GOLD mining company Petropavlovsk may have to sell more assets in a bid to cut costs, the company’s chairman Peter Hambro said yesterday.
He made the comments while discussing the firm’s results for the third quarter of 2014, which saw production fall to 150,100oz of gold from 204,400oz this time last year.
London-listed Petropavlovsk attributed this to the sale of its operations in the Magadan region of Russia in December 2013. The company disposed of this asset due to the production costs involved with the site, and Hambro commented: “As part of the process that we are going through to cut costs and conserve capital, it made sense.”
The group is currently in discussions with regards to refinancing its outstanding bank bonds, due for repayment in February 2014. Hambro told City A.M. that Petropavlovsk was considering further sales of “peripheral” assets. He said: “Until we have a resolution to the refinancing, it must be a worry, but we are continuing meaningful discussions with all people involved. I’m confident that we will find a resolution.”
Petropavlovsk also reported new non-refractory discoveries at two of its sites, which Hambro described as “good news” because “they will make life easier going forward”.
He continued: “It’s a big capital cost to go through the refractory process and at a time of worrying about refinancing we don’t have the money to invest in the processing plant.”
Hambro added: “I’m pleased that operationally we continue to do very well.”