Petropavlovsk cuts its gold targets by less than feared

RUSSIAN miner Petropavlovsk cut its gold production target for the year by less than expected, helping to outweigh disappointing interim results.

It cut its gold output guidance by around 40,000 ounces for the year, to 636,500 to 670,000 ounces.

Many analysts had already factored in lower production, pushing the shares down 11 per cent since the group announced first-half output of 166,300 ounces in July.

“While disappointing, we believe fears over a miss and an even worse production downgrade have been priced in during the run-up to results,” said Liberum Capital, adding that it expected a material improvement in the second half.

Shares closed 4.4 per cent up at £10.19 in London trading yesterday.

The company posted a net loss of $56.2m (£36.2m) for the six months through June, compared to a profit of $74.m in the same period last year. Sales slid 8.6 per cent to $195.7m, thanks to lower grades of precious metal emerging from existing mines.