OREANDA-NEWS. Polymetal International plc is pleased to announce the Group's production results for the first quarter ended March 31, 2015.

Polymetal produced 299 Koz of gold equivalent in the first quarter of 2015, down 5% year-on-year, mainly due to planned grade declines at Dukat and Omolon as well as a temporary suspension of the float circuit at Varvara. Quarterly gold production was 186 Koz, down 3% year-on-year. Silver production in Q1 was 6.8 Moz, down 7% year-on-year.

Sales lagged production by 39 Koz of gold equivalent as a result of usual expected seasonal factors, including New Year stoppages at refineries and annual contract re-negotiation with silver concentrate off-takers. This lag is expected to be fully reversed by the year-end.

Kyzyl project development is on track with both design and permitting activities on schedule with the feasibility study release expected in October 2015.

Net debt (including dividend payable of USD 55 million) remained broadly flat at US\\$ 1,258 million at 31 March 2015 as compared to 31 December 2014, as the Company continues to generate significant free cash flows despite the first quarter traditionally being the weakest one in this respect.

Polymetal deeply regrets to report two fatalities at our mines from 1 January 2015 to the date of this report. The Company is continuing the comprehensive safety review of these and prior cases. As part of its immediate response, Polymetal has meaningfully increased weighting for safety KPIs for senior management remuneration, including the Group CEO, and managing directors of its operations.

The Company reconfirms its production guidance of 1.35 Moz of gold equivalent in 2015, along with its total cash cost guidance of USD 575 - 625/GE oz and all-in sustaining cash costs of US\\$ 750-800/GE oz. The cost guidance is contingent on the Rouble/Dollar exchange rate dynamics which has a significant effect on the Group's Rouble-denominated operating costs. The Russian Rouble continued to display high volatility against the US Dollar in the first quarter 2015.

"We are on track to deliver on our production and cost targets for the current year", said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. "I regret to report that there were two fatal accidents at our facilities during the first quarter. I would personally like to extend my heart-felt condolences to the families and friends of the two men who lost their lives in these tragic accidents."