OREANDA-NEWS.  May 08, 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 production results for the first quarter ended March 31, 2013.

HIGHLIGHTS
The Company continued to deliver a stable operational performance in the first quarter of the year. Total gold equivalent production was 235 Koz, up 16% compared to the first quarter of 2012.

Metal sales lagged production due to the increase in metals at refineries during public holidays in Russia during the quarter. Total sales were USD 341 million, with an average realised gold price of USD 1,629/oz (down 4% year-on-year) and silver price of USD29/oz (down 7% year-on-year).
Quarterly gold production was 121 Koz, up 20% year-on-year driven mainly by additional contribution of gold production at the Amursk POX plant of 13 Koz during the period. Quarterly silver production was 6.4 Moz, up 14% year-on-year as a result of continuous improvement in grades and recoveries at Dukat.

The Company is making good progress on the implementation of corrective measures at the Amursk POX plant. While daily concentrate throughput continues to be limited before the planned 6-week shutdown in May-June 2013, a gradual increase in recoveries has been achieved, with the current performance in April of 81-82% compared to 75% in Q1 on average. In the meantime, Polymetal has successfully renewed the Albazino concentrate off-take agreement and will resume sales to 3rd-party off-takers in May.

Polymetal re-confirms its 1.2 Moz production guidance, after having significantly de-risked the achievement of the 2013 targets on the back of the timely start-up of the Mayskoye concentrator in April, successful renewal of the off-take agreement for Albazino, and Amursk POX ramp-up and remedial action plan progressing in accordance with schedule.

In response to material declines in gold and silver prices the Company has initiated the review of all discretionary capital spending including exploration projects.  The results of this review will be published together with the Q2 production results.  The projects likely to be delayed and/or re-engineered include Kutyn, Maminskoye, and the heap leach facility at Sopka.

“Thanks to an excellent performance at Dukat and the timely launch of the Mayskoye concentrator, we are on track to achieve our annual production guidance”, said Vitaly Nesis, CEO of Polymetal, commenting on the results. “Polymetal is well positioned to withstand the current adverse metal price movements given our strategic preference for higher grade assets and intense management focus on cost control and efficient capital allocation”.