Polymetal saw its share price rise 10.2% to 373.6p in early morning trading on Wednesday following an update to investors regarding the impact of sanctions on the mining group’s operations.
The mining firm has been through an incredibly turbulent period after Russia’s invasion of Ukraine on 24 February 2022, with the group’s spiralling conditions ending with its removal from the FTSE 100 on 21 March 2022.
The company confirmed that targeted sanctions against its operations remained unlikely but not impossible, and that it has planned ahead of any impact proactively.
Polymetal reported a net debt increase to $1.9 billion on 29 March against $1.6 billion in December 2021, which the group attributed to seasonal working capital increase and accelerated procurement.
The firm stated that it has been using Russian banks for shot-term capital financing while it awaits additional liquidity in Q2 2022.
Polymetal reportedly has $0.4 billion in cash and cash equivalents held by non-sanctioned entities alongside $0.5 billion of available undrawn credit lines.
The company confirmed that its operations in Russia and Kazakhstan are currently continuing undisrupted, and its projects in advanced stages of development are reportedly on track to be commissioned on schedule.
Polymetal added that its POX-2 project will experience a 3-6 month slippage due to logistical challenges and its early stage projects will be delayed by a year.
The firm’s Pacific POX project was noted to be suspended indefinitely while the company look for a potential re-site alternative for the venture in Kazakhstan, and its Greenfield exploration budgets are set to be cut 50%, which will predominantly impact its junior joint-ventures.
Polymetal confirmed that its Brownfield explorations schedule and volumes will remain unaffected.
The mining company also added five new directors to its board earlier this month and is scheduled to confirm shareholder approval at its AGM on 25 April.
“It is my opinion that investors, private and institutional, that collectively control over 75% of this company deserve a Board that will lead the company through this turbulent time, preserving and hopefully rebuilding the value of their investment as well as protecting the livelihood of thousands of employees, contractors, suppliers and other stakeholders”, said Riccardo Orcel, Chair of the Board.
