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Petropavlovsk Q3 Gold Production Down; Cuts 2013 Gold Production View

Petropavlovsk Plc. (POG.L) said Tuesday that its third-quarter gold production was 204,400 ounce, down from last year's 219,400 ounce.

The Group's average realised gold sales price of $1,495/oz for third-quarter 2013 included a $157/oz benefit from hedging. This compared with a price of $1,683/oz in the same period in 2012, reflecting the fall in the global gold price.

Total gold production and sales for the first nine months of the year amounted to 499,100 ounce and 512,900 ounce respectively, slightly higher than the corresponding period in 2012.

Total cash costs for hard-rock mines are expected to be within but at the top end of the previous guidance of $900/oz-$1,000/oz, due to the processing of some high-grade material likely to be shifted to first-quarter of 2014, which was previously envisaged to be processed in 2013.

The company said its cost-cutting and cash conservation programme is on track. Since the beginning of the year central administration costs have been reduced by about20% compared with 2012. As a result of cost cutting and working capital optimisation, net debt fell by $70 million in third-quarter of 2013 to $1.08 billion as at 4 October and the Group remains on track to reduce net debt to $1 billion by year-end.

The company said that production is still affected in some areas due to flooding and this has prompted the Group to reduce its gold production guidance for 2013 to 740,000-750,000oz, a reduction of approximately 2-3% from the previous guidance.

by RTTNews Staff Writer

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