Polymetal’s gold and silver production rises but broker views dent its shares

City A.M. Reporter
RUSSIAN precious metals miner Polymetal expects 2012 gold output to range from 590,000-640,000 ounces, up from 443,000 ounces last year, as it expands mining operations, it said yesterday.

Silver output is expected between 21-23m ounces this year, up from 19.9m ounces in 2011.

The company produced 6.4m ounces of silver in the fourth quarter, up from 3.9m ounces in the year-earlier period.

However it was one of the steepest fallers on the FTSE 100 in early trading and closed down 3.3 per cent yesterday after some negative analyst comment. In a research note on the sector Nomura said: “Polymetal appears fully priced at the moment, in our view.

“It has outperformed the sector since its London IPO. Nomura initiates on Polymetal with a Reduce rating.” The group, controlled by tycoons Alexander Nesis and Alexander Mamut with Czech investor PPF, achieved gold output of 136,000 ounces, up from 119,000 ounces in the fourth quarter of 2010.

Rival Polyus Gold also wants to list its shares on the index. Polymetal expects to begin pouring gold at its POX plant at Amursk in the Russian Far East in March, while Omolon will boost output as its winter road is now fully operational.

Chief executive Vitaly Nesis said that expansion would serve the firm well throughout 2012.