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Kazakh miner Solidcore reports profit increase on high gold prices

Kazakh miner Solidcore reports profit increase on high gold prices

Kazakh gold miner Solidcore said Monday that high gold prices and growth in sales have almost doubled their net profit by 2024. However, they warned of the impact sanctions on concentrate delivery to Russia will have on first-quarter revenues.

Solidcore (formerly Polymetal International) is the second largest gold miner in Kazakhstan. It expects to produce 487,000 gold equivalent ounces by 2025. In 2024, the company sold off its Russian assets after U.S. sanctions were imposed on its business in Russia in response to Moscow’s military actions in Ukraine.

About 70% of the group's output and 50% of its core earnings came from the Russian business.

Solidcore reported that, in the results for the fiscal year ending December 31 2024, Solidcore's net profit increased 96% on an annual basis to $533 millions, after excluding its Russian business, which is now classified as a discontinued operations. Solidcore reported a 49% increase in revenue to $1.3 billion.

The revenue for this year is already under pressure.

Solidcore stated that delays in concentrate deliveries to Amursk POX in Russia due to operational issues arising from the impact of the international sanctions on Russia are expected to have a negative impact on revenue in the first quarter.

Gold prices soared to record levels on Monday, surpassing $3,100 an ounce, amid fears of inflation caused by U.S. Tariffs. The safe-haven investment is set to have its best quarter since 1986.

The gold price has risen by around 18% this year. This is a continuation of its 27% increase last year which was the best performance for over a decade.

In a press release, Vitaly Nesis, CEO of the company said that "in 2024 our stable performance and favorable gold prices will drive robust financial results."

Solidcore plans to double its production by 2029 to 1 million ounces equivalent gold, using mergers and acquisitions across Central Asia and the Middle East.

The company has therefore suspended dividend payments until further notice. Capital expenditures in 2024 will rise by 44%, to $208 millions, which is below the forecast. Capital expenditures are expected to reach $300 million this year. (Reporting Anastasia Lyrchikova, Writing by Alexander Marrow Editing Andrew Osborn.)

(source: Reuters)