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Petropavlovsk hedges gold production

Publishing Date
18 Feb 2013 11:53am GMT
Mining Journal

Russian-focused Petropavlovsk plc will hedge nearly half of its gold production over the next 14 months guaranteeing the company a minimum revenue stream of US$664 million.

The London-listed company said it had entered into financing contracts to sell 399,000oz of gold until March 2014 at an average price of US$1,663/oz.

It said the sales represented about 46% of its gold production for the period and would provide approximately US$664 million in revenue.

The sale price is 3% above gold’s closing price on Friday of US$1,609/oz, according to Liberum Capital.

Petropavlovsk said the deal did not reflect the company’s price forecasts for gold.

However, it said the deal increased certainty of its cash flow as it develops the pressure oxidation processing facility at its Pokrovskiy mine, as well as further development of its mining and processing operations at Malomir and Albyn.

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