VLADIVOSTOK – Polyus, Russia's largest gold producer, is on track to boost production to 2.8-million troy ounces and to reduce its capital expenditure in 2019, its CEO Pavel Grachev told Reuters.
Its 2018 production is on track to reach the upper end of its forecast range of 2.375-million to 2.425-million troy ounces, Grachev said on the sidelines of the Eastern Economic Forum in the Russian Pacific town of Vladivostok.
The company said with the ramp-up of production at its Natalka gold deposit in Russia's far east at its final stage, it expects capital expenditure to fall to $650-million in 2019 and to $550-million in 2020 from $850-million in 2018.
Natalka is expected to reach full capacity in coming months.
The gold miner had said previously it could consider increasing its free float to 25% to 30% from 16%, in the mid- to long term, but Grachev said there were no plans to do it now.
"Market conditions are needed to do this, there are none now," Grachev said.
Polyus has not been targeted by the US sanctions. However, Washington included Suleiman Kerimov along with some other Russian businessmen on the SDN (Specially Designated Nationals) list in April. His son, Said Kerimov, controls the company.
Polyus's 2019 budget will use the same estimates for the gold price and rouble/dollar exchange rate as its 2018 budget - $1 200 per troy ounce of gold and 60 roubles per dollar, Grachev said.
He said the company's hedging programme would not be extended once it expires in 2019.