Polymetal gives upbeat outlook as denies tie-up

RUSSIAN precious metals producer Polymetal yesterday denied merger talks with peer Polyus Gold, as it said it was on track to produce 1.2m troy ounces of gold equivalent in 2013.

A spokesperson from the FTSE 100 company yesterday told City A.M. that Polymetal was not in discussions with fellow Russian gold producer Polyus Gold regarding a possible merger.

There has been long-running speculation of a combination between the two.

Meanwhile, Polymetal yesterday said total gold equivalent production in 2012 was up 31 per cent year on year to 1.06m ounces – exceeding guidance by six per cent – driven mainly by a stable performance at all its mature mines.

On the back of strong output over the past year, the precious metals miner said it paid its first special dividend this year of $0.50 (£0.32) a share in January.

While the company reiterated its 2013 production guidance of 1.2m ounces of gold equivalent, it warned that there was a “moderate” risk of this guidance not being achieved.

The company, controlled by Russian businessmen Alexander Nesis – brother of chief executive Vitaly – and Alexander Mamut along with Czech private equity investor PPF, added it expected capital spending of $300m in 2013, inclusive of exploration.

Polymetal’s shares closed down 1.98 per cent yesterday at 1,088p.