Price has risen about 25% in the last month.
I can't find any positive news that would justify this and the situation in Ukraine appears to be getting worse.
Has anyone seen anything that would justify the rise ?
Y
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Polymetal POLY
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kissxofxdeath
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Re: Polymetal POLY
The full year results showed that they appear to be mostly unaffected by the war. Some of their costs have increased and they have had to find novel sources for their kit.
The value case for this stock seems to me to rest on a series of propositions:
1) The market cap is currently about half the Kazakhstan operations alone, assuming somehow that the Russia operations are worth nothing. Relatedly, the company made a noncash impairment charge last year, which they didnt really explain properly, which had an element of "kitchen sink" to it.
2) If they clear the overhang in stock H123, on top of the bumper 4Q22 sales, especially if gold stays anywhere near current levels (and UK inflation, for example, today announced to be higher than expected) then they will carry on throwing off astonishing amounts of cash this year. One would expect their costs also to stabilise as their new suppliers settle down and stop gouging them.
3) The redomicile idea crashed the share price in January by 30%. But it has to be voted on by shareholders and unless they find a mechanism to do that, why would they even bother trying? The depressed share price is predicated on political risk from Russia , presumably, but for as long as Putin is being careful in how he projects Russia to African and Chinese partners, the political risk of state nationalisation of assets seems to me to be pretty non existent, but maybe Im missing something
4) Its not obvious to me how long a company can remain on a trailing PER of 1.0x
5) The dividend cancellation spooked people but it means that the Capex for this year is paid for already - again, the stock is trading on a price to div ratio of less than 2 at the moment which is nuts.
6) Gold price looks firm and macro indicators suggest that will remain so for the foreseeable - this is a leveraged gold play with some political risk creating a buying opp imv
7) Anything to do with Russia is beyond the pale at the moment but the outer has to be the incredible cash being thrown off - i cant see another impairment charge this year - is that even plausible?
Thoughts most welcome. Its good to be back in the game. (I hold).
KoD
The value case for this stock seems to me to rest on a series of propositions:
1) The market cap is currently about half the Kazakhstan operations alone, assuming somehow that the Russia operations are worth nothing. Relatedly, the company made a noncash impairment charge last year, which they didnt really explain properly, which had an element of "kitchen sink" to it.
2) If they clear the overhang in stock H123, on top of the bumper 4Q22 sales, especially if gold stays anywhere near current levels (and UK inflation, for example, today announced to be higher than expected) then they will carry on throwing off astonishing amounts of cash this year. One would expect their costs also to stabilise as their new suppliers settle down and stop gouging them.
3) The redomicile idea crashed the share price in January by 30%. But it has to be voted on by shareholders and unless they find a mechanism to do that, why would they even bother trying? The depressed share price is predicated on political risk from Russia , presumably, but for as long as Putin is being careful in how he projects Russia to African and Chinese partners, the political risk of state nationalisation of assets seems to me to be pretty non existent, but maybe Im missing something
4) Its not obvious to me how long a company can remain on a trailing PER of 1.0x
5) The dividend cancellation spooked people but it means that the Capex for this year is paid for already - again, the stock is trading on a price to div ratio of less than 2 at the moment which is nuts.
6) Gold price looks firm and macro indicators suggest that will remain so for the foreseeable - this is a leveraged gold play with some political risk creating a buying opp imv
7) Anything to do with Russia is beyond the pale at the moment but the outer has to be the incredible cash being thrown off - i cant see another impairment charge this year - is that even plausible?
Thoughts most welcome. Its good to be back in the game. (I hold).
KoD
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yieldhog
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Re: Polymetal POLY
Kod,
Thank you for your thoughts on the company.
I agree with your positive comments and, about a month ago, did in fact add another tranche to my two previous purchases.
However, my first purchase was before the Russian invasion and hence I'm still underwater on my current total.
Clearly, there is still a huge poliyical risk for the company. One of the main concerns for me is the risk of a forced delisting from the LSE, which could be a problem for stock held in a SIPP. A few years ago I held shares in Mapeley Limited which delisted and proved to be a lengthy and expensive process to get the shares out of the SIPP. The situation with Polymetal is different but the consequences could have similarities.
The upside on POLY is very substantial and in my view the downside is limited, so I will stick with my current holding for now.
Thanks again for your comments.
Y
Thank you for your thoughts on the company.
I agree with your positive comments and, about a month ago, did in fact add another tranche to my two previous purchases.
However, my first purchase was before the Russian invasion and hence I'm still underwater on my current total.
Clearly, there is still a huge poliyical risk for the company. One of the main concerns for me is the risk of a forced delisting from the LSE, which could be a problem for stock held in a SIPP. A few years ago I held shares in Mapeley Limited which delisted and proved to be a lengthy and expensive process to get the shares out of the SIPP. The situation with Polymetal is different but the consequences could have similarities.
The upside on POLY is very substantial and in my view the downside is limited, so I will stick with my current holding for now.
Thanks again for your comments.
Y
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kissxofxdeath
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Re: Polymetal POLY
Hi Yieldhog,
Thanks to you also for your reply. Sorry to hear you are underwater. I only got interested after the war started because I am looking for stocks that are unfairly depressed because of perceived political risk which in my view is massively overstated for companies working in Russia itself. This stock is particularly attractive because such a large chunk of its production isnt even in Russia, never mind Ukraine. How often do you find a stock trading massively below the book value of only one part of its operations in a country which is perfectly stable as Kazakhstan appears to be!?
I am really not convinced that there is a "huge" political risk that you mention. I am curious as to what you think the risk is? Russia is at war with Ukraine but within Russia itself, isn't life basically normal? They have huge cash reserves that they built up before the invasion, the country has massive energy reserves, their currency is stable and no one on earth thinks that Ukraine is actually going to win. Not even the most rabid Washington hawks think that Russia can be defeated, at best they want a protracted stalemate. Meanwhile Ukraine is getting its a*se kicked and the artillery shelling ratio on the front line between Russia and Ukraine, already appalling, has nosedived even further recently with NATO people now openly talking about it being 2 years before fresh shells can be manufactured and delivered. This is an artillery war and a bunch of mercs are clearly winning against what is left of the Ukrainian army - by just sitting back and shelling them day after day. Nasty. But that's war I guess.
I take your point about delisting issues for SIPPS and maybe ISAs but, really, why would the LSE shareholders vote to redomicile? Is that going to fix the share price?! Even if they redomicile, that would have to mean that they find a legit depositary else no one is going to vote for the move if it means delisting. But, worst case, they redomicile, lose LSE listing and you have to sell in the Kazakhstan exchange and take the exchange rate risk on a stock that by any valuation could 7-10x its current price based on its cash flow. Bonkers. I have no idea why it is trading so low.
Well I do actually. Someone I know was kind enough to look up brokers notes on the company recently. Nothing. No one is covering it. A company that was in the FTSE 100 a bare year ago. And when you type in the ticker, big fat red warning letters flare up. The only real question for me is whether the general "solidarity" in not buying the stock is really going to carry on when they report continued unchecked large cash flow every quarter this year (assuming gold price stays solid). They’ve nearly cleared the overhang and they’ve got new buyers across Asia that replaced the ones that took fright and caused the overhang.
Their production costs have been kitchen sinked in the last annual report. Why wouldnt you, the price is in the toilet anyway so why not have sparkling numbers to report in 2023? To be fair, I can see that non cash impairment charge could have frightened off some investors, and who knows, maybe their costs in Russia are high and unlikely to fall soon? That’s the only thing I can think of that could depress the price much longer. But they could shut Russian operations down entirely and still be priced at half book based on Kazakh assets alone! Its so nuts.
Basically, I think this is a long term “crisis play” as PYAD from Motley Fool used to call it, where investors have taken fright and put the company in a big box marked “ScaryRussiaExposure” and run away. Lets see how long that actually lasts. Money talks. Especially cash money.
You mention downside is limited. I have to agree. These guys are ex FTSE 100, with all the due diligence that requires, with massive reserves across multiple sites in two different countries and a product that is in high demand and highly priced. If someone could explain the downside risk to me, I'd be all ears.
KoD
Thanks to you also for your reply. Sorry to hear you are underwater. I only got interested after the war started because I am looking for stocks that are unfairly depressed because of perceived political risk which in my view is massively overstated for companies working in Russia itself. This stock is particularly attractive because such a large chunk of its production isnt even in Russia, never mind Ukraine. How often do you find a stock trading massively below the book value of only one part of its operations in a country which is perfectly stable as Kazakhstan appears to be!?
I am really not convinced that there is a "huge" political risk that you mention. I am curious as to what you think the risk is? Russia is at war with Ukraine but within Russia itself, isn't life basically normal? They have huge cash reserves that they built up before the invasion, the country has massive energy reserves, their currency is stable and no one on earth thinks that Ukraine is actually going to win. Not even the most rabid Washington hawks think that Russia can be defeated, at best they want a protracted stalemate. Meanwhile Ukraine is getting its a*se kicked and the artillery shelling ratio on the front line between Russia and Ukraine, already appalling, has nosedived even further recently with NATO people now openly talking about it being 2 years before fresh shells can be manufactured and delivered. This is an artillery war and a bunch of mercs are clearly winning against what is left of the Ukrainian army - by just sitting back and shelling them day after day. Nasty. But that's war I guess.
I take your point about delisting issues for SIPPS and maybe ISAs but, really, why would the LSE shareholders vote to redomicile? Is that going to fix the share price?! Even if they redomicile, that would have to mean that they find a legit depositary else no one is going to vote for the move if it means delisting. But, worst case, they redomicile, lose LSE listing and you have to sell in the Kazakhstan exchange and take the exchange rate risk on a stock that by any valuation could 7-10x its current price based on its cash flow. Bonkers. I have no idea why it is trading so low.
Well I do actually. Someone I know was kind enough to look up brokers notes on the company recently. Nothing. No one is covering it. A company that was in the FTSE 100 a bare year ago. And when you type in the ticker, big fat red warning letters flare up. The only real question for me is whether the general "solidarity" in not buying the stock is really going to carry on when they report continued unchecked large cash flow every quarter this year (assuming gold price stays solid). They’ve nearly cleared the overhang and they’ve got new buyers across Asia that replaced the ones that took fright and caused the overhang.
Their production costs have been kitchen sinked in the last annual report. Why wouldnt you, the price is in the toilet anyway so why not have sparkling numbers to report in 2023? To be fair, I can see that non cash impairment charge could have frightened off some investors, and who knows, maybe their costs in Russia are high and unlikely to fall soon? That’s the only thing I can think of that could depress the price much longer. But they could shut Russian operations down entirely and still be priced at half book based on Kazakh assets alone! Its so nuts.
Basically, I think this is a long term “crisis play” as PYAD from Motley Fool used to call it, where investors have taken fright and put the company in a big box marked “ScaryRussiaExposure” and run away. Lets see how long that actually lasts. Money talks. Especially cash money.
You mention downside is limited. I have to agree. These guys are ex FTSE 100, with all the due diligence that requires, with massive reserves across multiple sites in two different countries and a product that is in high demand and highly priced. If someone could explain the downside risk to me, I'd be all ears.
KoD
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kissxofxdeath
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Re: Polymetal POLY
Thanks for the link - I am not persuaded that is a material political risk, although I note with interest that inflation in Kazakhstan is running at 20% according to the Polymetal annual report.
I also have to say that the Annual Report is one of the best Ive ever read in terms of detailed relevant information. Kudos to them for such an excellent level of detail and transparency.
I was particularly struck by the reason for the loss they book as a result of the non-cash impairment. It turns out that this was purely the result of a write down because the discount rate on their NPV went from 8% to 14% which of course had a dramatic impact on their asset valuation on the books. This is not to criticise the adjustment to the discount rate, but in terms of actual revenue, sales, EBITDA, net earnings and cash flow, its irrelevant.
I wonder if the 1Q announcement will include a reference to restarting the dividend. I can think of no better way to demonstrate that the share price is seriously out of kilter with the profitability of the company than issuing a dividend whose percentage of market cap would force people to sit up and take notice. Now that the overhang in sales is close to being cleared, and the new sources of kit are now settling down, the upside of the old policy of distributing 50% of net earnings in dividends could be reannounced. Again, this could have a salutary effect on people who have ignored this company since the invasion. The fact that the company could be back in a position to issue such dividends ought to be fairly revealing.
I am still curious as to what is depressing the share price in terms of political risk. Is it just that Russia is currently regarded as unstable? If you listen to most media sources, that would be a reasonable interpretation, and that could lead to refusing to invest in any company with Russia exposure I suppose. How sustainable is it, however, to have a company whose top line production appears to be unaffected, whose all in cash costs are predicted to be flat this year, and where gold is hovering around the $2,000 mark in a period of fairly high inflation. Granted if interest rates go up, that would be bad for gold and good for other currencies, but equally if inflation proves more stubborn than hoped, that must mean gold could test the ceiling it currently appears to be bumping up against.
Nonetheless, if this was trading where it was before the invasion, ie in the £12-18 range per share, I would be arguing that this is clearly a leveraged play on the gold price and to position oneself accordingly. I might even have some shares in the stock at those prices if the dividend policy were maintained. But at £3, this stock could multiply by 5x before those kinds of strategic conversations would need to take place. The numbers this company is throwing out are indistinguishable from pre-war so the only reason it is trading at £3 is political risk. There IS no other reason.
I'm very curious as to why, despite the invasion disruption, they still hit their predicted all in cash costs for 2022. Was the original forecast too high?
I'm also curious why they wont hedge their forward earnings which could cause a rerating. They could go back to their no hedge policy after that. The priority must be to rerate so a clear and predictable 12 month income would surely help with that.
KoD
I also have to say that the Annual Report is one of the best Ive ever read in terms of detailed relevant information. Kudos to them for such an excellent level of detail and transparency.
I was particularly struck by the reason for the loss they book as a result of the non-cash impairment. It turns out that this was purely the result of a write down because the discount rate on their NPV went from 8% to 14% which of course had a dramatic impact on their asset valuation on the books. This is not to criticise the adjustment to the discount rate, but in terms of actual revenue, sales, EBITDA, net earnings and cash flow, its irrelevant.
I wonder if the 1Q announcement will include a reference to restarting the dividend. I can think of no better way to demonstrate that the share price is seriously out of kilter with the profitability of the company than issuing a dividend whose percentage of market cap would force people to sit up and take notice. Now that the overhang in sales is close to being cleared, and the new sources of kit are now settling down, the upside of the old policy of distributing 50% of net earnings in dividends could be reannounced. Again, this could have a salutary effect on people who have ignored this company since the invasion. The fact that the company could be back in a position to issue such dividends ought to be fairly revealing.
I am still curious as to what is depressing the share price in terms of political risk. Is it just that Russia is currently regarded as unstable? If you listen to most media sources, that would be a reasonable interpretation, and that could lead to refusing to invest in any company with Russia exposure I suppose. How sustainable is it, however, to have a company whose top line production appears to be unaffected, whose all in cash costs are predicted to be flat this year, and where gold is hovering around the $2,000 mark in a period of fairly high inflation. Granted if interest rates go up, that would be bad for gold and good for other currencies, but equally if inflation proves more stubborn than hoped, that must mean gold could test the ceiling it currently appears to be bumping up against.
Nonetheless, if this was trading where it was before the invasion, ie in the £12-18 range per share, I would be arguing that this is clearly a leveraged play on the gold price and to position oneself accordingly. I might even have some shares in the stock at those prices if the dividend policy were maintained. But at £3, this stock could multiply by 5x before those kinds of strategic conversations would need to take place. The numbers this company is throwing out are indistinguishable from pre-war so the only reason it is trading at £3 is political risk. There IS no other reason.
I'm very curious as to why, despite the invasion disruption, they still hit their predicted all in cash costs for 2022. Was the original forecast too high?
I'm also curious why they wont hedge their forward earnings which could cause a rerating. They could go back to their no hedge policy after that. The priority must be to rerate so a clear and predictable 12 month income would surely help with that.
KoD
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kissxofxdeath
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Re: Polymetal POLY
1Q Results out:
Net debt is flat. They expect to clear the overhang by 1H23.
Guidance unchanged on Cash costs (c$1000) and all in cash costs ($1300-1400).
Production guidance unchanged at 1.7m ounces.
Still looking at redomiciliation.
"Q1 saw continued metal inventory release and positive revenue dynamics. Management is optimistic that the unwinding of saleable inventory will be substantially completed by the end of Q2 2023. Quarterly production was in line with our plan and we confirm our full-year guidance of 1.7 Moz of GE”, said Vitaly Nesis, Group CEO of Polymetal."
KoD
Net debt is flat. They expect to clear the overhang by 1H23.
Guidance unchanged on Cash costs (c$1000) and all in cash costs ($1300-1400).
Production guidance unchanged at 1.7m ounces.
Still looking at redomiciliation.
"Q1 saw continued metal inventory release and positive revenue dynamics. Management is optimistic that the unwinding of saleable inventory will be substantially completed by the end of Q2 2023. Quarterly production was in line with our plan and we confirm our full-year guidance of 1.7 Moz of GE”, said Vitaly Nesis, Group CEO of Polymetal."
KoD
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GrahamPlatt
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yieldhog
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Re: Polymetal POLY
I listened to the briefing and from a personal perspective the following points are the most relevent:
1. POLY is a stock worth holding/buying for a long-term gain.
2. There is a lot of admin/research involved in retaining POLY.
3. Default option (do nothing) may result in forced sale by broker.
4. Need to find out what action your broker might take.
5. Getting physical certificate may be difficult/expensive/complicated (e.g. shares in SIPP)
My decision is to sell the shares I hold in my SIPP as they they will be ineligible.
Has anyone yet communicated with their broker about POLY?
Y
1. POLY is a stock worth holding/buying for a long-term gain.
2. There is a lot of admin/research involved in retaining POLY.
3. Default option (do nothing) may result in forced sale by broker.
4. Need to find out what action your broker might take.
5. Getting physical certificate may be difficult/expensive/complicated (e.g. shares in SIPP)
My decision is to sell the shares I hold in my SIPP as they they will be ineligible.
Has anyone yet communicated with their broker about POLY?
Y
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kissxofxdeath
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Bouleversee
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Re: Polymetal POLY
I've just had a corporate action notice from IWeb, where I hold Polymetal in an ISA, once showing a good profit, now a loss of £11,474.30 (81.67%). I Web say they can no longer hold Polymetal shares, as of June 30. I could transfer to another ISA provider if they are willing to trade on the AIX but I doubt if either ii or Walker Crips will do so, so I probably have no alternative other than to sell if there is a market for them at the moment. I suppose I could also get them certificated but would then lose the ISA advantage if the price recovered, though I probably have enough c/f losses to offset.
I'm afraid I have been laid low by Covid on top of my IPF so haven't yet read all the info on Polymetal's website but will now do so, though I doubt it will help me to know what to do. Anyone else hold Poly in an ISA and if so, what are you planning to do?
Edit: Incidentally, IWeb said do-nothing by 30 June would result in a SELL, if there is a market for them.
I'm afraid I have been laid low by Covid on top of my IPF so haven't yet read all the info on Polymetal's website but will now do so, though I doubt it will help me to know what to do. Anyone else hold Poly in an ISA and if so, what are you planning to do?
Edit: Incidentally, IWeb said do-nothing by 30 June would result in a SELL, if there is a market for them.
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Bouleversee
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Re: Polymetal POLY
Does anyone know of a broker who would continue to hold Polymetal shares in an ISA?
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Bouleversee
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Re: Polymetal POLY
I decided to throw in the towel and sell. Certification is too complicated, especially as my passport expired and I saw no point in renewing without any prospects of travel in sight and without a smart phone with the required app. on if I wanted to receive dividends if they ever resume paying them. So that's over £11,500 down the pan and only a £50 premium bond win on a max holding to compensate. I can't even drown my sorrows as the beer I bought turns out to be alcohol free; tastes just like any other beer, however. And 40% would have gone in IHT which makes the loss a bit less in real terms.
Now, how do I make it back with a brilliant new investment? Whenever I think something would be a good buy, something nasty jumps out of the woodwork so maybe I'll just spend the dregs but first I must do what I hope will be a final Covid test to see if I am back to normal.
Now, how do I make it back with a brilliant new investment? Whenever I think something would be a good buy, something nasty jumps out of the woodwork so maybe I'll just spend the dregs but first I must do what I hope will be a final Covid test to see if I am back to normal.
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CatcheeMonkee
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Re: Polymetal POLY
Is anyone keeping their POLY?? Going to have a consider on Monday but maybe somebody can sway me one way or the other. I have just short of 1000 shares.
Thank you,
Pete
Thank you,
Pete
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HerbertViola
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Re: Polymetal POLY
CatcheeMonkee wrote:Is anyone keeping their POLY?? Going to have a consider on Monday but maybe somebody can sway me one way or the other. I have just short of 1000 shares.
Thank you,
Pete
I kept mine. The certificate came this morning. Holding is similar order of magnitude.
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kissxofxdeath
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Re: Polymetal POLY
Some very interesting comments in the final paragraph:
https://minexforum.com/2023/10/12/polym ... kara-area/
"Polymetal also provided comments regarding CEO Vitaliy Nesis’s recent statement to Bloomberg regarding the possibility of relisting the gold miner’s shares in London after selling its Russian division. Previously, the company’s CEO stated in a comment to inbusiness.kz that they planned to work closely over the next two years to enhance the liquidity of their shares on the AIX exchange in Astana. This decision came after the re-registration in the Ministry of Finance and Economy of the Republic of Kazakhstan, subsequent to their departure from the Jersey jurisdiction.
“Unlocking potential on AIX and returning to LSE are not contradictory. AIX will continue to serve as the primary trading platform, while LSE can provide additional liquidity, but only after the sale of Russian assets,” clarified Polymetal."
https://minexforum.com/2023/10/12/polym ... kara-area/
"Polymetal also provided comments regarding CEO Vitaliy Nesis’s recent statement to Bloomberg regarding the possibility of relisting the gold miner’s shares in London after selling its Russian division. Previously, the company’s CEO stated in a comment to inbusiness.kz that they planned to work closely over the next two years to enhance the liquidity of their shares on the AIX exchange in Astana. This decision came after the re-registration in the Ministry of Finance and Economy of the Republic of Kazakhstan, subsequent to their departure from the Jersey jurisdiction.
“Unlocking potential on AIX and returning to LSE are not contradictory. AIX will continue to serve as the primary trading platform, while LSE can provide additional liquidity, but only after the sale of Russian assets,” clarified Polymetal."
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kissxofxdeath
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Re: Polymetal POLY
Q3 Polymetal results out - currency movements and gold price strength have produced some stonking numbers - and theyve cleared their Russian inventories finally. Price unaffected on AIX - theres no liquidity but these results should help with the sale price. Theyve ascribed almost all the debt to their Russian assets so they should be close to debt free on sale of those which is being done. Conference call today at 10am UK time. The discount to its value is entirely due to political risk so if they can get anything close to the actual value of the Russian assets in their sale then the share price rerating could be spectacular, especially if they relist in the UK.
https://www.polymetalinternational.com/ ... 1-10-2023/?
Date: 31 October 2023
Polymetal International plc
Q3 2023 production results
Polymetal International plc reports production results for the third quarter ended September 30, 2023.
“In Q3, we returned to positive cash flow generation after seasonal working capital release and a decline in previously accumulated gold bullion. We continue to work on further release of unsold inventories and production in line with the guidance”, said Vitaly Nesis, Group CEO of Polymetal International plc.
HIGHLIGHTS
• There have been no fatal accidents during the first nine months of 2023 among Polymetal’s workforce and contractors (similar to 9M 2022). Lost time injury frequency rate (LTIFR) stood on par with 9M 2022 at 0.09. Nine lost-time accidents mostly related to falling or hit by an object were recorded during 9M 2023 (none in Kazakhstan) with two of them in Q3.
• In Q3, gold equivalent production (“GE”) grew by 12% year-on-year (y-o-y) to 508 Koz driven by increases within Russian operations (Urals, Mayskoye and Dukat).
• GE output for the first nine months of 2023 was up by 6% y-o-y to 1,272 Koz, including 340 Koz in Kazakhstan and 932 Koz in Russia.
• Concentrate inventories at Kyzyl and inventories in Russia have been unwound materially during Q3. The Company recorded a materially lower sales-production gap versus the previous quarter. Sales volumes for the first nine months of 2023 amounted to 1.1 Moz of GE. New challenges facing sales from Russia include sale of silver bullion (instead of concentrate) and significant tightening of concentrate exports regulations.
• Revenue for the reporting quarter and nine months increased by 17% and 22% y-o-y to US$ 834 and US$ 2,149 million respectively on the back of sales volumes recovery and higher metal prices.
• EBITDA for the first nine months of 2023 reached US$ 995 million representing a margin of 46% (US$ 301 million in Kazakhstan, US$ 694 million in Russia). A y-o-y increase of 60% is attributable to revenue growth and exchange rate driven operating costs decrease in Russia.
• Net Debt decreased by 10% quarter-on-quarter and stood at US$ 2.33 billion (US$ 0.12 billion in Kazakhstan and US$ 2.21 billion in Russia) as the Company generated positive free cash flow supported by seasonal factor and inventories release, as well as enjoyed lower costs and lower value of Rouble-denominated debt due to favorable exchange rate movements.
• Polymetal is on track to meet its full-year production guidance of 1.7 Moz of GE (1.2 Moz in Russia and 500 Koz in Kazakhstan). TCC and AISC guidance of US$ 950-1,000/GE oz and US$ 1,300-1,400/GE oz respectively is also maintained. The estimate remains contingent on the RUB/USD and KZT/USD exchange rates which have a significant effect on the Group’s local currency denominated operating costs.
HIGHLIGHTS
3 months ended September 30, %
change 9 months ended September 30, %
change
2023 2022 2023 2022
PRODUCTION (Koz of GE) 1
Kazakhstan 127 133 -5% 340 377 -10%
Kyzyl 84 82 +2% 212 217 -2%
Varvara 43 51 -16% 128 160 -20%
Russia 381 321 +19% 932 821 +14%
TOTAL 508 454 +12% 1,272 1,198 +6%
SALES (Koz of GE)
Kazakhstan 110 108 +2% 310 347 -11%
Russia2 336 321 +5% 826 641 +29%
TOTAL 446 429 +4% 1,136 988 +15%
REVENUE3 (US$m)
Kazakhstan 209 181 +15% 602 624 -4%
Russia 626 533 +17% 1,547 1,138 +36%
TOTAL 834 714 +17% 2,149 1,762 +22%
EBITDA3 (US$m)
Kazakhstan 101 93 +9% 301 354 -15%
Russia 335 101 +232% 694 266 +161%
TOTAL 436 194 +125% 995 620 +60%
NET DEBT4 (US$m)
Kazakhstan 120 201 -41% 120 277 -57%
Russia 2,206 2,389 -8% 2,206 2,117 +4%
TOTAL 2,326 2,590 -10% 2,326 2,393 -3%
SAFETY
LTIFR5 (Employees) 0.06 0.11 -47% 0.09 0.09 -0%
Fatalities 0 0 NA 0 0 NA
Notes:
(1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. Mayskoye production reporting approach was amended to record production as soon as the ownership title for gold is transferred to a buyer at the mine site’s concentrate storage facility. Previous periods were restated accordingly.
(2) Excluding ounces at Mayskoye, which ownership title has already been transferred to a buyer, but not shipped.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2023 (for
the three months period) and 31 December 2022 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked. Company employees only are taken into account.
https://www.polymetalinternational.com/ ... 1-10-2023/?
Date: 31 October 2023
Polymetal International plc
Q3 2023 production results
Polymetal International plc reports production results for the third quarter ended September 30, 2023.
“In Q3, we returned to positive cash flow generation after seasonal working capital release and a decline in previously accumulated gold bullion. We continue to work on further release of unsold inventories and production in line with the guidance”, said Vitaly Nesis, Group CEO of Polymetal International plc.
HIGHLIGHTS
• There have been no fatal accidents during the first nine months of 2023 among Polymetal’s workforce and contractors (similar to 9M 2022). Lost time injury frequency rate (LTIFR) stood on par with 9M 2022 at 0.09. Nine lost-time accidents mostly related to falling or hit by an object were recorded during 9M 2023 (none in Kazakhstan) with two of them in Q3.
• In Q3, gold equivalent production (“GE”) grew by 12% year-on-year (y-o-y) to 508 Koz driven by increases within Russian operations (Urals, Mayskoye and Dukat).
• GE output for the first nine months of 2023 was up by 6% y-o-y to 1,272 Koz, including 340 Koz in Kazakhstan and 932 Koz in Russia.
• Concentrate inventories at Kyzyl and inventories in Russia have been unwound materially during Q3. The Company recorded a materially lower sales-production gap versus the previous quarter. Sales volumes for the first nine months of 2023 amounted to 1.1 Moz of GE. New challenges facing sales from Russia include sale of silver bullion (instead of concentrate) and significant tightening of concentrate exports regulations.
• Revenue for the reporting quarter and nine months increased by 17% and 22% y-o-y to US$ 834 and US$ 2,149 million respectively on the back of sales volumes recovery and higher metal prices.
• EBITDA for the first nine months of 2023 reached US$ 995 million representing a margin of 46% (US$ 301 million in Kazakhstan, US$ 694 million in Russia). A y-o-y increase of 60% is attributable to revenue growth and exchange rate driven operating costs decrease in Russia.
• Net Debt decreased by 10% quarter-on-quarter and stood at US$ 2.33 billion (US$ 0.12 billion in Kazakhstan and US$ 2.21 billion in Russia) as the Company generated positive free cash flow supported by seasonal factor and inventories release, as well as enjoyed lower costs and lower value of Rouble-denominated debt due to favorable exchange rate movements.
• Polymetal is on track to meet its full-year production guidance of 1.7 Moz of GE (1.2 Moz in Russia and 500 Koz in Kazakhstan). TCC and AISC guidance of US$ 950-1,000/GE oz and US$ 1,300-1,400/GE oz respectively is also maintained. The estimate remains contingent on the RUB/USD and KZT/USD exchange rates which have a significant effect on the Group’s local currency denominated operating costs.
HIGHLIGHTS
3 months ended September 30, %
change 9 months ended September 30, %
change
2023 2022 2023 2022
PRODUCTION (Koz of GE) 1
Kazakhstan 127 133 -5% 340 377 -10%
Kyzyl 84 82 +2% 212 217 -2%
Varvara 43 51 -16% 128 160 -20%
Russia 381 321 +19% 932 821 +14%
TOTAL 508 454 +12% 1,272 1,198 +6%
SALES (Koz of GE)
Kazakhstan 110 108 +2% 310 347 -11%
Russia2 336 321 +5% 826 641 +29%
TOTAL 446 429 +4% 1,136 988 +15%
REVENUE3 (US$m)
Kazakhstan 209 181 +15% 602 624 -4%
Russia 626 533 +17% 1,547 1,138 +36%
TOTAL 834 714 +17% 2,149 1,762 +22%
EBITDA3 (US$m)
Kazakhstan 101 93 +9% 301 354 -15%
Russia 335 101 +232% 694 266 +161%
TOTAL 436 194 +125% 995 620 +60%
NET DEBT4 (US$m)
Kazakhstan 120 201 -41% 120 277 -57%
Russia 2,206 2,389 -8% 2,206 2,117 +4%
TOTAL 2,326 2,590 -10% 2,326 2,393 -3%
SAFETY
LTIFR5 (Employees) 0.06 0.11 -47% 0.09 0.09 -0%
Fatalities 0 0 NA 0 0 NA
Notes:
(1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. Mayskoye production reporting approach was amended to record production as soon as the ownership title for gold is transferred to a buyer at the mine site’s concentrate storage facility. Previous periods were restated accordingly.
(2) Excluding ounces at Mayskoye, which ownership title has already been transferred to a buyer, but not shipped.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2023 (for
the three months period) and 31 December 2022 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked. Company employees only are taken into account.
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