. With the first stage of the project being completed, the mill is currently operating at a throughput capacity of 4.5 mtpa. Further expansion of the processing capacity is planned, with completionexpected by the end of 2018.
- The heap leaching project at Kuranakh is expected to be completed in 2017, resulting in the processing of 1.5 mtpa of the deposit’slow-grade and out-of-balance ores, which were stockpiled during mining operations in previous years.