JOHANNESBURG (miningweekly.com) – Precious metals miner Polymetal has increased its revenue by 15% to $683-million in the first half of 2017, but the strong Russian rouble has eaten into its profit.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased by 12% year-on-year to $257-million in the first six months of the year, which Polymetal said was the result of higher costs incurred owing to a stronger rouble. 

Net earnings fell by 27% year-on-year to $120-million, reflecting the decrease in Ebitda.

The rouble strengthened by 21% against the US dollar in the six months under review, which had a negative impact on the dollar value of the group’s rouble-denominated operating costs.

The appreciation of the rouble pushed up total cash costs by 28% to $545/oz of gold equivalent. All-in sustaining costs (AISC) increased by 20% to $906/oz of gold equivalent.

The revenue growth was driven by higher production, with gold-equivalent ounces increasing by 7% year-on-year to 558 000 oz, comprising 389 000 oz of gold, 12.8-million ounces of silver, 1 000 t of copper and 2 300 t of zinc.

Gold sales increased by 19% year-on-year to 380 000 oz, while silver sales fell by 5% year-on-year to 12.4-million ounces. Average realised gold and silver prices remained unchanged.

Polymetal CEO Vitaly Nesis said the group expected stronger production in the second half of the year, which should stand it in good stead to achieve its target of 1.40-million ounces of gold equivalent.

“Production will be driven by the seasonal concentrate de-stockpiling at Mayskoye, heap-leach production at Svetloye and higher throughput at the Amursk POX plant,” the company stated.

Costs should also come down in the coming months, with the group having set a total cash cost range of $600/oz to $650/oz and an AISC range of $775/oz to $825/oz of gold equivalent for the second half.

The Polymetal board, chaired by Bobby Godsell, declared an interim dividend of $0.14 a share for the six months ended June 30.

The company’s share price gained 2.91% to 973p a share on Wednesday morning, in line with other gold producers as the gold price rallied to $1 300/oz, its highest level this year, after North Korea’s latest missile move.

Polymetal has operations in Russia, Kazakhstan and Armenia.