03/10/17

Zoloto Kamchatki forecasts output of 5.4 tonnes, EBITDA of $100 mln in 2017 (Interfax)

PETROPAVLOVSK-KAMCHATSKY. Oct 3 (Interfax) - Zoloto Kamchatki, the gold mining division of Viktor Vekselberg's Renova Group, tentatively forecasts production at the level of its capacity of 5.4 tonnes of gold in 2017, the miner's CEO, Alexei Golubenko said.

"The gold production capacity of our mines is currently 5.4 tonnes, thereafter it will already be a question of content," Golubenko said in an interview with Interfax.

"If we find better content, it means there will be more gold. There are fairly complex seams, fine veins, and for them, as practice shows, it's impossible to accurately plan exact volume. Therefore, we now consider production capacity as the plan and are making target estimates based on the classification of our reserves, and then life corrects us," Golubenko said.

The company produced 5.45 tonnes of gold in 2016, so it is allowing for a 1% drop in production this year. However, the company is hoping to improve its financial results.

"We expect that there will be decent economic results for the year, better than last year," Golubenko said. The company is projecting a total cash cost (TCC) of about $600-$700 per ounce and earnings before interest, tax, depreciation and amortization (EBITDA) of about $100 million, he said, without specifying the EBITDA figure for 2016.

The company has not yet finalized its plans for 2018-2020, but it basically wants to maintain production at the current level.

"On the three-year horizon we plan to maintain production at the current level at the Central and Northern hubs. There will be more precise data for next year by December, when the geologists and production personnel figure it out, and then we'll either confirm the target of 5.4 tonnes of gold or revise it up or down. Everything will be made clear by the detailed mine plans, taking into account geological exploration in progress," Golubenko said.

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