Tuesday 10 September 2019 5:19 pm

Petropavlovsk swings into profit as processing plant comes online

Russian gold miner Petropavlovsk put a bruising boardroom battle aside to swing into profitability in the first half of the year.

The company said today that profit before tax hit $16.8m (£13.6m) in the first six months of the year, versus a loss of $33.1m over the same period in 2018.

Read more: Petropavlovsk investor hits out at Takeover Panel as investigation ‘casts shadow’

It came as its new processing plant swung into operation, which chair Sir Roderic Lyne hailed “an outstanding success”.

As one of only two pressure-oxidisation (pox) hubs in Russia, the site started taking on ores from third-party producers in July.

“With a new major shareholder and the successful commissioning of the pox hub, Petropavlovsk is on the way to becoming one of the leading miners and developers of refractory ores in Russia,” Lyne said.

The plant has also helped the company unlock potential at its Malomir mine, nearly doubling production there.

Gold sales grew by 12 per cent in the first half to 225,100 ounces, while revenues jumped 13 per cent to $305m.

The news puts Petropavlovsk in a place to start looking at acquisitions, Chief executive Pavel Maslovskiy said. The processing plant has 50,000 tonnes of spare capacity.

“In these circumstances, it is important for us to investigate existing inorganic opportunities with respect to the many higher-grade refractory assets in the region which may be stranded and would require our pox technology to unlock their value,” he said.

Read more: Gold miner Petropavlovsk looks to gilded year after processing plant opens ahead of schedule

It is a piece of positive news for a company which has been the centre of a major battle for the board.

Co-founder Peter Hambro joined the board again a year ago after being forced out in a shareholder revolt. Maslovskiy also resigned amid the controversy. He returned to the company last year.