OREANDA-NEWS. February 03, 2014. Polyus Gold International Limited (LSE - PGIL, OTC (US) - PLZLY, “PGIL”, “Polyus Gold” or the “Company”), the largest gold producer in Russia, today releases its operating results for Q4 and the full year 2013.

Highlights
Record annual refined gold production from continuing operations of 1.65 million ounces (+5% year-on-year)

Sixth consecutive year of organic growth in gold production

2013 production was towards the higher end of the Company’s guidance (1.59-1.68 million ounces)

Significant increase in gold production at Olimpiada (+6%), Titimukhta (+12%) and Verninskoye (+95%)

Natalka development project re-sequenced to ensure funding stability, de-risk the construction schedule and the ramp up and identify additional opportunities for operational improvements

Estimated 2013 gold sales of USD 2.3 billion, a 12% decrease over 2012 amid a 17% decline in gold prices

Guidance for refined gold production for 2014 set between 1.58 and 1.65 million ounces.

Pavel Grachev, Interim Chief Executive Officer of Polyus Gold, commented:

“Amid an almost unprecedented decline in gold prices, Polyus Gold delivered another year of operational excellence with production increasing 5% placing us towards the higher end of the guidance. This enabled us to mitigate in part the 17% decline in gold prices and achieve sales of USD 2.3 billion. Our continued drive to reduce costs and enhance efficiency saw the sixth consecutive year of organic production growth.

Given the challenging market conditions, we have taken a prudent approach to the development of the Natalka project with the launch delayed by 12 months to summer 2015. The re-sequencing of the construction schedule will enable us to preserve funding stability while improving the project’s economics by optimising its capex and identifying further cost and operational efficiencies. We remain confident in the potential of Natalka, which will be Russia’s largest gold mine, to deliver significant shareholder value.”

Health and safety update
No work-related fatalities were reported in Q4 2013. In the full year 2013, regrettably, the Company reported three fatalities (reduced by half from 2012). Following an independent third-party health and safety audit conducted at the alluvial operations in the Irkutsk region, where these three fatalities took place, a comprehensive health and safety action plan was developed to be rolled out by the start of the production season in spring 2014.

Eight lost time injuries (LTI’s) were reported in Q4 2013. In 2013, the LTI frequency rate was 0.12, a 33% decrease from 0.18 in 2012. The LTI frequency rate has substantially declined for the second year in a row, down from 0.26 in 2011.

As part of its continuous effort to improve health and safety in 2013, the Company made its HSE reporting standards compliant with the Global Reporting Initiative G4 guidelines and with the standards of the International Council for Metals and Mining.

Additionally, a minimum standard for personal protective equipment and work uniform has been developed and is expected to be implemented in Q1 2014.

Operating results
In 2013, the Company produced 1,650 thousand ounces of refined gold from continuing operations, a 5% increase compared to 1,569 thousand ounces a year ago. The growth in total production was achieved as a result of higher gold output at Verninskoye, Olimpiada and Titimukhta. In Q4 2013, the Company produced 465 thousand ounces of refined gold, a 3% increase over the 450 thousand ounces produced in Q4 2012. The increase was due to a substantial growth in gold production at Verninskoye (+116%) and Titimukhta (+11%), compared to Q4 2012.

Polyus Gold moved 66 million cubic meters of rock in total in 2013 compared to 67 million cubic meters in 2012. In Q4 2013, the Company’s mines moved 17 million cubic meters of rock in total, in line with Q4 2012.

The average stripping ratio for the Company in 2013 was 1.8 m?/t (2012: 2.4 m?/t). In Q4 2013, the average stripping ratio for the Company was 1.8 m?/t compared to 3.0 m?/t in Q4 2012. A total of 30 million tonnes of ore was mined in 2013, an increase of 28% compared to 2012 (24 million tonnes). The increase was mainly due to higher mining volumes at Olimpiada and Verninskoye. In Q4 2013, a total of 8 million tonnes of ore were mined, a 53% increase over Q4 2012 (5 million tonnes).

In 2013, the Company processed 22 million tonnes of ore, which is 3% higher than a year ago. This was due to increased ore processing across the Company, with the exception of Olimpiada. In Q4 2013, the Company’s mines processed 6 million tonnes of ore, in line with Q4 2012.
With the exception of Kuranakh, recovery rates were up across the business in both Q4 and the full year 2013, most importantly, at Olimpiada (+3%) and Blagodatnoye (+4%) in Q4 2013.