 |
INTERVIEWS |
 Russian precious metals producer Polymetal is not expected to outperform Russia’s leading gold producer Polyus Gold in output until 2014, Vitaly Nesis, CEO of Polymetal, said in an interview to PRIME.
“In the year of 2014 our plan is to produce 1.4 million ounces in gold equivalent, this is about 44 tonnes. Of course, we won’t overtake Polyus in such a way, but it will be close,” Nesis said.
Particularly, Polymetal plans to more than double its annual gold output to 32–33 tonnes as compared to 13.8 tonnes produced in 2011. Silver production is expected to increase to 650–670 tonnes per year as compared with 618.96 tonnes produced in 2011. Copper production is expected to remain at the level of 2011, he said.
Speaking about the company’s operations in Russia, Nesis outlined several regions for comparison.
“The most comfortable conditions for work are in the Khabarovsk Region. The governments of the Sverdlovsk Region and the Chukotka Autonomous District are also quite constructive. At the same time, our presence in the Magadan Region is less than in other regions due to its ‘business climate,’ we don’t see the government’s interest in our investments,” he said adding that it would play an important role in choosing the region for our next project.
Answering the question on the company’s presence in the Magadan Region, Nesis said that Polymetal has three gold mills in the region which are provided with raw materials until 2023-2024.
“At the same time, it is already clear, that we will extend the timeline of the Kubaka gold mill's operations by at least 5-6 years because of exploration operations at the Prognoznoye and Burgali deposits,” he said.
In the Khabarovsk Region, the company continues to develop the Avlayakan-Kirankan project. Last year, the company processed 33,000 tonnes of ore from the Khakandzhinskoye deposit and produced 600 kilograms of gold.
“This year, we plan to reach the level of 60,000 tonnes of ore processing, and this will be 1 tonne of gold,” Nesis said.
Speaking about the possible construction of a new production facility in the region, Nesis said, that it will depend on the results of exploration operations. “Currently, we have 30 tonnes of gold reserves there, but we need 60 tonnes for construction of the facility. This can be implemented in two years, and we are striving for it, as it is technologically simple to mine gold there because of high grades.
In the Krasnoyarsk Region, Polymetal plans to set up a new joint venture with the local company Sibproyekt and Canada’s Polygon Gold, following the disposal of stake by South Africa’s AngloGold Ashanti in the previous joint venture. Russia’s Gazprombank is expected to focus on project financing.
In February, Polymetal acquired a 50% stake in Zoloto Taigi joint venture from its partner, AngloGold Ashanti for U.S. $20 million, thus taking full control over the company, which owns a license to develop the Veduga gold deposit in the Krasnoyarsk Region.
“We are interested in furthering the development of the project,” Nesis said. “We are not going to review the license, but don’t want to develop it alone, as it is small and is not located in our region. The project is good, with high gold grade,” he added.
“I think that we will start producing and selling oxidized ore already in the coming year. We have several potential buyers, which have enough capacities for processing. At the same time, we plan to start constructing an ore dressing plant to make concentrate and sell it to China.
Speaking about the Maiskoye project in the Chukotka Autonomous District, Nesis said that the company plans to launch the project in the last quarter of 2012.
“Since the acquisition of the deposit, we have already invested about $120-$130 million in the deposit, while the total budget stands at $170 million,” he said.
After the launch of the Maiskoye project, the company plans to process concentrate from the deposit at the Amursk metallurgy plant.
“While we are currently holding marketing for the concentrate from Maiskoye project; there is still no clear understanding, which terms of sale will be possible. The question is open, as it is cheaper to transport concentrate from the Albazino deposit to the Amursk plant, than sell it to China, while there is no difference in price, when we are speaking about concentrate from the Maiskoye deposit. Besides, processing of concentrate from the Maiskoye deposit at the Amursk plant is more expensive than the processing of concentrate from the Albazino, as it contains more sulphur, and it costs more money to neutralize it. Currently, we are holding talks with Chinese counteragents, and it may appear that we will constantly sell concentrate from Maiskoye to China”, Nesis said.
Speaking about new acquisitions outside Russia, Nesis said that the company is interested in Kazakhstan, Ukraine, Armenia and Azerbaijan.
“Kyrgyzstan was a matter of high discussions, but we decided to leave this issue. Currently, we are considering acquisitions in Armenia and Azerbaijan and already holding negotiations,” he said.
Total capital expenditures are projected at $230 million for 2012. “These are all our own funds,” he added.
Speaking about the company’s debt burden, Nesis said that the debt currently stands at about $900 million, with the major part accounting for long term liabilities. “We plan new borrowings only for refinancing the current debts,” he said.
Polymetal is Russia’s largest silver producer, which also operates in Kazakhstan. The company is owned by Jersey-registered Polymetal International.
End
21.03.2012 14:50
|
