UPDATE 1-Petropavlovsk reviews strategy after gold price drop

Tue Apr 23, 2013 3:28am EDT

* Petropavlovsk's net debt stood at $1.2 bln at the end of March

* Says Q1 gold output rose 13 percent y-on-y

* On track to produce 760,000-780,000 oz of gold in 2013

MOSCOW, April 23 (Reuters) - Russia-focused gold miner Petropavlovsk Said on Tuesday it is reviewing its capital spending strategy after a sharp fall in the price of gold.

The company decided to review its strategy after the price of gold, caught in a tug-of-war between physical buyers seeking bargains and wary investors cutting exposure to it, fell about 15 percent since the start of this year.

Petropavlovsk said the review will not affect its production.

"The focus for 2013-14 has been to complete our major capital spending programmes and then commence the process of driving down the debt incurred to pay for those projects," Peter Hambro, chairman of Petropavlovsk, said in a statement. Gold was seen at $1,412 per ounce by 0647 GMT.

The company, whose net debt stood at $1.2 billion at the end of March, has prepared for the current volatility in the gold price via forward sales contracts. Almost half of its production over a period of 14 months ending March 2014 is hedged at $1,663 per ounce.

Its gold production in the first quarter of 2013 rose 13 percent over the same period a year ago to 136,800 ounces. The firm said also it was on track to produce its target of 760,000-780,000 ounces of gold this year.

FILED UNDER: