HGM might increase precious metals output by 24.5% by 2014

Highland Gold Mining (Great Britain) by 2014 might increase the production of precious metals by 24.5% to 270 thousand ounces in gold equivalent (8.4 tons) against 2012, analysts of Sberbank CIB forecast.

The company has a good perspective of income growth: the production in 2012-2014 might rise from 217 to 270 thousand ounces while the expenditure won’t almost change.

According to Sberbank CIB, the company’s EBITDA in 2012 will be $171 bln, in 2013 will rise to $190 mln, 2014 – to $238 mln.

The current portfolio of HGM’s projects, analyst think, will provide the company’s production of 270-300 thousand ounces in gold equivalent in 2017-2020. In 2016 the company will close the Mnogogvershinnoe deposit as a result of reserves’ exhaustion. This loss is expected to be replaced by the Russian deposits “Klen” and “Lyubavinskoe” as well as the Unkurtash project in Kirghizia.

In Jan 2013 it became clear about the possible purchase of the hold ore deposit Kekura in Chukotka by HGM. Analysts of Sberbank CIB think if the deal is signed or the company purchases a similar by the scale project, it will replace the Unkurtash deposit in the production plans.

We assess the net present value of the Kekura deposit at $300 mln. Mass media thinks the purchase of Kekura might cost $300-400 mln for Highland Gold Mining. It is impossible to check the information but we doubt the company will agree to overpay for the asset, the analysts write.

Highland Gold Mining is among the top-10 largest gold extraction companies of Russia, works in the Khabarovsk and Trans-Baikal regions,Chukotka,Kirghizia. On the results of 2012 the company increased its total gold production by 18% to 216.9 thousand ounces (6.7 tons), which is a bit higher than the forecast of 200-215 thousand ounces. The results of the year comprise the production at the Mnogovershinnoe, Belaya Gora (Khabarovskr region) and Novoshirokinskoe (Trans-Baikal region) deposits.

HighlandGold Mining plans to increase the production to 225-240 thousand ounces of gold and gold equivalent.

 

 

 

 

 

http://www.mineral.ru/News/51990.html

Translated by Galiya Musabekova

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