News and Press-releases

GV Gold Financial Results for H1 2018

GV Gold (Vysochaishy, PJSC), together with its subsidiaries (“GV Gold”, “Vysochaishy” or the “Company”), one of the largest and fastest growing gold producers in Russia, announces its unaudited consolidated financial results for the six months ended 30 June 2018 (H1 2018).

Financial Highlights

  • Total gold sales increased by 66% y-o-y to 113 koz, including 5 koz of gold contained in gravity and flotation concentrate.
  • Revenue totaled USD 146 million, up 74% y-o-y.
  • The average refined gold selling price increased by 6% y-o-y to USD 1,312 per ounce
  • Тotal cash cost (TCC)[1] rose from USD 568 per ounce to USD 658 per ounce, primarily due to the commissioning of the Taryn and Ugakhan Mines, higher production costs, and lower average grades in ore processed at the Vysochaishy Mine.
  • All-in sustaining cost (AISC)[2] was USD 793 per ounce, up 9% y-o-y, mainly as a result of the increase in TCC.
  • Adjusted EBITDA[3] increased by 74% to USD 57 million, as higher costs were fully mitigated by stronger gold sales and improvements to operational efficiency. The adjusted EBITDA margin was 39%.
  • Operating profit increased by 52% to USD 43 million.
  • Net profit totaled USD 19 million (compared to USD 21 million in H1 2017). The decrease y-o-y was due to the effect of FX losses.
  • Net debt[4] totaled USD 177 million as of 30 June 2018. Leverage remains stable, with an LTM Net Debt/EBITDA ratio of 1.3x at the end of the reporting period and a comfortable repayment schedule.

Operational Highlights

  • Total gold output amounted to 128 koz in H1 2018, up 76% y-o-y, as a result of the commissioning of new production capacities at the Drazhnoye and Ugakhan deposits in 2017 and the ramp-up of output at existing assets of the Irkutsk and Aldan business units
  • The new capacities led to a substantial expansion of the Company’s mining and processing volumes by 105% and 62%, respectively.

GV Gold CEO German Pikhoya said:

“In H1 2018, the Company delivered strong operational and financial performance, driven by the successful implementation of strategic initiatives and consistent efforts to establish GV Gold as a major Russian gold producer. The Company continued to deliver against previous growth guidance. As a result, revenue increased by 74% y-o-y to USD 146 million — the highest half-year result in the Company’s history.

EBITDA also grew significantly in H1 2018, increasing by 66% y-o-y to USD 57 million. Expected cost increases were partially offset by operational improvements at the Company’s production assets. The EBITDA margin remained stable at 39%.

It is important to note that the Company traditionally pursues a balanced financial policy. In H1 2018, the Net Debt/EBITDA ratio remained at a comfortable 1.3x. Given that the Company has passed the peak of its capital investments, this creates additional opportunities going forward to achieve the desired balance between targeted investments in future growth and the profits that shareholders require.

Strong operational performance, coupled with further implementation of strategic projects, form a solid foundation for the Company to achieve its operational and financial objectives for the year.”

Key Financial Results for the Six Months Ended 30 June 2018
H1 2018 H1 2017 Y-o-Y, %
Financial performance
Gold sold, koz 113 68 66%
Average refined gold selling price, USD /oz 1,312 1,239 6%
Revenue, USD million, of which: 146 84 74%
Revenue from gold sales, USD million 141 84 68%
Revenue from concentrate sales, USD million 5
Operating profit, USD million 43 28 52%
Net profit, USD million 19 21 -6%
Adj. EBITDA, USD million 57 33 74%
Adj. EBITDA margin, % 39% 41% -4%
Net cash inflow from operations, USD million 36 -9
Total cash cost (TCC), USD /oz 658 568 16%
All-in sustaining cash cost (AISC), USD /oz 793 726 9%
Financial position
Cash and cash equivalents, USD million 37 35 6%
Net debt, USD million 177 175* 1%
Net debt/EBITDA, х 1.26 1.40 −10%
Operating highlights
Ore mined, kt 3,639 1,772 105%
Ore processed, kt
3,535 2,187 62%
Total gold production, koz 128 73 76%

*As of 31 December 2017


In the reporting period, the Company’s revenue totaled USD 146 million, up 74% y-o-y, due to higher volumes of gold produced (+76%) and sold (+66%) as a result of the commissioning of two new mines (Taryn and Ugakhan) and higher gold production at all production assets. The average selling price was USD 1,312 per ounce (+6% y-o-y).


Adjusted EBITDA for H1 2018 rose by 74% to USD 57 million, as anticipated higher costs were fully offset by an increase in total gold sold, as well as by operational improvements. The adjusted EBITDA margin was 39%, compared to 41% a year earlier.

Total Cash Costs

In the reporting period, the Group’s TCC increased by 16%, to USD 658 per ounce. This increase was due to the commissioning of the Taryn and Ugakhan mines, and lower average grades of ore processed at the Vysochaishy Mine. Despite this, GV Gold’s TCC still remains relatively low compared to other Russian gold producers.

At the Vysochaishy Mine, TCC decreased by 14% as a result of higher ore throughput and higher recovery rates, as well as scheduled work to improve operational performance.

At the Ugakhan Mine, the second enterprise commissioned in 2017, TCC totaled USD 889 per ounce. This was higher than the Group’s average due to higher power supply costs, as the mine was supplied in H1 2018 by diesel power generators, which operated until June 2018. The Company expects these costs to decrease by the end of the year following the Mine’s connection to the grid power supply in May 2018.

At the Taryn Mine, TCC was USD 643 per ounce. The Company expects this parameter to improve further by the end of the year.

At Bolshoy Kuranakh, TCC rose by 8% y-o-y to USD 1,512 per ounce due to intensive scheduled preparations for the operational season.

TCC performance by mine, USD /oz H1 2018 H1 2017 Y-o-Y, %
Golets Vysochaishy 452 528 -14%
Ugakhan 889
Taryn 643
Bolshoy Kuranakh 1,512 1,398 8%
GV Gold 658 568 16%

All-In Sustaining Costs

In H1 2018, Group AISC rose by 9% y-o-y from USD 726 per ounce to USD 793 per ounce, mainly driven by an increase in TCC while maintaining capex at the same level as previously.

AISC performance by mine, USD /oz
H1 2018 H1 2017 Y-o-Y, %
Golets Vysochaishy
818 664 23%
Bolshoy Kuranakh
2,147 2,085 3%
GV Gold 793 726 9%

Financial position

As at 30 June 2018, net debt totaled USD 177 million. Leverage remains stable, with an LTM Net Debt/EBITDA ratio of 1.3x at the end of the reporting period and a comfortable repayment schedule.

Outlook for 2018

The Company confirms its 2018 production target of 280-300 koz of gold.


Investor Relations

Vasily Migunov, Deputy CEO for IR and Capital Markets

+ 7 495 287 88 40

Press Office

Tatiana Demyanova, Deputy CEO for Public Relations

+ 7 495 287 88 40


Denis Denisov

+7 495 363 28 49

Company profile

GV Gold (Vysochaishy, PJSC) is one of Russia’s largest and fastest growing gold producers. The Company develops open pit deposits and washes gold at the country’s largest alluvial deposit. In 2017, the Company produced 225 koz of gold, making it the seventh-largest gold miner in Russia. GV Gold boasts an extensive resource base, with JORC reserves and resources estimated at 4.4 Moz and 7.0 Moz, respectively.

GV Gold’s key operating assets are located in the Irkutsk Region and the Republic of Sakha (Yakutia). The Company operates six mines with a total capacity of 8 Mtpa of ore, and holds 20 mining and exploration licences.

The Company adheres to high standards of corporate governance and has a transparent ownership structure, with BlackRock among its shareholders (17.99%).

For further information, please visit

Forward looking statements

This release may contain “forward-looking statements” regarding GV Gold (Vysochaishy, PJSC) and (or) its subsidiaries. The words “will”, “can”, “must”, “should”, “will continue”, “possibility”, “believes”, “expects”, “intends”, “plans”, “estimates” and other similar phrases are largely indicators of forward-looking statements. Forward-looking statements contain elements of risk and uncertainty, as a result of which actual results can differ dramatically from the figures listed in the forward-looking statements. Forward-looking statements contain statements regarding future capital expenditures, strategies for business operations and management, as well as development and expansion of GV Gold (Vysochaishy, PJSC) and (or) its subsidiaries. Many of those risks and uncertainties pertain to factors that cannot be controlled or quantified by GV Gold (Vysochaishy, PJSC) and (or) its subsidiaries, so the content of the statements should not be treated as definitive because it is provided strictly as at the date of the statement. GV Gold (Vysochaishy, PJSC) and (or) any of its subsidiaries does not make any commitment and does not plan to provide updates to the forward-looking statements, except where required by applicable law.

[1] TCC is defined by the Company as cost of gold sales (less depreciation and amortization of property, plant and equipment and intangible assets that are recognized in cost of goods sold). TCC per ounce is calculated as TCC divided by total gold sold, including gold in concentrate.

[2] AISC per ounce sold is defined as TCC plus administrative expenses (less depreciation and amortization of property, plant and equipment and intangible assets that are recognized in administrative expenses), equipment acquisition costs, construction and design costs required for sustaining ongoing operations. General administrative expenses are excluded for the purpose of calculating AISC for separate deposits, but are included in total AISC for the Group. AISC per ounce is defined as AISC divided by total gold sold, including gold in concentrate.

[3] Adjusted EBITDA is defined by the Company as profit before finance costs, income tax, depreciation and amortization, write-down and impairment costs related to exploration and appraisal of mineral resources and excluding financial income. Adjusted EBITDA is based on the Company’s audited annual consolidated IFRS financial accounts for the reporting period.

[4] Net debt is defined as the amount of current and non-current liabilities on loans and borrowings as well as current and non-current liabilities on financial leases, minus cash and cash equivalents as of the reporting date. This calculation is based on the Company’s audited annual consolidated IFRS financial accounts for the reporting year.