Petropavlovsk boosts H1 gold sales despite lower prices

28th Aug 2014 07:50

Russian gold miner Petropavlovsk announced record first-half production and increased sales despite lower gold prices.The group produced 306,400 ounces (oz) and sold 5% more gold than a year ago in the face of a 12% fall in the average realised gold price.The lower price was largely responsible for a 10% fall in group revenue to $453m.Petropavlovsk also said it was still on target to achieve an annual 625,000oz of gold production at the lower end of its cost guidance range.Gold prices have tumbled in the last few years as the US and world economies have improved, reducing the incentive for investors to seek safe havens.On Wednesday night, the gold price had risen 0.44% on the day to $1,289 an ounce, well below all-time highs of more than $1,900 an ounce reached in 2011.Petropavlovsk expects to reduce net debt to about $850m by the end of the year and to cut costs further to about $750 an ounce from 2015.Underlying pre-tax earnings rose 41% to $139.2m in the six months to 30 June and net losses reduced to $95.3m from $742.2m a year ago.It said it was in talks with lenders about developing a refinancing plan and had made good progress on relaxing some covenants in its bank loans.Chairman Peter Hambro said: "The first half of 2014 was a period in which the group continued its solid operational performance building on the progress made in 2013 and delivering on its new plan for strategic development."PW