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GV Gold reports 2016 financial and production results

On April 24, 2017, GV Gold (Vysochaishy, PJSC) published its IFRS financial results for 12 months ended on December 31, 2016. The consolidated financial statements were audited by BDO-Unicon, JSC.

Production Results

In 2016 GV Gold produced 5.1 t (164 koz) of gold: 4.8 t (154 koz) of gold were produced by the Irkutsk project assets, 0.3 t (10 koz) — by the Aldan project assets.

In connection with the gold price growth to the level of RUB 2,890/g (USD 1,175 /oz) in Q1 2016, the Company made a decision on scheduled processing of the low grade ore at the Irkutsk project — 1.33 g/t (-8%). Despite a 10 % decrease in the scopes of production, the profit margin of the production did not decrease and remained at the level of the previous year.

Financial Results

In 2016, the average RUB gold selling price increased from RUB 2,270 /g to RUB 2,689 /g (+18%), the average USD gold selling price increased from USD 1,158 /oz to USD 1,248 /oz (+8%).

In the reporting period, the revenue of GV Gold increased to RUB 13.7 billion (+7% as compared to 2015). The EBITDA increased by 7% to RUB 7.6 billion. The EBITDA margin remained at the level of 56%.

The net profit grew by 1.6 times and totaled RUB 6.4 billion.

The cost of sales grew by 10 % up to RUB 5.8 billion. The total cash costs increased up to RUB 1,201 /g (+21%).

The costs growth was explained by an increase of the services and equipment costs as well as by an increase of the mining operations scopes.

Key Highlights
Index Units 2016 2015
Gold produced kg 5,096 5,641
koz 164 181
Gold sold kg 5,076 5,631
koz 163 181
Average gold selling price RUB /g 2,689 2,270
USD /oz 1,248 1,158
Proceeds from the sale of gold RUB M 13,647 12,784
USD M 204 209
Gross Profit RUB M 7,922 7,564
Net Profit RUB M 6,414 4,089
EBITDA RUB M 7,621 7,106
USD M 114 117
EBITDA Margin % 55.8 55.5
Total cash outlay RUB /g 1,201 989
USD /oz 556 507
Net debt/EBITDA х 0.79 0.45

2017 Plans

In 2017, GV Gold will commission two new mines — Taryn and Ugakhan as well as the second large-capacity dredge will start working at the Bolshoi Kuranakh placer deposit.

The current production facilities will continue the operations aimed at the production efficiency improvement.