Polymetal International continues steady performance in Q2

Gold Project

Polymetal International plc (LON:POLY) has reported strong production results for the second quarter and the six months ended June 30, 2020.

“Q2 saw a continued steady performance of the Group”, said Vitaly Nesis, Group CEO of Polymetal. “We have been taking a range of measures aimed at protecting our employees and contractors in light of the COVID-19 pandemic, while allowing our operations and projects to proceed without interruptions or delays to date”.


  • There were no fatal accidents during the first half of the year within Polymetal and the Company’s contractors. LTIFR for the period improved by 70% year-on-year (y-o-y) to 0.07 as only four minor injuries were recorded.
  • The Company’s Q2 gold equivalent production (based on 120:1 Au/Ag ratio) increased by 2% y-o-y to 358 Koz driven by a strong performance at Kyzyl which compensated for the planned decline at Svetloye. GE output for H1 stood at 723 Koz, an increase of 4% y-o-y.
  • Revenue for Q2 increased by 30% y-o-y to reach US$ 641 million on the back of higher gold prices and sales volumes. H1 revenue amounted to US$ 1,135 million, up 20% y-o-y. There was a lag between gold production and sales due to Varvara concentrate sales, which is expected to close in H2 2020.
  • Polymetal generated significant free cash flow in the reporting period. Net debt was largely unchanged relative to Q1 2020 at US$ 1.69 billion, while the Company paid US$ 197 million of final dividends for FY 2019 or US$ 0.42 per share. As in previous years, free cash flow generation will be weighted towards the second half of the year on the back of seasonal working capital drawdown.
  • Construction and development activities at Nezhda and POX-2 progressed on schedule. COVID-related restrictions and cautionary measures have not slowed down execution progress of these projects.
  • The Company confirms its full-year 2020 production guidance of 1.5 Moz of GE. It also for now maintains its cost guidance, as depreciation of the Russia Rouble and Kazakh Tenge is currently counterbalanced by COVID-related costs. However, TCC, AISC and CapEx guidance will be updated along with H1 financial results on August 26.


Health and safety

  • No material COVID-19 outbreaks have so far occurred at our operations. Multiple employees tested positive for the virus with the vast majority of confirmed cases occurring during intra-shift breaks away from mines or during mandatory observatory period.
  • Health and safety of our employees and other people is our top priority. Strict precautionary procedures are maintained at all production sites despite gradual relaxation of state quarantine requirements in Russia. The procedures include daily temperature checks, regular medical surveillance and 14-day isolation of new shifts with COVID tests performed twice – first upon arrival and then before allowing to proceed to work on-site. Polymetal has organised isolated accommodation space for placement of potentially infected employees, enhanced hygiene protection in public spaces and increased control over disinfection and sterilisation measures. Adequate medical supplies are in place at all locations.
  • Personnel at off-site offices in Russia who report to work are tested on a rolling 2-week basis. Personal meetings and business trips are limited. Management offices in Kazakhstan continue to work remotely.
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Business continuity

  • Russian regions are relaxing lockdown measures in respect of retail and other activities. The scope and pace, however, vary across regions. In Kazakhstan, a new quarantine was introduced from the 5th of July after the country had started experiencing the second wave of infections. Continuous operations and strategic industrial companies (including Polymetal) in both countries are allowed to continue operating at regular capacity.
  • In both countries, Polymetal has had no interruptions either in production or supply chain. The vast majority of operating consumables and spares are sourced domestically and from China.
  • Sales and refining activities remain unaffected. Refineries in Russia and Kazakhstan continue to operate normally.

Assistance to communities

  • Polymetal continued to provide financial support to all regions of operations in Russia and Kazakhstan in order to prevent the spread of the COVID-19 pandemic. The Company has been purchasing critical medical equipment such as mobile X-Ray and anesthetic-respiratory machines, oxygen concentrators, ventilators, ultrasound machines, pulse oximeters, personal protection gear and other medical supplies for 25 regional and municipal hospitals, and volunteers. The total amount of donations in H1 amounted to RUB 129 million (US$ 1.8 million).
  • Polymetal remains committed to supporting local communities and investing in their health and safety especially during the pandemic. The Company will maintain its assistance to medical and dedicated volunteer institutions at all levels. 


Polymetal International will hold a conference call and webcast on Thursday, 23 July 2020 at 12:00 London time (14:00 Moscow time).

To participate in the call, please dial:

From the UK:

+44 330 336 9125 (local access)

0800 358 6377 (toll free)

From the US:

+1 646 828 8143 (local access)

800 263 0877 (toll free)

From Russia:

+7 495 213 1767 (local access)

8 800 500 9283 (toll free)

To participate from other countries, please dial any of the local access numbers listed above.

Conference code: 3221219

To participate in the webcast follow the link: https://webcasts.eqs.com/polymetal20200723.

Please be prepared to introduce yourself to the moderator or register.

A recording of the call will be available at +44 207 660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 800 2702 1012 (from Russia), access code 3221219, from 17:30 Moscow time Thursday, 23 July, till 17:30 Moscow time Thursday, 30 July 2020. Webcast replay will be available on Polymetal’s website (www.polymetalinternational.com) and at https://webcasts.eqs.com/polymetal20200723.

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