UPDATE 2-Polymetal sets special dividend after upbeat outlook

Wed Jan 30, 2013 11:18am EST

Related Topics

* Gold-equivalent output up 31 percent in 2012

* On track for 1.2 mln ounces in 2013

* Sees 2013 capex $300 million, eyes special dividend

* No comment on Polyus merger speculation

MOSCOW, Jan 30 (Reuters) - Russian precious metals miner Polymetal said on Wednesday it may pay another special dividend this year after announcing a 31 percent increase in 2012 production and giving upbeat output guidance.

London-listed Polymetal International Plc said it was on track to produce 1.2 million troy ounces of gold equivalent in 2013, although there was a "moderate risk" of a 5 percent shortfall due to delays at a Russian facility.

Chief Executive Vitaly Nesis flagged the possible special dividend in the wake of Polymetal's first such special payout this month, of 50 U.S. cents per share at a cost to the company of $191 million.

"I'm a shareholder of the company myself and I enjoy dividend payments, so I definitely expect a special dividend to be declared at the end of this year," Nesis told a conference call with analysts. "Maybe not next year, but this year - yes."

Polymetal, controlled by Russian businessmen Alexander Nesis - brother to Vitaly - and Alexander Mamut and Czech investment group PPF, has become the focus of takeover talk linked to a proposed ownership shake-up at its larger Russian rival Polyus .

Two Russian billionaires have been shortlisted to buy Mikhail Prokhorov's 38 percent stake in Polyus Gold International Plc, worth $4 billion, and the proposed deal is being reviewed by the UK Takeover Panel, sources say.

If approved, a deal could put Russian tycoon Suleiman Kerimov, who owns 40 percent of Polyus, in a position to launch a merger that would create Russian gold mining national champion.

Vitaly Nesis declined to comment on a possible takeover.

Polymetal, which joined the FTSE 100 index in 2011, said its total gold-equivalent production reached 1.06 million ounces last year, beating its original guidance by 6 percent.

Gold production was up 33 percent year-on-year at 589,000 ounces, while silver production rose 33 percent to 26.5 million ounces. Gold equivalent is a measure of gold and other metals expressed in units of gold.

The company expected to commit $300 million in capital expenditure in 2013, inclusive of exploration.

Shares in the company were down 2.4 percent in late London trade, underperforming a 0.3 percent fall in the FTSE 100 index .

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