Polymetal International PLC (LSE:POLY) shares ballooned as it told shareholders it continued to be unaffected by ongoing sanctions in Russia, even as pressure grows on corporations to withdraw operations in the region.
The precious metals miner said its operations in Russia and Kazakhstan continued undisrupted, with the latter generating 43% of the group’s adjusted earnings last year.
Shares were up 50% at one point on the update which appears to have reassured shareholders.
Polymetal indicated that bullion sales from Kazakhstan remained unaffected, as well as its Russian sales of silver and refractory gold headed to East Asia, where sanctions have not been implemented.
But the group did note that Russian bullion sales to the West had impacted on sales, as it reviews non-essential projects in a move to “preserve liquidity and minimise risk”.
“The scope and impact of any new potential sanctions (and any countersanctions) are yet unknown,” the group said.
“However, they might further affect key Russian financial institutions as well as mining companies.”
“Polymetal believes that targeted sanctions on the company remain unlikely, but are not impossible. Contingency planning has been initiated proactively to maintain business continuity.”
The group said the recent interest rate hike by the CBR to 20% was likely to weigh heavily on future borrowing, with more than a quarter of the company’s debt maturing in the next 12 months.
But the CBR’s decision to buy gold also meant more demand for Polymetal’s mining, the group said.
This week, six board members including Polymetal’s executive resigned in a reported plan to transform its Rusal business into an international brand.
In a separate statement the group provided clarity on its shareholder status, pointing out no individuals with links to the Russian state held significant holdings in the company.
Shares in Polymental rose 49% to 141.75 in opening deals this morning.