PolymetalInternational Plc's gold equivalent production in the secondquarter dropped 12% year over year to 262,000 gold equivalent ounces, mainlydue to the planned grade declines at Okhotsk and Omolon mine, and the lower grade performance atDukat.

The company said July 19 that it produced 169,000 ounces of gold,7.0 million ounces of silver, and 707 tonnes of copper in the quarter, comparedto 186,000 ounces of gold, 8.9 million ounces of silver, and 138 tonnes ofcopper a year ago.

Sales revenue in the quarter also dropped 12% to US$307million, due to a 14% reduction in gold sales to 157,000 ounces, and a 26% fallin silver sales to 6.5 million ounces. Copper sales totaled 131 tonnes.

In the first half of the year, output was down 8% year overyear to 522,000 gold equivalent ounces, in line with the production plan.

Revenue from first-half sales also saw an 8% drop to US$593million.

The company expects to achieve increased production in thesecond half on the back of seasonal de-stockpiling of the Mayskoye concentrate,the start-up of the Svetloye heap leach at Okhotsk, and stronger grades atDukat and Okhotsk.

Polymetal said it is on track to meet its full-year guidanceof 1.26 million ounces of gold equivalent at total cash costs of US$525 pergold equivalent ounce to US$575 per gold equivalent ounce and all-in sustainingcosts of US$700 per gold equivalent ounce to US$750 per gold equivalent ounce.

The acquisition of the Komarovskoye mine in Kazakhstan fromGlencore Plc isexpected to close in the third quarter, and open pit mining will startimmediately following completion, the company added.