OREANDA-NEWS. April 12, 2013. Polymetal International plc (LSE: POLY) (together with its subsidiaries, including JSC “Polymetal” – “Polymetal”, the “Company”, or the “Group”) is pleased to announce the Group’s preliminary unaudited results for the year ended 31 December 2012.

OPERATING HIGHLIGHTS
Polymetal demonstrated strong operational performance throughout the year. Total gold equivalent production of 1,063 Koz was up 31% compared to 2011 and exceeded the original guidance of 1 Moz by 6%. These excellent results were driven by stable performance at all mature mines, with a notable improvement achieved at Dukat, and successful ramp-up at Omolon and Albazino.

Amursk POX, the first operating POX plant in Russia’s gold industry, poured first gold in 2012 and is undergoing the ramp-up period. Although certain problems were encountered during ramp-up and the process has been slower than planned, we expect the POX plant to reach full capacity by Q4 2013 as these problems are being fully addressed.

The Company is on track to deliver on 2013 production guidance of 1.2 Moz of gold equivalent production, with an off-take agreement signed for Albazino concentrate, and the Mayskoye concentrator approaching commissioning in April 2013 in accordance with the schedule.

Ore Reserves grew by 6% to 15.1 Moz of gold equivalent during 2012 while Mineral Resources (additional to Ore Reserves) grew by 35% to 18.7 Moz of gold equivalent. There has been a dramatic increase of the resource base at Albazino and potential new growth assets have been identified through successful exploration at Kutyn and Svetloye. These achievements indicate that Polymetal is on track to make development decisions on new asset development in H2 of 2013 – beginning of 2014.

FINANCIAL HIGHLIGHTS
Revenue in 2012 increased by 40% to USD 1,854 million compared to 2011 (“year-on-year”), driven mostly by a 33% increase in gold equivalent sold. In addition to robust production growth, metal sales in 2012 exceeded production for both gold and silver mainly due to destockpiling of concentrate inventories at Dukat.

Group total cash cost1 was USD 703/GE oz, and remained almost flat compared to the 2011 level of USD 701/GE oz as a result of intense management focus on cost control and despite external and inflationary cost pressures.  Strong operating performance, resulting in increased average grade processed and increased volumes, coupled with moderate Russian Rouble depreciation against the US Dollar, offset the combined impact of domestic inflation and adverse movement in the gold/silver price ratio.

All-in cash costs1 comprised USD 1,047/GE oz, a 15% decrease year-on-year, driven mostly by reduction in capital expenditure at our operating mines and stable total cash costs.

Adjusted EBITDA grew by 47% to USD 918 million, ahead of revenue growth. Adjusted EBITDA margin was up by 3 pp to 50%.

Net earnings were USD 401 million, up 38% year-on-year driven by the strong increase in adjusted EBITDA. Net earnings were negatively affected by additional tax provisions booked in respect of prior years and 2012 in the amount of USD 116 million, which are not expected to be recurring.

Pre-tax return on capital employed (ROCE1) was 22%, and after-tax return on equity (ROE1) was 20%, increasing from 18% and 18%, respectively, and marking the improved capital efficiency of the Group. Basic EPS was USD 1.03 per share, increasing 30% year-on-year;

A final dividend of USD 0.31 per share (a total of USD 119 million) in respect of FY 2012, representing 30% of net earnings is proposed by the Board in accordance with the new dividend policy;

Net operating cash flow more than doubled to USD 496 million while capital expenditures declined 24% to USD 351 million, resulting in a total positive free cash flow of USD 139 million in 2012;

Group’s liquidity profile remains comfortable with Net Debt / Adjusted EBITDA further reduced from 1.4 as at YE 2011 to 1.1 as at 31 December 2012, with 59% of borrowings being long-term.