Polymetal is pleased to announce IQ 2006 results (period ending March 31st)

Printable version

According to IQ 2006 results, ore mining decreased by 8% to 596 th. tons compared to the same period in 2005. The ratio of ore mined by open-pit compared to underground mining in the reported period for 2006 was relatively unchanged from IQ 2005 figures. The volume of ore mined by underground mining increased by 4%; open-pit mining showed a drop of 11% compared with IQ 2005. During the current financial year, Polymetal expects a growth in the share and volume of underground mining (at present, the company has underground mining only at the Dukat deposit).

The volume of ore processed in the reported quarter increased by 9% to 444 th. tons. The positive dynamics were due to an increase in production capacity at the Khakanjinskoye (Khabarovsk Territory) plant and Vorontsovskoye"s stage II (Sverdlovsk region) plant.

Based on the results of IQ 2006, Polymetal"s gold production rose 13% (compared to IQ 2005) to 58 th. oz. Silver production decreased to 4,261 th. oz. (a 9% drop compared to IQ 2005).

The growth of gold production was due to increased production at stage II of the Vorontsovskoye plant. The negative dynamics for silver production for the quarter ending March 31st was primarily due to the lower average head grade of silver in the ore at the Lunnoye deposit (Magadan region).

Note: summary figures for all mines; total figures may not match the sum of individual figures because of rounding.

According to IQ 2006 results, gold sales rose by 13% to 53 th. oz. at an average weighted sales price of 550 $US/oz. (with a discount from the LME quotation). Silver sales demonstrated a 9% drop to 4,160 th. oz. due to a decrease in silver production in the reported quarter. The average weighted sales price for silver in IQ 2006 was 8.2 $US/oz. (with a discount from the LME quotation and deliveries under forward contracts with predetermined prices).

Operational review

Dukat

During the reported period, the company started re-equipping the underground mine. Due to the increase in ore being mined underground, the company plans to purchase additional tunneling equipment from Atlas Copco.

Lunnoye

During the reported period, the company completed designing a project for stage II of the Lunnoye deposit (underground mining).

In IQ 2006, Polymetal fulfilled work for starting to develop an underground road. The company plans to construct the first stripping adit in IIQ 2006. The company started to construct additional new 8th and 9th cyanidation containers to improve precious metals" recovery.

Polymetal completed preparing the design for mining the satellite Arylakh deposit. Combined underground mining works at the Lunnoye deposit and open-pit mining at the Arylakh deposit will provide the Lunnoye plant with 300 th. tpa of ore to process. In IQ of this year, the company purchased new loading and transport equipment; carried out initial works to expand the working camp and to construct the road to the Arylakh deposit. The first stripping and mining works (at Arlyakh) are planned for the IV quarter of 2006.

Vorontsovskoye

In the reported quarter, the company completed several steps to stabilize the work of plant 2, focused on increasing recovery rates.

To increase the recovery of metal using the heap leaching process (plant 1), the company launched a project to re-excavate old-year heaps by dragline.

Khakanjinskoye

To help boost production capacity to 600 th. tpa, the company completed the project and started reconstructing the unit of the plant focused on ore pretreatment and pounding, including introducing a new filtration tailing unit. This will increase the production capacity to 75 tons per hour. In IQ 2006, the company assembled and put into operation a SAG mill.

Exploration review

Polymetal started active exploration activities at 6 exploration properties to replace the reserves of producing mines and to expand the company"s reserves and resources by studying new prospective areas in different regions.

In IQ 2006, a newly established specialized exploration subsidiary started to survey Lunnoye"s north-west flank. At present, the company is preparing a program to survey the flanks of the Dukat deposit.

During the reported quarter, the company prepared a detailed program to study newly licensed fields - Katasminskaya and Galkinskaya in the Sverdlovsk region. Newly established in this region, the exploration company will start search works in IIQ 2006.

Polymetal completed advanced operating exploration of reserves at pit #2 and #3 of the Khakanjinskoye deposit (obtaining positive results) and continued to study the deep levels of the deposit.

In the reported period, the company made a decision to increase exploration expenditures in 2006 to 11.5 mln. $US (8.0 mln. $US in 2005). Polymetal may re-examine and increase investments in exploration this year, based on the first results from the newly licensed fields.

Highlights

January - Publication of JORC Code audit of Polymetal"s ore reserves and mineral resources;

January - 2005 year-end results - gold production increased 15% to 243 th. oz., silver production up 10% to 18,937 th. oz.;

February - Formation of specialized exploration companies in the Sverdlovsk and Magadan regions;

February - Export delivery of silver to LBMA for the purpose of the Kolyma refinery obtaining the LBMA "Good Delivery" certificate;

March - Agreement signed with the Omsukchan region (Magadan region) local administration for social-economic cooperation in the sum of RUR 20 mln. annually for four years;

March - Payment of the coupon yield on the last (6th) coupon and the retirement of the ruble denominated three year maturity bonds.

source: Investor Relations Department 

Next Previous

Back to all news