Page 194 - RusRPTMay21

social and governance (ESG) scores.
Setting an ambitious GHG reduction target and added that capex would be scaled up to cover the increased costs. The company’s 2021 capex projection of $560mn remaining intact but after that spending could increase by a quarter or $400mn.
Macro fluctuations, including higher construction costs, GHG-reduction projects and COVID-19-related costs, are the main reasons for the company’s higher capex. CEO Vitaly Nesis said that higher commodity pricing will likely lead to inflated costs in the industry going forward.
Polymetal set a goal of reducing its greenhouse gases (GHG) emissions by 30% by 2030 from the 2019 base and said that “steady progress” has already been made across various ESG metrics.
In other news Polymetal’s operational update brought no surprises report analysts that attended the event. The company presented its operational update, which largely covered the data reported in its 1Q21 trading update earlier in the week.
The company confirmed its 2021 production target of 1.5mnoz of gold, as well as its 2021 target total cash costs (TCC) of $700-750/oz and all-in sustaining cost (AISC) of $925-975/oz guidance.
Polymetal traditionally uses rather prudent commodity and macro assumptions: its assumption of the gold price for assessing investment projects is $1,500/oz with a ruble dollar exchange rate of RUB/$ rate of 70 and an oil price of $60/bbl).
The inflation in costs in 2021 is linked to the appreciation of domestic currencies (the Russian ruble and Kazakhstani tenge) and higher diesel prices.
The company’s new Nezhda gold mining project is on schedule but could cost a bit more, with commissioning expected to commence in 3Q21, reports Sova Capital.
“Although the original schedule remains intact and the full ramp-up is expected in 2Q22, management announced a sizable increase in new capex (+47% to $345mn) vs. the capex outlined in the original feasibility study ($234mn). Polymetal had already spent $260mn on the development of Nezhda as of YE20, and the remaining capex required amounts to $85mn,” Sova Capital said in a note.
The POX-2 gold refining project is also on schedule, and the first gold should be produced in 3Q23, the company said at the capital markets
194 RUSSIA Country Report May 2021 www.intellinews.com