- Polymetal International reported strong gold and gold equivalent production in the first quarter of 2019 as it maintained its full-year cost guidance.

"Strong contribution from Kyzyl and steady operational results at other mines drove a big jump in Q1 production", said Vitaly Nesis, Group CEO of Polymetal.

Q1 gold equivalent (GE) production grew 27% year-on-year to 374 Koz as the Kyzyl mine exceeded design throughput and recovery. Further, a grade-driven increase in production at Omolon offset the disposals of Okhotsk and Kapan. Gold equivalent production from continuing operations also increased, up 37% at 369 Koz.

Gold production also increased, up 41% over the previous year at 302 Koz, while silver production was down 15% due to the planned grade decline at the Dukat underground mine.

Revenue, meanwhile, increased 28% year-on-year to $454m, driven largely by a 41% uptick in gold sales.

The Kyzyl mine continued to demonstrate an "excellent" operating performance in the first quarter with flotation recoveries climbing up to 89% in March, while gold production was 78 Koz with 92 Koz produced in concentrate.

Looking forward, the firm said it was on track to produce 1.55 Moz of gold equivalent in 2019 and reiterated its full-year cost guidance: the total cash costs range of $600-650/ GE oz while the all-in sustaining costs range was US$ 800-850/ GE oz.

However, it cautioned that this cost guidance remained contingent on the Russian rouble and Kazakh tenge exchange rate dynamics, which has a significant effect on the firm's operating costs.

The company has also started full-scale construction activities at both the Nezhda and POX-2 projects, which were expected to start up in Q4 2021 and H2 2023, respectively.

Net debt increased 12% over the period to $1,704m as at 31 March 2019, primarily due to seasonal advance purchases of diesel fuel and other consumables.

At 8:25am: [LON:POLY] Polymetal International PLC share price was +3.4p at 812p

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