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Russia’s largest gold miner Polyus on Tuesday posted a 183% jump in first-half profit to $1.58 billion despite Western sanctions, boosted by higher global prices for gold that hit successive record highs this year.
Its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 20% to $2.02 billion on revenue up 16% to $2.73 billion, Polyus said, adding the rise in EBITDA reflected “higher average gold prices during the reporting period”.
Gold has risen about 22% so far this year, striking a peak of $2,531.60 last week on expectations of imminent US interest rate cuts and concerns about conflict in the Middle East.
Polyus said its gold output in the first half of the year rose 2% to 1.47 million ounces. The company increased its production guidance for 2024 to 2.75-2.85 million ounces from 2.7-2.8 million ounces previously.
The United States and Britain imposed sanctions against Polyus in 2023 over Russia’s actions in Ukraine, a step that played some part in the company delisting its depositary receipts from the London Stock Exchange.
Polyus said that it will begin pilot processing of ore from Sukhoi Log, the company’s new flagship project in Eastern Siberia, in the second half of the year. Sukhoi Log is expected to go into full operation in 2027, doubling Polyus’ gold output.
The ore will be processed at the nearby Verninskoye plant while mining at the Verninskoye deposit will be suspended until 2027. Verninskoye’s deposit accounted for 8.3% of Polyus gold output in the first half of 2024.
Polyus sees reserves at the Sukhoi Log gold deposit at 540 million tonnes of ore, containing 40 million ounces of gold, but the costs of the $3.3 billion project are currently under review due to Western sanctions and the company is due to provide an update in the fourth quarter.
(By Anastasia Lyrchikova, Lucy Papachristou and Gleb Bryanski; Editing by Jason Neely, Mark Potter and Susan Fenton)
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