Polyus sees production slide in March quarter

A drop in ore grades processed at the Olimpiada and Blagodatnoye mines in Russia saw Polyus report lower gold production in the March quarter.
Polyus sees production slide in March quarter Polyus sees production slide in March quarter Polyus sees production slide in March quarter Polyus sees production slide in March quarter Polyus sees production slide in March quarter

Polyus' Olimpiada mine in eastern Siberia

Total gold output for Q1 amounted to 591,700oz, down 17% quarter-on-quarter and down 1% year-on-year.

Gold sales fell 32% qoq to US$1.017 billion, with the average sales price down 4% to US$1,788/oz.

Average ore grade processed at the company's flagship Olimpiada asset fell by 9% qoq and 6% yoy to 3.02g/t, while at Blagodatnoye it fell 14% qoq and 6% yoy to 1.65 g/t.

The company has previously flagged a slight fall in production in 2021 - with annual guidance of 2.7Moz down from 2020 output of 2.766Moz.

The reduction stemmed largely from Polyus falling behind with its stripping program at Olimpiada after it was forced to de-prioritise "non-core" activities at the mine in 2020 following the COVID outbreak. 

The company therefore needs to catch up with stripping activity at the asset to access higher grade ore zones.

For this year, however, Polyus will mainly be processing lower grade ore from stockpiles, with about 80% of total ore feed at Olimpiada made up of such material.

Elsewhere, Polyus said progress on its giant Sukhoi Log project was progressing on schedule, with a feasibility study due to be completed in 2022.

Shares in Polyus fell 2% in early trading but had recouped some ground by midday UK time. Shares in the company were valued at 101p, valuing the company at £20 billion.