Polyus ups 2018 guidance, Natalka to reach full capacity earlier than planned

JOHANNESBURG (miningweekly.com) – Russian gold major Polyus has exceeded its gold production forecast for 2017, and has increased its estimate for 2018.

The company increased its gold production by 10% to 2.16-million ounces in 2017, surpassing its guidance of 2.075-million ounces to 2.125-million ounces by 3%.

It was the fourth consecutive year the company had beaten its production estimate, Polyus CEO Pavel Grachev said in a statement on Tuesday.

He described 2017 as having been a “transformational year” for the company, noting that significant progress had been made with respect to debottlenecking all of the core operations, while at Kuranakh a heap-leach facility had been launched.

The higher full-year production was the result of increased throughput capacity at the core assets and higher grades. Average recoveries declined to 83.4%, owing to lower rates at Olimpiada, Blagodatnoye and Natalka, which is currently operational in a ramp-up mode. Adjusted for Natalka, recoveries at the group level amounted to 83.6% in 2017. An 8% year-on-year increase in volumes of ore processed was owing to higher volumes of ore treatment at Olimpiada, Blagodatnoye, Kuranakh and Verninskoye.

Polyus in December poured its first gold at Natalka, which is currently operating at 50% of the design capacity, processing between 14 000 t/d and 15 000 t/d of ore. The company plans to carry out scheduled maintenance at the new greenfield mine in April and May, following which it will gradually ramp up the mill to design parameters. This will occur in the second half of the year – a few months earlier than initially anticipated.

“Once this long-awaited project fully ramps up, Natalka will become a significant source of earnings and cash flow for the company,” Grachev said.

The group has increased its guidance from a 2.35-million- to 2.40-million-ounce range to 2.375-million- to 2.425-million-ounce range.

In the fourth quarter, Polyus produced 580 000 oz of gold, which is a 10% decrease on the third-quarter production. The decline was driven by a seasonal slowdown in output at the group’s alluvial operations.

Estimated fourth-quarter gold sales were flat quarter-on-quarter at $734-million. Full-year gold sales are estimated to be $2.68-million, compared with $2.43-million in 2016.

At the end of December, Polyus had an estimated cash position of $1.20-million and a net debt position of $3.08-million.