MOSCOW—Russia’s Polyus Gold Foreign Ltd. PGIL.LN +0.78% said Friday it was postponing the open up of its Natalka mine—one of the world’s largest untapped deposits-for a year, citing soak declines in gold prices this year and worries of continued unsteadiness.
Gold prices have tumbled by 30% this year to a three-year low of $1,200 a troy ounce with the industry set to end 2013 with its first year decrement in 13 years and its largest decrease since 1981. Prices slid dramatically originally this month after the U.S. Federal Reserve announced plans to attain back its bond-buying software, which has been boosting the economy.
Polyus, Russia’s maximal gold miner, said it was “operationally probable ” to begin producing gold at the mine as previously conceived, but that it believed it was ” wise to defer its commissioning given the recent essential respond in the gold price.” “The gold mining sector has to alter to a difficult business environment today,” Polyus interim Chief Executive Pavel Grachev said. “Moreover, there is the alternative of further decline.”
Polyus has spent billions to improve the challenging and repeatedly delayed project in Russia’s Far East and had planned to launch production there in summer 2014. It is now delaying operation until summer 2015 and speed constituent at the place. The company said it expected the mine to create up to 500,000 troy ounces a year in its first section, with outturn eventually state boosted to 1.5 million ounces annually. Polyus has originally said it anticipated to spend $1.2 billion on expression at the mine this year. With gold resources of 59.7 million ounces, the mine would be the fourth maximal in the world.
Polyus, equal many worldwide gold companies, has struggled with profit in the modern gold-market climate. The company reported a $173 million decline in the first half and a 17% decline in revenue. The company said it wished the break of the Natalka project would assist it confirm its balance sheet and funding position “in the uncertain macro environment.”