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Petropavlovsk Says Refinancing Is Priority as It Sees Lower Debt

July 23 (Bloomberg) -- Petropavlovsk Plc, a producer of gold in Russia, said restructuring its $1.15 billion of debt is a priority.

“It’s something that we have been working on for some time,” Chairman Peter Hambro said on a conference call with reporters today after the London-based company’s first-half production report. The debt market “seems to be perfectly reasonable,” he said.

Petropavlovsk is seeking to cut debt that has weighed on its stock amid gold’s steepest quarterly drop in at least 90 years. Net debt peaked earlier this year at $1.2 billion and would fall below $1 billion by the end of 2013, the company said in a statement.

The stock, which slumped to a record-low on July 10, advanced 9.1 percent to 104.75 pence by 9:28 a.m., trimming this year’s decline to 71 percent.

Petropavlovsk has cut costs and jobs to reduce cash operating expenses by 9 percent to 12 percent in the second half of the year, it said.

Petropavlosk reiterated its full-year gold production target of 760,000 to 780,000 ounces as it reported that first-half output rose 6 percent to 294,700 ounces.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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