OREANDA-NEWS. On January 28, 2009 OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia's leading gold producer, released its operating results for the full year 2008. During the period under review the Group produced 38.0 tonnes (1 222 k oz) of refined gold, compared to 37.8 tonnes (1 214 k oz) produced in 2007, achieving the production target set for the year, reported the press-centre of Polyus Gold.

At the same time, the production of Dore gold (the metal before refining stage) showed a 1.9% increase from 37.6 tonnes (1 208 k oz) in 2007 to 38.3 tonnes (1 233 k oz) in 2008 .

In 2008 the Group’s production units moved 43.6 million cubic meters of total rock, compared to 47.9 million cubic meters of total rock moved in 2007.

The mining of ore in 2008 amounted to 6.6 million tonnes, compared to 9.4 million tonnes in 2007. In 2008, the Group processed 10.8 million tonnes of ore, compared to 10.7 million tonnes in 2007. During 2008, at Olimpiada mine in Krasnoyarsk region some volumes of ore were supplied to the mills from the stockpiles, which is the reason of the surplus of ore processed over the ore mined. In the beginning of the period under review 15.4 million tonnes of ore were stockpiled at Olimpiada mine.

The Group achieved its targets on the exploration front. The combined volume of drilling in 2008 amounted to 332.1 thousand meters, compared to 356.6 thousand meters in 2007. The decrease is a result of the completion of the fist stage of the long-term exploration programme, which included additional explorations works on a number of advanced-stage deposits. At the end of reporting period the company’s P&P reserves reached 74.1 million ounces, compared to 68.6 million ounces in 2007.

In 2008 all the produced gold was sold as well as the volumes remaining at the warehouse at the beginning of the reporting period in the amount of 0.12 tonnes (4 k oz), therefore the sales amounted to 38.1 tonnes (1 226 k oz), compared to 37.6 tonnes (1 210 k oz) in 2007. In 2008 all the volumes of the metal were sold on the domestic market, whereas in 2007 5.0 tonnes (161 k oz), or 13.3% of gold was exported. The gradual increase of sales in the domestic market and reduction of exports is primarily due to more favorable contracts terms concluded with Russian banks. 

According to the preliminary estimates, the Group’s capital expenses in 2008 amounted to USD443 million. This figure includes USD310 million spent on new projects and well as expansion and modernization projects, and innovations [what are these?]. Investments [in exploration subsidiaries?] into exploration amounted to USD67 million.

The Group’s cash, cash equivalents and investments in securities and other financial assets as at the end of the reporting period amounted to USD 668 million. As at December 31, 2008 the Company had no debt.

In 2008 Boris Zakharov was appointed as Deputy General Director, production, a new senior managerial position introduced in Polyus Gold in the period under review. Mr. Zakharov’s duties will cover coordination of the production process of all the Group’s business units.

During 2008 substantial progress was made in the domain of new project development. All targets were met for all the Group’s new projects.

Commenting on Polyus’ 2008 operating results, General director of Polyus Gold Evgueni Ivanov said: “We are pleased with the Group’s performance in 2008. All the targets set for the year were either met or exceeded. All the production units demonstrated stable performance, and the Group’s key mine – Olimpiada -- increased its output, in spite of the challenging period relating to the mine’s transition to sulfide ores.”