The company said its 2013 production target was between 740,000 oz and 780,000 oz.
MOSCOW(BullionStreet): Russia's Petropavlovsk announced increase in 2013 gold production target.
The company said the it has decided to hike this year's gold production target after achieving a 13% rise in output in 2012 but hinted at reducing stake in IRC to 40% as other investors weigh in.
The company said full-year gold production rose about 13% to 710,400 oz, which was ahead of guidance. It said its 2013 production target was between 740,000 oz and 780,000 oz.
It said the average realised gold sales price rose by about 3% to $1,670/oz in 2012.
Petropavlovsk said it experienced strong operating cash flowing during the second half of 2012.
Early estimates indicated net operating cash flow rose about five times, against the first half, to about $230 million.
Petropvalovsk also announced a potential $238 million investment in its former subsidiary IRC by new shareholders to support production growth, which would reduce its stake to about 40%. The new shareholders would own about 36%, the company said.
IRC was previously a wholly-owned unit of Petropavlovsk, but was spun off in an initial public offering on the Hong Kong stock exchange in 2010.
"A pro-rata indemnity on the existing guarantee with the Industrial and Commercial Bank of China, reducing the Company's exposure under the guarantee, will be implemented on full completion of all stages of the investment, which is expected to be in Q3 2013," Petropavlovsk said in a statement.
Meantime, Petropavlovsk's net debt position, excluding IRC, was about $1.1 billion. The net debt position of IRC changed from about $68 million at June 30, 2012, to about $110 million at Dec. 31.
At Jan. 1, 2012, the group had about $153 million worth of committed, but undrawn, debt facilities.