Petropavlovsk posts 1H 2010 net loss of $55 million

London-listed Russian gold miner Petropavlovsk PLC has posted a 1H 2010 net loss of $55 million under IFRS.

The net result marked a sharp downturn from a net profit of $74.6 million posted in 1H 2009, with underlying EBITDA also falling year on year to $50 million in 1H 2010 from $115.9 million, on the back of revenues declining to $195.7 million in the first six months of 2010 from $214.1 mullion in the same period last year.

According to the statement, the downturn was mostly due to the gold production slipping down by 26% year on year to 166,300oz in H12010 from 209,538oz in the H1 2009, which in turn was caused by the processing of lower grades, while substantial stripping work of higher-grade areas was undertaken at both Pioneer and Pokrovskiy during the period.

However, Peter Hambro, Petropavlovsk chairman, was optimistic when commenting on the results and noted that 1H 2010 saw a number of achievements, with a major upgrade in Pioneer’s process capacity, the Kuranakh iron ore mine now being in production, Malomir having started to treat gold ore on 25 August and Albyn being on track for launch in 2011. This business expansion, coupled with sound production results enabled the group to perform well, Hambro concluded.

“In my view, it is a remarkable success to have delivered a 417% increase in ore milled and a corresponding 59% decrease in costs per tonne at Pioneer, which is now a world-scale bulk tonnage operation with excellent reconciliation between predicted and recovered ounces,” he said. “At the same time, we have acquired an important new license area around Pioneer, discovered a new high-grade ore column at the Bakhmut area of Pioneer, and have acquired approximately 7.4 million ounces of Russian Classification System reserves and resources in the Krasnoyask Region.”