* Petropavlovsk Q3 gold output rises 39 percent q-on-q
* On track to produce at least 700,000 ounces in 2012
* Shares up 3 pct, outperforms FTSE 350 Mining index
LONDON, Oct 16 Russia-focused gold miner
Petropavlovsk is on track to meet its full-year output
target while keeping its costs flat, the company said on
Tuesday, sending its shares up.
"It will be at least 700,000 troy ounces as previously
planned and announced but there is a potential for the company
to outperform if Pioneer and Pokrovskiy (mines) keep their good
performance in the fourth quarter," Peter Hambro, Chairman of
Petropavlovsk, told Reuters.
The company's third-quarter gold production reached 219,400
ounces, 39 percent higher than the previous quarter, while its
total cash costs for the full year were expected to remain in
line with the first-half level.
Last year, the miner produced 630,100 ounces of gold.
Petropavlovsk's London-listed shares rose 3.05 percent to
439.7 pence by 1209 GMT, compared with a 1.31 percent rise in
the FTSE 350 Mining index.
Petropavlovsk's growing debt pile and a larger-than-expected
charge after investments in new mines dragged its net profit
down 90 percent in the first half, sending its shares tumbling.
But the continuing strength of the gold price, and at least
meeting production and unit cost guidance, should mean an
improved balance sheet compared with expectations at the time of
the half-year results, Canaccord Genuity said in a note.
During the first nine months of 2010 Petropavlovsk's gold
sales and the average realised gold sales price were both up 4
percent year-on-year, to 505,600 ounces and to $1,658 per ounce
respectively, it added on Tuesday.
Hambro also said that he expected gold prices to rise by the
end of the year thanks to strong demand from central banks,
China and India, and because of weak South African production.
"At the moment we've seen some speculative shortselling, but
we will see it higher than it is at the moment. I would say at
$1,850 by ounce by the end of the year," Hambro added.
Gold prices firmed on Tuesday, recovering some lost ground
from a one-month low in the previous session. Spot gold
was up at $1,742.74 an ounce at 1209 GMT.