OREANDA-NEWS. April 15, 2013. Polyus Gold International Limited (LSE - PGIL, OTC (US) - PLZLY, “PGIL”, “Polyus Gold” or the “Company”), the largest gold producer in Russia, releases its operating results for the first quarter of 2013.

Highlights
Gold production from continuing operations up by 6% year-on-year to 320 thousand ounces (first quarter of 2012: 302 thousand ounces)

Gold production including divested Kazakhstan assets totaled 337 thousand ounces (first quarter of 2012: 328 thousand ounces)

Significant increase in gold production at Titimukhta (+56%) and Verninskoye (+71%)

On track to meet 2013 production target of between 1.59 and 1.68 million ounces

Gold sales from continuing operations estimated to be USD 524 million1 (first quarter of 2012: USD 545 million) reflecting a 5% fall in the weighted-average gold selling price year-on-year

Estimated net cash position at period end of USD 699 million.

German Pikhoya, Chief Executive Officer of Polyus Gold, commented:
“Polyus Gold has delivered another strong set of results. In the first three months of 2013 we achieved higher gold production on flat processing volumes reflecting our focus on operational efficiency which has resulted in improved recovery rates. Our new generation of mines increased their contribution to the Company’s overall production as Titimukhta delivered outstanding production growth rates, the ramp up of Verninskoye continued and Blagodatnoye production was higher than planned.”

Health and safety update
Seven lost time incidents were reported in the first quarter of 2013. The LTI frequency rate was 0.17, in line with the first quarter of 2012 (0.17).

With regret, the Company has to report one work related fatality at its alluvial operations in the first quarter of 2013 as a result of a dozer overturning. The Company considers any fatality completely unacceptable and an action plan based on the root-cause analysis will be rolled out during the second quarter of 2013 to prevent any similar incidents occurring.

Polyus Gold has introduced a number of measures to improve employee health and safety awareness across its operations in recent months. As a priority, the Company is focusing on the prevention of serious potential incidents through the implementation of an incident root-cause analysis procedure and instilling field level risk assessment within its operations.

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1 Excluding USD 29 million of sales from divested Kazakhstan operations in January and February 2013.

Operating results
In the first quarter of 2013, the Company produced 320 thousand ounces of refined gold from continuing operations, compared to 302 thousand ounces a year ago. The growth in production was achieved as a result of significant increases in gold output at Titimukhta (+56%) and Verninskoye (+71%), as well as higher than planned production at Blagodatnoye (+3% year-on-year).

Polyus Gold moved 16.7 million cubic meters of rock in total during the first quarter of 2013, which is 4% more than in the same period in 2012. This was due to increased mining works at Verninskoe and Kuranakh, in line with the respective mine plans.

A total of 6.4 million tonnes of ore was mined in the first quarter of 2013, a decrease of 6% compared to the first quarter of 2012 (6.8 million tonnes). The decrease was mainly associated with lower volumes of ore mining at Olimpiada, in line with the mine plan.

The average stripping ratio for the Company in the first quarter of 2013 increased by 13% year-on-year due to a higher stripping ratio at Olimpiada. The increase was in line with the mine plan and resulted from the mining in the first quarter of 2012 an area of the pit with large additional ore volumes.

In the first quarter of 2013, the Company processed 5.3 million tonnes of ore, which is in line with the first quarter of 2012 (5.2 million tonnes).

Corporate update
On 28 February 2013, Polyus Gold completed the sale of its assets in Kazakhstan and Kyrgyzstan to a consortium consisting of Institute Project B.V., Financial Services B.V. and Folkstand Consortium Limited.

On 7 March 2013, Global Reporting Initiative confirmed that Polyus Gold’s Sustainability Report for 2012 fulfils the requirements of GRI Level A+.

On 18 March 2013, Polyus Gold International Limited was included into the FTSE Global Equity Index Series and the FTSE All World Equity Index Series.

During April 2013, Polyus Gold’s Board of Directors expects to decide on the dividend for the financial year 2012 taking into account the Company's dividend policy and will propose this to shareholders for their consideration at the Annual General Meeting.