Polyus Finance Plc: Operating results for 2H 2022 and full year 2022

Press Release                                                                                      21 February 2023

 

PJSC POLYUS

OPERATING RESULTS FOR THE SECOND HALF OF 2022 AND FULL YEAR 2022

PJSC Polyus ("Polyus" or the "Company") today releases its 2H 2022 and FY 2022 operating results.

2H 2022 HIGHLIGHTS

 Volumes of ore mined increased 21% to 34,184 thousand tonnes, compared to the first half of 2022, reflecting higher ore volumes mined at Olimpiada and Blagodatnoye.

 Volumes of ore processed amounted to 24,542 thousand tonnes, a 3% increase on the first half of 2022, driven by a seasonal improvement of heap leaching operations at Kuranakh.

  Doré gold output stood at 1,382 thousand ounces in the second half of 2022, up 16% compared to the first half of 2022.

 Total gold output amounted to 1,474 thousand ounces, a 38% increase compared to the first half of 2022, reflecting a higher gold production across all operating assets of the group. This also includes higher volumes of gold in flotation concentrate produced in the second half of 2022 (80koz vs 4.0koz in 1H 2022).

 FY 2022 HIGHLIGHTS

 Volumes of ore mined in 2022 decreased 7% year-on-year to 62,333 thousand tonnes, due to lower ore volumes mined at Blagodatnoye, Natalka and Verninskoye. This was partially offset by higher volumes of ore mined at Olimpiada.

 Volumes of ore processed amounted to 48,319 thousand tonnes, remaining almost flat on the previous year.

 Recovery rate decreased to 81.8%, compared to 82.7% in 2021, mainly due to lower head grades.

 Doré gold output totalled 2,568 thousand ounces, down 6% year-on-year.

 Total gold output declined to 2,541 thousand ounces, compared to 2,717 thousand ounces in 2021, driven by:

  Lower production of refined gold at Olimpiada due to temporary decline in grades in ore processed. The Company's management intentionally decided to downscale excavation volumes versus the initial mining calendar accounting for elevated risks of potential disruptions in supply chains for spare parts and mining equipment. This led to a delayed access to high-grade zones of the ore body. The excavation volumes have already been brought back to normal, and some portion of high-grade ore planned for the second half of 2022 will be carried forward to the first half of 2023.

  An anticipated decrease in head grades at Blagodatnoye and Natalka.

• In 2022, the Company sold the total of 2,423 thousand ounces of gold, down 11% from the prior year. A  difference between sales and the total gold output mainly reflects the accumulation of gold contained in concentrate produced in the fourth quarter of 2022. Sales of flotation concentrate have been typically lagging behind production for several months. Inventories of concentrate will be sold and reflected in the group's financials in early 2023.

 

2023 PRODUCTION GUIDANCE AND ANNOUNCEMENT OF NEW PROJECTS

 Polyus anticipates gold production for the full year of 2023 to reside within the range of 2.8 - 2.9 million ounces. The year-on-year increase in production is expected to be mainly driven by higher grades in ore processed at Olimpiada since Polyus will be mining rich gold-bearing zones of the Vostochny pit.

•  Polyus continues development of its previously announced brownfield projects, including Mill-5 construction at Blagodatnoye, which is anticipated to be completed in 2025.

  In addition to the existing project pipeline, Polyus launches 3 new brownfield initiatives:

  Throughput capacity expansion at Kuranakh' existing heap leaching facilities aimed at increasing capacity from 1.5 million tonnes per annum to 5.0 million tonnes per annum starting from 2025.

  Construction of new 12.5 million tonnes per annum heap leaching facilities at Kuranakh with a scheduled launch in 2026 and the full ramp-up by 2028.

•  Introduction of a flotation circuit at Natalka by 2025.

 

  These projects are expected to add 0.3 - 0.4 million ounces of incremental gold volumes per annum to the group's gold production on the horizon of 3 - 5 years.

  Additional information on these initiatives will be provided in March 2023 when the Company discloses its financial results for the full year of 2022.

 

CONSOLIDATED OPERATING RESULTS

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Olimpiada 959.7 1,082.9 -11% 532.0 427.7 24% 570.6 -7% Blagodatnoye 387.8 430.3 -10% 216.5 171.3 26% 220.5 -2% Natalka 444.7 503.3 -12% 233.5 211.2 11% 262.9 -11% Verninskoye 296.1 292.2 1% 159.3 136.8 16% 149.8 6% Kuranakh 239.4 237.8 1% 132.6 106.8 24% 127.5 4% Alluvials 129.9 141.1 -8% 120.1 9.8 n/a 115.9 4% Refined gold, koz 2,457.6 2,687.6 -9% 1,394.0 1,063.6 31% 1,447.2 -4% Flotation concentrate production, t 30,420 15,377 98% 27,979 2,441 n/a 3,547 n/a Antimony in flotation concentrate, t 4,391 2,499 76% 3,991 400 n/a 580 n/a Gold in flotation concentrate, koz 83.7 29.8 n/a 79.7 4.0 n/a 7.0 n/a Gold payable in concentrate, koz  70.5 22.8 n/a 67.4  3.1 n/a 5.4 n/a Total gold output, koz 2,541.3 2,717.4 -6% 1,473.7 1,067.6 38% 1,454.2 1% Rock moved, km³ 144,207 136,430 6% 70,226 73,981 -5% 71,723 -2% Stripping ratio, m³/t 1.9 1.6 19% 1.7 2.2 -23% 1.7 0% Rock moved, kt 369,588 351,690 5% 179,595 189,993 -5% 185,209 -3% Stripping ratio, t/t 4.9 4.2 17% 4.3 5.7 -25% 4.5 -4% Ore mined, kt 62,333 67,321 -7% 34,184 28,149 21% 33,655 2% Ore processed, kt 48,319 47,895 1% 24,542 23,777 3% 24,600 0% Recovery rate, % 81.8% 82.7% -0.9ppts 81.8% 81.8% 0.0ppts 83.2% -1.4ppts Total doré & slime gold output, koz 2,568.0 2,736.4 -6% 1,381.8 1,186.2 16% 1,428.3 -3%

 

ESG UPDATE

2H Highlights

  LTIFR^[1] for 2H of 2022 stood at 0.11 (2H of 2021 - 0.17), while the FY2022 ratio was 0.14 (FY2021 - 0.18). In 2022, two fatalities were recorded at Polyus operations.

•  Safety culture level on the Bradley scale reached 2.6, in line with the Polyus Group's plan.

 

• No environmental incidents were recorded during the reporting period. Not a single accident occurred.

 

• Coronavirus update: the overall status of vaccination was 74%.^[2]

 

Health and safety

  The employees of Polyus Aldan, Polyus Stroi, Polyus Logistics and Polyus Magadan completed the training programme based on the updated incident management standard.

  The corporate contest on the best occupational safety initiative was held. The projects for setting up training grounds to practice safe operations when connecting mining equipment implemented at Polyus Magadan and Lenzoloto were recognised as the best initiatives.

  At Polyus Krasnoyarsk, first-aid facilities, pharmacies and medical rooms were renovated.

  First-aid training took place across all business units. More than 400 employees completed the training programme at Polyus Krasnoyarsk.

  An independent industrial safety audit was held at Polyus Krasnoyarsk and Polyus Logistics (Krasnoyarsk branch).

  The COVID-19 vaccination/revaccination and the flu vaccination campaigns were launched.

  Polyus received an award for the national Best Occupational Health Management Systems for 2022 competition arranged by the Russian Ministry of Labor and Social Protection.

Environment and climate

  The Climate Strategy was approved by the Board of Directors and released. The development of action plans and methodological guidance is underway.

  The design of the tailings storage facility monitoring and control system was completed; preparations are underway for its pilot testing. The scheduled internal safety audits were performed across all of the Company's tailings storage facilities.

  The Biodiversity Risk Assessment and Monitoring Regulation is underway. Training webinars for business units were organised.

  Polyus Krasnoyarsk employees released 145,000 young sterlets into the Yenisey river in 2022.

  Polyus topped the World Wildlife Fund (WWF) annual environmental transparency rating for Russian mining and metals companies for the second year in a row.

Local communities

•  In Krasnoyarsk, the Geology Museum of Central Siberia (GEOS) opened the Gold is Nearby exhibition, which was organised by Polyus together with the Polytechnical Museum. Polyus funded the renovation of a GEOS exhibition hall, to coincide with the event.

  Polyus allocated funds to establish a cutting-edge laboratory for future beneficiation engineers in the Bodaibo mining college, Irkutsk region. The facility has unique equipment to better prepare students for their career endeavours.

•  Polyus Verninskoye financed the arrangement of an off-site visit to the Bodaibo cancer detection centre, Irkutsk region. Over 700 people had medical consultations with Irkutsk specialists.

  As part of the Summer with Polyus in Irkutsk project, the Company acted as the main organiser for the Moscow Theatre at Taganka, which stages three performances in Irkutsk.

•  Around 80 school students attended career guidance events arranged by Polyus Magadan. The speakers provided an overview of mineral resources and popular professions in today's gold mining industry. In addition, school students learned more about Polyus's overall business, geography, structure, corporate programmes and values.

Employees

  The third company-wide professional skills contest was held in Krasnoyarsk. Personnel from the Krasnoyarsk, Yakutia, Irkutsk and Magadan business units showcased top-quality professional skills, brilliant skills in operating machinery and vehicles as well as solid teamwork.

  Polyus conducted several events under the volunteer programme, including a grants competition for the best volunteer project, donor days, collection of donations for charity funds and environmental trips.

  More than 80 Polyus employees took part in the Big Data Analysis corporate workshop. They can apply such knowledge and skills in an independent analysis of various types of data and machine learning modelling to deal with business cases.

ESG ratings^[3]

  International ratings

o  FTSE Russell - 3.9 (out of 5)

o  ISS - C+

o  Sustainalytics - 31.0

o  MSCI - B

o  Nature Benchmark - 34.2 (position in the overall ranking: 21/389, position in the industry ranking: 8/97)

  Polyus was awarded with new national ratings:

o  The Expert RA rating agency assigned an ESG-II(b) rating, meaning that the Company demonstrates a high level of compliance with sustainability goals. The score ranges from ESG-I to ESG-W, where ESG-I is the highest.

o  ACRA assigned ESG-2, category ESG-B, which corresponds to a very high rating in the field of environment, social responsibility and governance. The score ranges from ESG-1 to ESG-17, where ESG-1 is the highest.

  The joint MOEX-RSPP Index: for the first time, Polyus was included in Group A, the Vector of Sustainable Development, and reinforced its position in Group B+, the Responsibility and Transparency Index.

  RAEX upgraded the Polyus rating from A to AA, making it one of the two top Russian companies out of 160 covered by the RAEX ranking.

 

Olimpiada

2H 2022 Highlights

 Average grades in ore processed rose to 3.18 g/t.

 Recovery rate rose 1.6ppts to 82.8%.

FY 2022 Highlights

 Volumes of ore processed reached 15,189 thousand tonnes.

 Average grades in ore processed decreased to 2.77 g/t.

 Total gold output was 1,043 thousand ounces.

Gold output

Doré gold output stood at 579 thousand ounces in the second half of 2022, up 22% half-on-half, driven by improved average grades in ore processed and higher recovery rates. Total gold output (refined and in concentrate) rose 42% compared to the first half of 2022, to 612 thousand ounces, including 80 thousand ounces of gold contained in flotation concentrate. This increase was driven by higher grades in ore mined at Olimpiada in the second half of 2022 when Polyus started mining activities at rich gold-bearing zones of the Vostochny pit.

In 2022, doré gold output amounted to 1,052 thousand ounces, down 5% compared to 2021, reflecting lower grades in ore processed. Total gold output declined 6% year-on-year to 1,043 thousand ounces.

Flotation concentrate output increased almost two-fold year-on-year to 30 thousand tonnes with volumes of gold contained in flotation concentrate amounting to 83.7 thousand ounces, driven by an increase in processed volumes of high-grade antimony-rich ore at Olimpiada.

Mining works

In the second half of 2022, volumes of rock moved decreased 18% to 61,779 thousand tonnes (22,773 km³) compared to the first half of 2022. Polyus increased the volumes of ore mined to 13,453 thousand tonnes, up 7,590 thousand tonnes on the previous half of the year. The average grades in ore mined increased to 2.72 g/t, compared to 2.04 g/t in the first half of 2022, as the Company proceeded with mining activities in a higher-grade area of the fourth stage of the pit.

In 2022, volumes of ore mined amounted to 19,316 thousand tonnes, a 64% increase compared to 2021. In line with the sequence of mining works, the average grade in ore mined for the full year of 2022 stood at 2.51 g/t compared to 2.80 g/t in the previous year.

In 2022, accounting for elevated risks of potential disruptions in supply chains for spare parts and mining equipment, the Company's management decided to temporarily downscale excavation volumes versus the initial mining calendar. This led to a delay in access to high-grade zones of the ore body. Polyus is already back to initially planned ore mining volumes at Olimpiada, with an ongoing improvement in grades in ore mined. The Company anticipates a year-on-year gold output growth at Olimpiada.

Ore processing

Volumes of ore processed totalled 7,576 thousand tonnes in the second half of 2022, remaining broadly flat compared to the first half of the year. Following an increase in average grades in ore mined, head grades rose to 3.18 g/t, from 2.37 g/t in the previous half of the year. As a result, the recovery rate increased to 82.8% from 81.2% in first half of 2022.

In 2022, volumes of ore processed remained flat year-on-year at 15,189 thousand tonnes. The average grades in ore processed declined 8% year-on-year to 2.77 g/t, reflecting lower average grades in ore mined during the reporting year. Recovery rate amounted to 82.1%, compared to 84.0% in the full year of 2021.

In 2022, the Company proceeded with a number of initiatives aimed at stabilising the current processing parameters at 15.0 million tonnes per annum, including the start of an additional flotation concentrate thickener. At BIO complex, Polyus has improved its efficiency by launching four additional reactors at BIO-2.

Mining works and ore processing

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Rock moved, km³ 50,538 50,245 1% 22,773 27,765 -18% 28,028 -19% incl. stripping, km³ 43,539 45,973 -5% 17,898 25,641 -30% 26,067 -31% Stripping ratio, m³/t 2.3 3.9 -41% 1.3 4.4 -70% 4.8 -73% Rock moved, kt 136,872 135,927 1% 61,779 75,093 -18% 75,791 -18% incl. stripping, kt 117,556 124,136 -5% 48,326 69,230 -30% 70,382 -31% Stripping ratio, t/t 6.1 10.5 -42% 3.6 11.8 -69% 13.0 -72% Ore mined, kt 19,316 11,791 64% 13,453 5,863 n/a 5,409 n/a Average grade in ore mined, g/t 2.51 2.80 -10% 2.72 2.04 33% 2.38 14% Ore processed, kt 15,189 15,061 1% 7,576 7,613 0% 7,745 -2% Average grade in ore processed, g/t 2.77 3.00 -8% 3.18 2.37 34% 2.98 7% Recovery, % 82.1% 84.0% -1.9ppts 82.8% 81.2% 1.6ppts 84.8% -2.0ppts Doré gold, koz 1,052.2 1,112.8 -5% 578.5 473.7 22% 561.5 3% Refined gold output, koz 959.7 1,082.8 -11% 532.0 427.7 24% 570.6 -7% Flotation concentrate production, t 30,420 15,377 98% 27,979 2,441 n/a 3,547 n/a Antimony in flotation concentrate, t 4,391 2,499 76% 3,991 400 n/a 580 n/a Gold contained in concentrate, koz 83.7 29.8 n/a 79.7 4.0 n/a 7.0 n/a Total gold output, koz 1,043.4 1,112.7 -6% 611.7 431.7 42% 577.6 6%

 

Blagodatnoye

2H 2022 Highlights

 Volumes of ore mined increased 22% on a half-on-half basis.

 Recovery rate increased by 0.5ppts to 86.5%.

 Refined gold production rose 26% to 217 thousand ounces.

FY 2022 Highlights

 Volumes of ore processed totalled 9,034 thousand tonnes.

 Average grades in ore processed stood at 1.54 g/t.

 Refined gold output amounted to 388 thousand ounces.

Gold output

Doré gold output in the second half of 2022 amounted to 204 thousand ounces, a 14% increase compared to the first half of 2022, mainly due to higher average grades in ore processed and higher volumes of ore processed. Refined gold output increased 26% half-on-half to 217 thousand ounces.

In 2022, doré gold output declined 13% year-on-year to 382 thousand ounces and refined gold output stood at 388 thousand ounces, down 10% to 2021. That decline was driven by lower average grades in ore processed.

Mining works

Volumes of rock moved amounted to 39,825 thousand tonnes (14,351 km³). In the second half of 2022, volumes of ore mined went up 22% to 6,118 thousand tonnes, compared to 5,022 thousand tonnes in previous half of the year. The average grades in ore mined improved to 1.29 g/t (1.06 g/t in the first half of 2022), reflecting the sequence of mining works in the second half of 2022.

On a year-on-year basis, volumes of ore mined decreased 42% and amounted to 11,140 thousand tonnes. The average grades in ore mined stood at 1.19 g/t, down 12% compared to 2021, as the Company had completed mining activities at the second stage of the pit, while operations at the third stage are associated with mining at lower-grade zones.

Ore processing

Compared to the first half of 2022, volumes of ore processed increased 4% to 4,615 thousand tonnes. This growth reflects less maintenance-related downtime in the second half of 2022. The average grades in ore processed improved from 1.48 g/t in the previous half of the year to 1.59 g/t, due to an increase in the average grades in ore mined.

On a year-on-year basis, volumes of ore processed were broadly flat and amounted to 9.0 million tonnes. Following a decline in grades in ore mined, head grades decreased from 1.75 g/t in 2021 to 1.54 g/t in 2022. Recovery rate decreased 0.5ppts to 86.3% in 2022 (86.8% in 2021) due to lower grades in ore processed.

Mill-5

Polyus is on track with the project implementation. The Company anticipates to launch Mill 5 in 2025. In 2022, Polyus completed the shift camp construction and closing of a thermal envelope of the buildings. Major parts of the foundation works for an in-pit crushing and conveying (IPCC) system were completed during 2022. Polyus has also finished the installation of the SAG-mill and desorption site equipment. The construction of the Yenashimo river bridge was finalised, and the bridge is now operational.

Mining works and ore processing

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Rock moved, km³ 28,538 28,119 1% 14,351 14,187 1% 14,854 -3% incl. stripping, km³ 24,560 21,311 15% 12,166 12,394 -2% 11,201 9% Stripping ratio, m³/t 2.2 1.1 100% 2.0 2.5 -20% 1.1 82% Total rock moved, kt 79,415 78,306 1% 39,825 39,590 1% 41,365 -4% incl. stripping, kt 68,275 59,245 15% 33,707 34,568 -2% 31,140 8% Stripping ratio, t/t 6.1 3.1 97% 5.5 6.9 -20% 3.0 83% Ore mined, kt 11,140 19,061 -42% 6,118 5,022 22% 10,225 -40% Average grade in ore mined, g/t 1.19 1.35 -12% 1.29 1.06 22% 1.38 -7% Ore processed, kt 9,034 9,017 0% 4,615 4,419 4% 4,542 2% Average grade in ore processed, g/t 1.54 1.75 -12% 1.59 1.48 7% 1.78 -11% Recovery, % 86.3% 86.8% -0.5ppts 86.5% 86.0% 0.5ppts 87.0% -0.5ppts Doré gold, koz 382.4 438.9 -13% 203.8 178.6 14% 222.7 -8% Refined gold output, koz 387.8 430.3 -10% 216.5 171.3 26% 220.5 -2%

 

Natalka

2H 2022 Highlights

 Volumes of ore mined declined 25% on a half-on-half basis.

 Average grades in ore processed stood at 1.56 g/t.

 Refined gold output increased 11% to 233 thousand ounces on a half-on-half basis.

FY 2022 Highlights

 Volumes of ore processed reached 12,427 thousand tonnes.

 Recovery rate stood at 72.1%.

 Doré gold output totalled 461 thousand ounces.

Gold output

Doré gold output in the second half of 2022 declined 6% half-on-half to 223 thousand ounces, reflecting both lower head grades and lower recovery rates. Refined gold output amounted to 233 thousand ounces, compared to 211 thousand ounces in the first half of 2022, reflecting changes in gold in inventory at the refinery.

In 2022, refined gold output was down 12% year-on-year to 445 thousand ounces, while doré gold output declined 10% year-on-year to 461 thousand ounces. This decrease was attributable to lower average grades in ore processed.

Mining works

In the second half of 2022, volumes of rock moved rose 8% to 41,442 thousand tonnes (16,063 km³) compared to the first half of the year. In line with the sequence of mining works, volumes of ore mined decreased to 7,429 thousand tonnes, down 25% half-on-half. The average grades in ore mined decreased to 1.05 g/t (1.24 g/t in the first half of 2022), as Polyus moved mining activities to lower-grade areas.   

In 2022, the Company increased volumes of rock moved by 11% year-on-year to 79,685 thousand tonnes (30,886 km³), as a result of an increase in mining fleet operating on-site. Over the course of 2022, Polyus intensified its stripping activities and started ore mining at the low-grade areas of the second stage of the pit. This resulted in a decrease in the average grades in ore mined to 1.16 g/t, compared to 1.35 g/t in 2021. Volumes of ore mined amounted to 17,394 thousand tonnes, down 25% year-on-year.

Ore processing

Volumes of ore processed increased to 6,263 thousand tonnes in the second half of the year, up 2 % on a half-on-half basis. Due to a decrease in average grades in ore mined, the average grade in ore processed declined 6% to 1.56 g/t from 1.66 g/t in the first half of 2022. Recovery rate went down 4.0ppts on the previous half of the year, reflecting the mineralogy of ore feed with a high content of arsenic and sulphur and lower grades in ore processed. Polyus continues implementing the operational initiatives targeted at recovery rate maximisation. These initiatives included calibration of processing parameters of the flash flotation circuit, improvement of the ball loading at both the SAG and ball mills and selection of appropriate parameters for the SAG mill discharge grates.

In 2022, the Natalka mill reached its targeted hourly throughput rate of above 1,550 t/h and is currently running at the annualized capacity of 12.5 million tonnes per annum.

Average grades in ore processed declined 9% year-on-year to 1.61 g/t due to lower grades in ore mined. Despite a decrease in head grades, recovery rate remained broadly flat 72.1% in 2022 (72.0% in 2021).

Mining works and ore processing

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Rock moved, km³ 30,886 27,733 11% 16,063 14,823 8% 13,686 17% incl. stripping, km³ 24,144 18,722 29% 13,184 10,960 20% 9,180 44% Stripping ratio, m³/t 1.4 0.8 75% 1.8 1.1 64% 0.8 n/a Total rock moved, kt 79,685 71,555 11% 41,442 38,243 8% 35,298 17%       incl. stripping, kt 62,291 48,323 29% 34,013 28,278 20% 23,682 44% Stripping ratio, t/t 3.6 2.1 71% 4.6 2.8 64% 2.0 n/a Ore mined, kt 17,394 23,232 -25% 7,429 9,965 -25% 11,616 -36% Average grade in ore mined, g/t 1.16 1.35 -14% 1.05 1.24 -15% 1.35 -22% Ore processed, kt 12,427 12,387 0% 6,263 6,164 2% 6,387 -2% Average grade in ore processed, g/t 1.61 1.77 -9% 1.56 1.66 -6% 1.74 -10% Recovery, % 72.1% 72.0% 0.1ppts 70.0% 74.0% -4.0ppts 72.6% -2.6ppts Doré gold, koz 460.5 512.9 -10% 222.6 237.9 -6% 260.8 -15% Refined gold output, koz 444.7 503.3 -12% 233.5 211.2 11% 262.9 -11%

 

Verninskoye

2H 2022 Highlights

 Volumes of ore processed amounted to 1,953 thousand tonnes.

 Recovery rate stood at 89.9%.

 Refined gold output increased 16% to 159 thousand ounces on a half-on-half basis.

FY 2022 Highlights

 Volumes of ore processed went up 8%.

 Average grades in ore processed was 2.63 g/t.

 Refined gold output rose to 296 thousand ounces.

 

Gold output

Doré gold output stood at 146 thousand ounces in the second half of 2022, down 4% compared to the previous half of the year. This decline was attributable to lower average grades in ore processed during the reporting period. Refined gold output amounted to 159 thousand ounces, up 16% compared to 137 thousand ounces in the first half of 2022, reflecting changes in gold in inventory at the refinery.

Over the course of 2022, both refined gold output and doré gold output increased 1% to 296 thousand ounce and 298 thousand ounce respectively. This increase was driven by higher volumes of ore processed, which compensated for a decrease in the grade in ore processed.

Mining works

Volumes of rock moved declined 3% compared to the previous half of the year, to 17,076 thousand tonnes (6,310 km³). In line with the mining plan, volumes of ore mined went down 15% compared to the first half of the year, to 1,948 thousand tonnes. The average grades in ore mined rose 17% half-on-half to 2.59 g/t.

Volumes of rock moved in 2022 amounted to 34,690 thousand tonnes (12,833 km³), a 5% increase compared to 2021. This increase was driven by the improved performance of excavators operating on-site and the procurement of additional mining equipment. In line with the mining plan, volumes of ore mined decreased 12% year-on-year and amounted to 4,230 thousand tonnes, while the average grades in ore mined rose to 2.39 g/t (2.22 g/t in 2021).

Ore processing

Following a temporary decline in volumes of ore mined from the high-grade areas of the deposit, the average grade in ore processed declined 5% half-on-half to 2.56 g/t. Recovery rate remained unchanged at 89.9%.

In 2022, volumes of ore processed amounted to 3,902 thousand tonnes, a 8% increase on the previous year. This growth reflects improved the hourly throughput of the mill, which stood at a new historical high of 468 t/h, as well as the implementation of operational enhancements resulting in less maintenance downtime related to the reline of the SAG mill.  

Head grades declined from 2.82 g/t in 2021 to 2.63 g/t in the reporting period, due to a reduced portion of high-grade material in ore mined in 2022. Despite a 7% decline in grades in ore processed, recovery rate decreased just 0.1ppts to 89.9% on a year-on year basis. This reflects the implementation of operational initiatives, including the installation of a new desorber and improved performance of intensive leaching reactors.

Mining works and ore processing

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Rock moved, km³ 12,833 12,249 5% 6,310 6,523 -3% 5,937 6% incl. stripping, km³ 11,267 10,478 8% 5,588 5,679 -2% 5,273 6% Stripping ratio, m³/t 2.7 2.2 23% 2.9 2.5 16% 2.9 0% Total rock moved, kt 34,690 33,073 5% 17,076 17,614 -3% 16,031 7% incl. stripping, kt 30,460 28,291 8% 15,128 15,332 -1% 14,237 6% Stripping ratio, t/t 7.20 5.9 22% 7.8 6.7 16% 7.9 -1% Ore mined, kt 4,230 4,782 -12% 1,948 2,282 -15% 1,794 9% Average grade in ore mined, g/t 2.39 2.22 8% 2.59 2.22 17% 2.11 23% Ore processed, kt 3,902 3,608 8% 1,953 1,949 0% 1,888 3% Average grade in ore processed, g/t 2.63 2.82 -7% 2.56 2.70 -5% 2.81 -9% Recovery, % 89.9% 90.0% -0.1ppts 89.9% 89.9% 0.0ppts 90.0% -0.1ppts Doré gold , koz 298.0 294.6 1% 145.7 152.3 -4% 154.4 -6% Refined gold output, koz 296.1 292.2 1% 159.3 136.8 16% 149.8 6%

 

Kuranakh

2H 2022 Highlights

 Volumes of ore processed amounted to 4,135 thousand tonnes, up 14% on a half-on-half basis.

FY 2022 Highlights

 Volumes of ore mined rose 21% year-on-year to 10,253 thousand tonnes.

 Doré gold output increased to 245 thousand ounces.

Gold output

Doré gold output amounted to 133 thousand ounces, a 19% increase on the first half of 2022, driven by higher processing volumes due to a seasonal improvement of activities at heap leaching facilities. Refined gold output rose 24% half-on-half to 133 thousand ounces.

In 2022, doré gold output went up 4% to 245 thousand ounces and refined gold output reached 239 thousand ounces. This increase was driven by higher head grades.

Mining works

Volumes of rock moved amounted to 19,473 thousand tonnes (10,729 km³), remaining broadly flat compared to the first half of the year. Volumes of ore mined increased to 5,236 thousand tonnes, up 4% on the first half of 2022. The Company increased a share of lower-grade material in ore mined due to a peak in the heap leaching activities.

Over the course of 2022, the Company increased volumes of rock moved to 38,926 thousand tonnes (21,412 km³), up 19% on the previous year. Following the intensification of mining works, the volumes of ore mined went up 21% year-on-year and amounted to 10,253 thousand tonnes. The average grades in ore mined declined to 1.05 g/t (1.07 g/t in 2021).

Ore processing

In the second half of the year, volumes of ore processed reached 3,053 thousand tonnes, remaining broadly flat compared to the first half of the year.

In 2022, volumes of ore processed at the Kuranakh mill amounted to 6,112 thousand tonnes, up 1% compared to 2021. Head grade stood at 1.23 g/t, compared to 1.21 g/t in the previous year.

The Company is progressing with the project to expand the throughput capacity at the Kuranakh mill to 7.5 million tonnes per annum. Some long-lead pieces of equipment and components for the ball mill have already been delivered to the site. Polyus has also completed construction works at thickeners, installation of 16 sorption columns for resign-in-pulp expansion and new compressors commissioning in 2022.

Heap leaching

Due to the seasonality of heap leaching operations, volumes of ore processed rose by 89% half-on-half to 1,082 thousand tonnes in second half of 2022. The average grades in ore processed increased to 0.81 g/t from 0.76 g/t in the first half of 2022.

Volume of ore processed decreased to 1,655 thousand tonnes in 2022, down 7% compared to 2021, which was compensated by improved grades in ore processed (0.79 g/t in 2022 vs 0.68 g/t in 2021).

Mining works and ore processing

  2022 2021 Y-o-Y 2H'22 1H'22 H-o-H 2H'21 Y-o-Y Rock moved, km³ 21,412 18,084 18% 10,729 10,683 0% 9,218 16% incl. stripping, km³ 15,508 13,228 17% 7,700 7,808 -1% 6,574 17% Stripping ratio, m³/t 1.5 1.6 -6% 1.5 1.6 -6% 1.4 7% Total rock moved, kt 38,926 32,829 19% 19,473 19,453 0% 16,724 16% including stripping, kt 28,673 24,374 18% 14,237 14,436 -1% 12,113 18% Stripping ratio, t/t 2.8 2.9 -3% 2.7 2.9 -7% 2.6 4% Ore mined, kt 10,253 8,455 21% 5,236 5,017 4% 4,611 14% Average grade in ore mined, g/t 1.05 1.07 -2% 1.05 1.06 -1% 1.02 3% Total ore processed, kt 7,767 7,822 -1% 4,135 3,632 14% 4,038 2% Mill                 Ore processed, kt 6,112 6,034 1% 3,053 3,059 0% 3,007 2% Average grade in ore processed, g/t 1.23 1.21 2% 1.24 1.21 2% 1.19 4% Recovery, % 88.7% 88.7% 0.0ppts 88.7% 88.7% 0.0ppts 88.4% 0.3ppts Doré gold, koz 214.7 207.3 4% 108.9 105.8 3% 101.5 7% Heap-leach                 Ore processed, kt 1,655 1,788 -7% 1,082 573 89% 1,031 5% Average grade in ore processed, g/t 0.79 0.68 16% 0.81 0.76 7% 0.68 19% Recovery, % 72.3% 72.3% 0.0ppts 72.3% 72.3% 0.0ppts 72.3% 0.0ppts Doré gold, koz 30.3