Polyus Gold (LSE – PGIL, OTC (US) – PLZLY) delays the launch of the Natalka plant until summer 2015, says an official statement.

      The delay is due to the ‘challenging market conditions’, i.e. a decline in gold prices that would make production less profitable if the company opened the plant as in mid-2014 as it was expected.

      In its press release, the largest Russian gold producer has attempted to skew the news in its favour. “Further to a deferral of the project’s residual capex, the re-sequencing will allow the Company to identify additional cost and operational efficiencies, including the optimisation of capital and operating expenditures, improvements to the project design and the potential implementation of the photo metric separation technology (optical sorting) as a way to pre-enrich the ore,” says the news update on its website.

      Polyus Gold expects to finalise a detailed plan of improvements to the project by the middle of 2014 following a thorough project assessment review scheduled for H1 2014.

      “Polyus Gold remains fully committed to bringing Natalka on stream. Once in operation, it will be Russia’s largest gold mine with its first stage producing an average of 500 thousand ounces of gold per year,” said Pavel Grachev, Interim CEO of Polyus Gold.

      As Russia-IC reported earlier, Polyus Gold’s production totaled 1.65 million ounces (or 51.3 tonnes) in 2013, up 5 percent on the year before.

      However, due to the falling prices, the company's earnings took a 12 percent dive to $2.3 billion due to a 17 percent decline in gold prices. Capex are expected to total $650-750 million in 2014.