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GV Gold publishes its 2020 audited IFRS financials

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Global Mining Review,

GV Gold (Vysochaishy, PJSC), together with its subsidiaries, one of Russia’s largest and fastest-growing gold mining companies, has announced its audited IFRS financials for the twelve month period ended 31 December 2020.

Financial highlights

  • The company’s total gold sales stood at 276 000 oz, up 14% y-o-y.
  • Revenue reached US$471 million (+41% y-o-y).
  • Total cash costs (TCC) decreased by 4% y-o-y to US$694/oz. This decrease was driven mainly by the 14% y-o-y increase in total gold sales, the completion of the Taryn Mine open-pit reconstruction project and the depreciation of the Russian ruble.
  • All-in sustaining costs (AISC) decreased by 12% y-o-y to US$822/oz as a result of the 4% y-o-y decrease in ??? and the 23% y-o-y decrease in the sustaining costs for capital overburden stripping.
  • Adjusted EBITDA doubled, reaching the record-breaking figure of US$248 million on the back of larger tonnages of gold produced and higher gold prices, as well as the effect of the operating efficiency improvement program.
  • Adjusted EBITDA margin reached one of the highest levels in the company’s history, 53%, having increased by 17% y-o-y.
  • Net profit grew by 90% y-o-y and totalled US$137 million.
  • Capital expenditures increased to US$109 million (+9% y-o-y) due to investments in open-pit development at the Golets Vysochaishy and Ugakhan Mines.
  • Net debt decreased by 6% y-o-y and totalled US$191 million as of 31 December 2020. The net debt / adjusted EBITDA ratio decreased significantly from 1.69x to 0.77x.

2021 guidance

  • The company expects to produce 290 000 - 300 000 oz of gold in 2021.
  • The company will carry on implementing its organic growth program aimed at improving the quality of existing assets and optimising costs through improved operating efficiency.

Statement from the CEO of GV Gold, Vladislav Barshinov:

“In 2020, GV Gold demonstrated excellent results, having once again confirmed that we chose the right strategy in deciding to focus on organic growth and optimization of production processes aimed at improving the efficiency of existing processing plants.

“In the reporting period, the company showed confident progress in several parameters. First and foremost, EBITDA and net income reached record-breaking values, having demonstrated double-digit growth for the year. At the same time, EBITDA margin reached 53%, which is 17% higher than the previous year. Over the year, GV Gold focused mainly on its operating efficiency. The company’s consistent efforts in this area at all assets allowed the company to decrease TCC from US$723/oz to US$694/oz, which is still one of the lowest in the industry.

“In a favourable gold market pricing environment, GV Gold maintained its commitment to a balanced financial policy. We decreased net debt to the level lower than 1.0x EBITDA, which allows the company to consider increasing the rate of production growth. An increase in capital investments is completely in line with our strategic objectives, including those related to organic growth.

“This approach allowed the company not only to distribute high dividends to shareholders, which for nine months of 2020 reached 38% of EBITDA, but also to adopt a new dividend policy at the beginning of 2021, having set 40% of EBITDA as the target level.

“The safety of workers and their families will remain our top priority in 2021. We will continue to take all measures required to minimise the risks associated with the pandemic and to ensure the uninterrupted operation of the company’s enterprises, and we will also continue to provide support to the regions where we operate.”

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