Polyus Gold International Ltd, Russia’s largest producer of the metal, is delaying the full start of output at its main untapped field in the country’s Far East until next year after slower than expected construction.
Natalka is expected to begin full operations in “summer” of 2014 instead of the end of this year, Polyus said today in a regulatory filing. Mills for a plant are being shipped to the Magadan port, 400 kilometers (250 miles) from the deposit. The company is considering a partial start during the winter of 2013-2014, according to the statement.
Polyus plans to invest as much as $1.2 billion this year on this project, out of total capital spending of as much as $1.8 billion, according to a company statement in January. Natalka’s planned annual output of about 500,000 ounces of gold is 30 percent of last year’s total production.
“The project is large and difficult and it’s quite natural for any such projects to be delayed a bit,” Valentina Bogomolova, an analyst at Uralsib Capital in Moscow, said by phone. “Investors may show slightly negative sentiment toward the company’s shares.”
Polyus Gold shares fell 2.4 percent to 214 pence apiece by 10:05 a.m. in London, the biggest intraday decline in more than two weeks.
Polyus Gold targets 2013 output of 1.59 million to 1.68 million ounces, according to today’s statement. This compares with last year’s 1.57 million ounces, excluding Kazakh operations, which were sold last month.
Net income jumped 71 percent last year to $981 million, while adjusted earnings before interests, tax, depreciation and amortization rose 22 percent to $1.38 billion.