Russia's largest gold miner plans to boost production
Moscow (Jun 28) Russia's largest gold miner Polyus says it is planning to increase supply in 2022. The world's 4th largest miner has suffered a current slowdown in the output. This was caused by the decline in the quality of the ore extracted from the mines, but Polyus hopes to recover from the drop in the coming years.
"The essence of our short-term strategy is providing an increase in production while maintaining costs" said Polyus' CEO Pavel Grachev.
The firm expects its total cash cost to stay flat next year at $425-$450 per ounce of gold, the lowest level globally. It may decline to as low as $400 in 2023.
Beyond that, annual CAPEX is expected to be about $1.1 billion through 2023, higher than last year’s $653 million. The increase is mostly due to the expansion of the Blagodatnoye project, according to Grachev. The main Sukhoi Log investments, estimated at $3.3 billion, will start in 2024.
Polyus is also set to kick start a mine at Sukhoi Log, one of the world’s biggest gold deposits, in central-eastern Russia in 2027. The only other large project globally, in Canada, is on a much smaller scale, Grachev said.
Looking at the daily price chart the price has moved into a consolidation zone. Since hitting the high of 18765 the price has been grinding lower but the blue zone just above 13000 is now important. As long as the price stays above there it could recover and the red zone could be taken out. For now, the consolidation range looks firm and a break either side could give us clues on the future trajectory for the company's share price.
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