Page 155 - RusRPTOct20

Polymetal​’s Initial JORC-compliant ore reserve estimate for Prognoz is 142moz silver. ​According to Polymetal’s press release, the initial estimate as of 1 March comprises 7.9mt of ore, with an average Ag grade of 560g/t, containing 142mn oz of silver. The reserve assessment was conducted for Glavnaya (Main), Boloto (Swamp) and Yuzhnaya (Southern) ore zones only and is based on $15/oz silver price. The Preliminary Feasibility Study assumes 9 years of open-pit mining. The company expects average annual production of 13.5mn oz of payable silver at AISC in the range of $8-9/oz. The project’s CapEx is expected to amount to $319mn ($250mn of pre-production and $69mn of maintenance CapEx).
ISTgrouptosellc4%of​P​ olymetal​sharesviaABB.​Interfaxreported.This is the fifth ABB with Polymetal shares this year. According to yesterday’s close, the stake is worth cRb34.2bn (c$454mn). The previous ABB was held at a higher price last week with Otkritie Bank selling a 3.4% stake in the company at Rb1,900/share. The discount to the market under that deal was approximately 2.7%. The previous three Polymetal ABBs were conducted with a 2.5-3.5% discount to the market.
Russian gold miner Highland Gold (HGM) reported a revenue increase of 12% year on year to $195mn under IFRS in 1H20 on higher realised gold prices ​outweighing lower sales volumes, with Ebitda up by 11% y/y to $96mn, making a margin of 50%. The company's adjusted net income fell by 20% y/y to $41mn, missing the estimates of BCS GM analysts by 26% mainly on the back of deferred income tax of $12.5mn relating to the origination of temporary differences. As reported by ​bne IntelliNews​, this week the analysts argued that gold prices would keep rising in the medium term, possibly ​triggering re-rating and high demand for Russian gold equity names​. The sector is undergoing consolidation, with Russian tycoon Roman Abramovich and partners ​selling 40.06% in HGM​ to Fortiana Holdings of Vladislav Sviblov. The expected buyout offer to minorities by Fortiana could support HGM's share price in the short term, BCS GM believes, noting that in the meantime the board deferred the decision on the payment of the 1H20 interim dividend. HGM showed net cash inflow from operations rising by 14% y/y to $82.76mn, and affirmed its production guidance for 2020 at 0.29mn-0.3mn ounces of gold and gold equivalent.
The Federal Antimonopoly Service (FAS) approved the sale of 100% of Kayenmyvaamskaya project of Russian ​Highland Gold​ (HGM) miner to Kinross Gold Group, Interfax reported. ​As followed by ​bne IntelliNews,​ the analysts see gold prices as keep rising in the medium term, possibly ​triggering re-rating and high demand for Russian gold equity names​. HGM will sell the mine for $15mn in cash with additional 2% royalty on the gold sold if the site's production exceeds 0.5mn ounces over 30 years. The area's resources were estimated in 2010 at 47 tonnes of gold, 185 tonnes of silver. BCS Global
155 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com