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Petropavlovsk expects to hit lower end of FY'16 gold output after flooding

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Petropavlovsk expects to hit lower end of FY'16 gold output after flooding

PetropavlovskPLC expects gold production this year to be at the lower end of itsoriginal guidance ofabout 460,000 ounces to 500,000 ounces due to the effects of severe flooding.

The company expects capital expenditure to total about US$70million in the full year, including about US$60 million for development andmaintenance, and about US$10 million for exploration, it said July 19.

The full-year total average cash costs are estimated atabout US$700 per ounce, while costs in the first half are anticipated to beabout US$690 per ounce due to the company's further cost-cutting program and aweak Russian ruble. Total cash costs in the first half of 2015 totaled US$767per ounce.

In the first half, Petropavlovsk produced 187,400 ounces ofgold, a 22% year-over-year decrease, mainly due to scheduled processing oflower grade material and severe flooding.

Gold sales reached 195,400 ounces in the half, down from229,700 ounces a year ago. The higher-than-production gold sales were theresult of a reduction in gold in circuit in the first quarter.

Production in the second quarter dropped to 95,300 ounces,from 127,500 ounces a year ago.