Russian gold producer PJSC Polyus has beaten both its original and increased production guidance with output climbing 12% year over year to 1.97 million ounces in full-year 2016.

The company's initial production target for last year was 1.76 million to 1.8 million ounces of gold, and its revised forecast was 1.87 million to 1.9 million ounces.

Polyus said Jan. 23 that the increase was driven by higher production volumes at all the hard rock deposits.

"The reconfiguration of mill No. 1 was completed in September 2016 and it is now processing higher grade Olimpiada ores," CEO Pavel Grachev said.

"Meanwhile, significant progress has been made on debottlenecking at Olimpiada, Blagodatnoye, Verninskoye and Kuranakh. The first stages of these projects are now complete, delivering over 2.0 million tons per annum of additional processing capacity."

Volumes of ore processed for the full year rose 7% to 26.4 million tons compared to 2015.

Meanwhile, fourth-quarter total gold output jumped 23% year over year to 573,000 ounces, while volumes of ore processed climbed 10% to 7.0 million tons.

Polyus expects total gold production to exceed 2.0 million ounces in 2017 and has set a target of between 2.075 million and 2.125 million ounces.

Annual gold sales are estimated to have risen 13% to US$2.43 billion, while quarterly gold sales are estimated to be 26% higher at US$660.0 million compared to the prior corresponding periods.

Separately, the company announced Jan. 23 that its board has agreed to act as guarantor for Polyus Gold International Ltd.'s US$500 million senior unsecured notes.

The 4.699% notes due March 28, 2022, which were issued in October last year, are also guaranteed by PJSC Polyus subsidiary JSC Polyus Gold.