31 January 2024

Polymetal International plc (the “Company” or the “Group”) reports production results for the fourth quarter of 2023 and meets full-year production guidance of 1.7 Moz GE.

“In 2023, the Company managed to avoid business disruption and successfully met the original production guidance. In 2024, we expect stable operational results in Kazakhstan as well as positive investment decision on the Ertis POX”, said Vitaly Nesis, Group CEO of Polymetal International plc.

HIGHLIGHTS

  • No fatal accidents among the Group’s employees and contractors occurred in 2023 as well as no lost time injuries were recorded in Kazakhstan. Lost time injury frequency rate (LTIFR) among the Company’s workforce for the full year decreased by 24% year-on-year (y-o-y) to 0.07. Two serious and eight minor lost-time accidents were recorded in 2023 with one of them in Q4. Days lost due to work-related injuries (DIS) increased by 32% y-o-y to 1,156.

  • GE output for the full year was stable y-o-y at 1,714 Koz, including 486 Koz in Kazakhstan and 1,228 Koz in Russia. Quarterly production was down by 15% y-o-y because of Q4 2022 abnormally high production level driven by exceptional inventory unwind at Dukat and Nezhda.

  • During Q4, the Company continued to struggle with inventory conversion into sales in Russia. Significant tightening of concentrate exports regulations in Russia led to material accumulation in sea ports for concentrates from Kyzyl, Albazino, Nezhda, Voro and Mayskoye.

  • Revenue for FY 2023 grew by 8% to US$ 3.0 billion (US$ 0.89 billion in Kazakhstan and US$ 2.13 billion in Russia) thanks to higher gold and silver prices. Q4 revenue decreased by 16% y-o-y to US$ 0.9 billion on the back of high base in Q4 2022.

  • The Company expects full-year Total Cash Costs (“TCC”) and All-in Sustaining Cash Costs (“AISC”) to be below the announced guidance range of US$ 950-1,000/GE oz and US$ 1,300-1,400/GE oz respectively given the substantial positive impact of rouble devaluation on local-currency costs. CAPEX is expected to be at the lower end of the guidance range of US$ 700-750 million.

  • Net Debt was largely stable both q-o-q and y-o-y and stood at US$ 2.38 billion (US$ 0.17 billion in Kazakhstan and US$ 2.21 billion in Russia).

  • The Company has successfully secured a land plot for the Ertis POX project in the Pavlodar Special Economic Zone in Kazakhstan.

2024 OUTLOOK FOR KAZAKHSTAN BUSINESS

  • The Company expects its Kazakhstan assets to deliver relatively stable production at 475 Koz of GE.

  • Costs are estimated in the ranges of US$/900-1,000 GE oz for TCC and US$ 1,250-1,350/GE oz for AISC1. A y-o-y increase is expected mostly due to sharp increases in power and railway tariffs in Kazakhstan.

  • Capital expenditures are expected to be approximately US$ 200 million including US$ 60 million for Ertis POX.

Note:
(1) Based on 500 KZT/USD and 13% inflation in Kazakhstan.

HIGHLIGHTS

 

 3 months ended Dec 31,

%

change1

12 months ended Dec 31,

%

change1

 

2023

2022

2023

2022

PRODUCTION (Koz of GE) 2

Kazakhstan

145

164

-12%

486

541

-10%

Kyzyl

104

113

-8%

316

330

-4%

Varvara

41

51

-20%

169

211

-20%

Russia

296

357

-17%

1,228

1,178

+4%

 

 

 

 

 

 

TOTAL

441

522

-15%

1,714

1,720

-0%

SALES (Koz of GE)

Kazakhstan

142

181

-22%

459

533

-14%

Russia3

311

431

-28%

1,144

1,089

+5%

TOTAL

453

612

-26%

1,603

1,622

-1%

REVENUE4 (US$m)

Kazakhstan

291

309

-6%

893

933

-4%

Russia

584

730

-20%

2,132

1,868

+14%

TOTAL

876

1,039

-16%

3,025

2,801

+8%

NET DEBT5 (US$m)

Kazakhstan

 

 

 

171

277

-38%

 

 

 

Russia

 

 

 

2,210

2,117

+4%

 

 

 

TOTAL

 

 

 

2,382

2,393

-0%

SAFETY

LTIFR6 (Employees)

0.03

0.12

-76%

0.07

0.10

-24%

DIS7

1,156

877

+32%

Fatalities

    Employees

0

0

NA

0

0

NA

    Contractors

0

0

NA

0

0

NA

Average headcount

14,343

14,694

-2%

    Kazakhstan

3,202

3,219

-1%

    Russia

11,142

11,475

-3%

Notes:

(1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.
(2) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. Mayskoye production reporting approach was amended to record production as soon as the ownership title for gold is transferred to a buyer at the mine site’s concentrate storage facility. Previous periods were restated accordingly.
(3) Excluding ounces at Mayskoye, which ownership title has already been transferred to a buyer, but not shipped.
(4) Calculated based on the unaudited consolidated management accounts.
(5) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 September 2023 (for the three months period) and 31 December 2022 (for the twelve months period).
(6) LTIFR = lost time injury frequency rate per 200,000 hours worked. Company employees only are taken into account.
(7) DIS – days lost due to work-related injuries. Company employees only are taken into account.

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CONFERENCE CALL AND WEBCAST

The Company will hold a webcast on Wednesday, 31 January 2024, at 16:00 Astana time (10:00 London time).

To participate in the webcast, please register using the following link:

https://streamstudio.world-television.com/1451-2739-38946/en.

Webcast details will be sent to you via email after registration.

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