Press releases

Financial results for the first half of 2022

PJSC Polyus (LSE, MOEX — PLZL) ("Polyus", the "Company", and together with the Company subsidiaries, the "group") has today released its consolidated financial results for the first half of 2022.

Key highlights

  1. Total gold sales volumes in the first half of 2022 amounted to 1,015 thousand ounces, down 19% compared to the corresponding period of the previous year.
  2. Revenue for the reporting period totalled $1,852 million, down 19% compared to the first half of 2021.
  3. The group’s TCC for the first half of 2022 increased 12% year-on-year to $435 per ounce. This reflects lower average grades in ore processed at Olimpiada, Blagodatnoye and Natalka, ongoing inflation in consumables and wage indexation. An increase in the MET rate applied to Verninskoye due to the conclusion of the regional investment project ("RInvP") regime also impacted TCC.
  4. Adjusted EBITDA for the reporting period amounted to $1,215 million, a 26% decrease compared to $1,638 million in the first half of 2021, as result of lower gold sales volumes and higher TCC on a per ounce basis.
  5. Capital expenditures ("capex") for the first half of 2022 rose to $384 million, from $306 million in corresponding period of the previous year. This increase reflects higher capital spending across nearly all business units.
  6. The net debt (incl. derivatives)/adjusted EBITDA ratio increased to 0.8x in the first half of 2022, compared to 0.6x in the second half of 2021, reflecting a higher net debt position and decline in adjusted EBITDA over the last twelve months.


In March 2022, the group repaid the principal amount and accrued interest of its Notes due 2022 for total consideration of $494 million from its own cash.

In June 2022, the group launched consent solicitation process for its outstanding Notes due 2023, Notes due 2024 and Notes due 2028 in order to approve the amendment and waiver of certain terms of the Trust Deeds, Paying Agency Agreements and Terms and Conditions of these Notes and the replacement of BNY Mellon Corporate Trustee Services Limited with the new trustee.

Acquisition of the Chulbatkan deposit

In June 2022, the Company acquired 100% stake in the Chulbatkan gold deposit from the Highland Gold Mining group of companies. Consideration for the transaction was US$140 million, subject to further certain post-completion adjustments.

Events after the reporting date


As of September 2022, Consents from the Noteholders of the 2023 Notes, 2024 Notes and 2028 Notes were obtained, amendments to the documentation have been approved and I2 Capital Trust Corporation Ltd started to act as the new trustee in respect of the Notes.

CNY bond issue

In August 2022, the Company completed a debut 5-year yuan-denominated bonds offering (CNY 4.6 bln with a coupon rate of 3.80% per annum). The Company intends to use proceeds from the issue for general corporate purposes and investment projects.

Comparative financial results

$ million (if not mentioned otherwise) 1H 2022 1H 2021 Y-o-Y 2H 2021 H-o-H
Operating highlights
Gold production (koz)1 1,068 1,263 (15%) 1,454 (27%)
Gold sold (koz) 1,015 1,248 (19%) 1,488 (32%)
Financial performance
Total revenue 1,852 2,273 (19%) 2,693 (31%)
Operating profit 1,036 1,365 (24%) 1,594 (35%)
Operating profit margin 56% 60% (4) ppts 59% (3) ppts
Profit for the period 1,387 1,093 27% 1,185 17%
Earnings per share — basic (US Dollar) 10.26 8.11 27% 8.71 18%
Earnings per share — diluted (US Dollar) 10.24 8.08 27% 8.69 18%
Adjusted net profit2 792 1,051 (25%) 1,236 (36%)
Adjusted net profit margin 43% 46% (3) ppts 46% (3) ppts
Adjusted EBITDA3 1,215 1,638 (26%) 1,880 (35%)
Adjusted EBITDA margin 66% 72% (6) ppts 70% (4) ppts
Net cash flow from operations 701 1,379 (49%) 1,557 (55%)
Capital expenditure4 384 306 25% 622 (38%)
Cash costs
Total cash cost (TCC) per ounce sold ($/oz)5 435 388 12% 420 4%
All-in sustaining cash cost (AISC)
per ounce sold ($/oz)6
825 655 26% 765 8%
Financial position
Cash and cash equivalents 780 1,532 (49%) 1,343 (42%)
Net debt (incl. derivatives)7 2,452 2,366 4% 2,197 12%
Net debt (incl. derivatives)/adjusted EBITDA (x)8 0.8 0.6 33% 0.6 33%

Total Cash Costs

In the first half of 2022, the group’s TCC increased 12% to $435 per ounce compared to $388 per ounce in the first half of 2021. This reflects lower average grades in ore processed at Olimpiada, Blagodatnoye and Natalka (in line with the mining plan), ongoing inflation in consumables and wage indexation. An increase in the MET rate applied to Verninskoye due to the conclusion of the RInvP regime also impacted TCC.

TCC performance by mine, $/oz

In the reporting period, TCC at Olimpiada increased to $433 per ounce, a 13% increase compared to the first half of 2021, which, in addition to afore-mentioned factors, was driven by a decrease in by-product credit of antimony-rich flotation concentrate ($3 per ounce in the first half of 2022 compared to $13 per ounce in the first half of 2021). TCC at Blagodatnoye rose 14% year-on-year to $405 per ounce due to scheduled maintenance works. TCC at Natalka increased to $382 per ounce, up 2% year-on-year, driven by afore-mentioned factors, which was partially offset by the higher recovery rate. TCC at Verninskoye amounted to $404 per ounce, driven by an increase in the MET rate (from 2.4% to 6%) due to the conclusion of the RInvP regime applicable for the deposit. At Kuranakh, TCC rose to $645 per ounce, up 17% compared to corresponding period of the previous year, driven by scheduled maintenance works. At Alluvials, TCC stood at $1,123 per ounce.

All-in sustaining costs (AISC)

In the first half of 2022, the group’s AISC increased to $825 per ounce, up 26% compared to the first half of 2021, reflecting higher TCC and sustaining capital expenditures across all deposits as well as higher levels of stripping activities in line with the mining schedules at Blagodatnoye, Natalka and Verninskoye.

Despite an increase in TCC and AISC, Polyus still resides in the first decile of the global cash cost curve amid inflationary pressures in global mining industry.

Debt management

The Company’s gross debt decreased to $3,232 million, compared to $3,540 million as at the end of 2021.

As at 30 June 2022, the Company’s estimated cash position declined to $780 million (31 December 2021: $1,343 million; 30 June 2021: $1,532 million). The Company’s estimated net debt stood at $2,452 million (31 December 2021: $2,197 million; 30 June 2021: $2,366 million).

Among other factors, the change in cash position mainly reflects a redemption of Notes due 2022 (in a total amount of $494 million) as well as acquisition of 100% stake in the Chulbatkan gold deposit for total consideration of $140 million.

Debt maturity schedule (as at 30 June 2022)9, $ million


In the first half of 2022, capital expenditures increased to $384 million, from $306 million in the first half of 2021, reflecting higher capital spending across almost all business units.

The Company continues to progress its growth projects. Key highlights:

  • At Blagotadnoye, the main contractor for the Mill 5 project was in the final stage of the closure of the thermal envelope of the buildings of comminution and hydromet circuits. Polyus is currently advancing the installation of the SAG-mill. Foundation works for an in-pit crushing and conveying (IPCC) system are also in progress.
  • At Kuranakh, Polyus entered an active phase of construction activities under the Kuranakh mill expansion to 7.5 mpta (stage 4) project. Reconstruction of the tailings storage facilities is ongoing.
  • At Sukhoi Log, the Company is proceeding with project design having completed mine planning and processing plant design and progressed with the general layout, infrastructure and tailings storage facility design. The Company has defined the parameters of the main technological equipment, and also commenced analysis of alternate equipment suppliers and flowsheet parameters to accommodate for the possible supply chain restrictions as well as restrictions on engaging international engineering companies.

Capex breakdown

$ million

1H 2022

1H 2021


2H 2021


Olimpiada 64 64 - 133 (52%)
Blagodatnoe 76 67 13% 171 (56%)
Natalka 46 45 2% 65 (29%)
Verninskoye 29 29 - 50 (42%)
Kuranakh 39 25 56% 69 (43%)
Sukhoi Log 31 22 41% 47 (34%)
Alluvials 13 10 30% 17 (24%)
IT capex 34 16 N.A. 35 (3%)
Other10 52 28 86% 35 49%







Items capitalised11, net 118 96 23% 131 (10%)
Change in working capital for purchase of property, plant and equipment 49 15 N.A. (40) N.A.

Purchase of PP&E






In the first half of 2022, the total cash amount spent on the purchase of PP&E increased to $551 million, compared to $417 million in the first half of 2021.


Investor and Media contact
Victor Drozdov, Director Communications & Investor Relations (CIR) Department
+7 (495) 641 33 77

Forward looking statement

This announcement may contain "forward-looking statements" concerning Polyus and/or Polyus Group. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus Group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus Group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as of the date of this announcement. Polyus and/or any Polyus Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.

1Gold production is comprised of 1,064 thousand ounces of refined gold and 4 thousand ounces of gold in flotation concentrate in the first half of 2022.
2Adjusted net profit is defined by the group as net profit / (loss) for the period adjusted for impairment loss / (reversal of impairment), unrealised (gain) / loss on derivative financial instruments, foreign exchange (gain) / loss, gain on acquisition of subsidiaries and associated deferred and current income tax related to such items.
3Adjusted EBITDA is defined by the group as profit for the period before income tax, depreciation and amortisation, (gain) / loss on derivative financial instruments (including the effect of the disposal of a subsidiary and subsequent accounting at equity method), finance costs, interest income, foreign exchange loss / (gain), impairment loss / (reversal of impairment), (gain) / loss on property, plant and equipment disposal, expenses associated with an equity-settled share-based payment plan, expenses associated with covid-19, gain on acquisition of subsidiaries and special charitable contributions as required to ensure calculation of the Adjusted EBITDA is comparable with the prior period.
4Capital expenditure figures are presented on an accrual basis.
5TCC is defined by the group as the cost of gold sales, less property, plant and equipment depreciation and amortisation and change in allowance for obsolescence of inventory, expenses associated with covid-19 and adjusted by non-monetary change in inventory. TCC per ounce sold is the cost of producing an ounce of gold, which includes mining, processing and refining costs. The group calculates TCC per ounce sold as TCC divided by total ounces of gold sold for the period. The group calculates TCC and TCC per ounce sold for certain mines on the same basis, using corresponding mine-level financial information.
6AISC is defined by the group as TCC plus selling, general and administrative expenses, stripping activity asset additions, sustaining capital expenditures, unwinding of discounts on decommissioning liabilities, provision for annual vacation payment, employee benefit obligations cost, and change in allowance for obsolescence of inventory less amortisation and depreciation included in selling, general and administrative expenses. AISC is an extension of TCC and incorporates costs related to sustaining production and additional costs which reflect the varying costs of producing gold over the life-cycle of a mine. The group believes AISC is helpful in understanding the economics of gold mining. AISC per ounce sold is the cost of producing and selling an ounce of gold, including mining, processing, transportation and refining costs, general costs from both mine and alluvial operations, and the additional expenditures noted in the definition of AISC. The group calculates AISC per ounce sold as AISC divided by total ounces of gold sold for the period.
7Net debt is defined as non-current borrowings plus current borrowings less cash and cash equivalents and bank deposits. Net debt also includes assets and liabilities under cross-currency and interest rate swaps at the reporting date. Net debt excludes derivative financial instrument assets/liabilities other than cross-currency and interest rate swaps, site restoration and environmental obligations, deferred tax and other non-current liabilities. Net debt should not be considered as an alternative to current and non-current borrowings, and should not necessarily be construed as a comprehensive indicator of the group’s overall liquidity.
8The group calculates net debt (incl. derivatives) to Adjusted EBITDA as net debt (including derivatives) divided by Adjusted EBITDA for the last twelve months
9The breakdown is based on actual maturities and excludes $37 million of banking commissions and lease liabilities recognised under IFRS 16 as of 30 June 2022 in amount of $140 million (the remaining $2 million of the total amount of lease liabilities of $142 million presented in the Note 16 and included in the bridge).
10Reflects expenses related to exploration business unit and other unallocated CAPEX.
11Including capitalised stripping costs.