The gold mining company Polymetal will be engaged in exploration of copper deposits in Russia. The company intends to increase the work with the metal, the demand for which, according to analysts, can greatly grow in the transition to a more environmentally friendly economy.
The board of directors of Polymetal approved the proposal to increase the share of investments sent to the exploration of copper deposits and other non-ferrous metals, in addition to gold, said Vitaly Nesis General Director. "Personally, I am very bullishly evaluating long-term copper prospects," he said Financial Times, leading an example using metal in electric vehicles and equipment for renewable energy.
The price of copper has grown in February to the maximum level over the decade, exceeding the bidding on February 24 $ 9500 / t: Investors believe that government from the United States to China will stimulate the transition from fossil fuels to a cleaner energy. At the auction on Wednesday by 19.00 Moscow time, the price of three-month futures on the London Metal Exchange was $ 9170 / t (an increase of 1.4%).
Meanwhile, the price of gold sank this week to an eight month low: the growth of the profitability of governmentobaliations and signs of restoring the global economy undermined interest in the precious metallol. Its spot price decreased on Wednesday by 1.1% to $ 1718.5 per troy ounce.
According to Nesys, most analysts underestimate how much capital and time need to start developing a new copper mine. Polymetal has several joint ventures with copper companies in Russia and Kazakhstan, but it does not want to increase its presence in the sector due to the absorption. "A long-term bullish view of copper in our case makes no desire to buy assets, but rather readiness to invest in the development of copper deposits," said Nesis.
The ratio of capitalization towards EBITDA at Polymetal is 7, while the American copper company FreePort-McMoran - 14, according to Refinitiv.
As for gold miners, they should increase their attractiveness for investors who may prefer them to other mining companies, considers Nessis. Competing gold mining companies pay too low dividends, he believes: "Competition with non-ferrous metals for the attention of investors is very sharp. To be truly competitive, gold mining companies need to raise bets and compare their dividends not with their past payments that were meager, but rather with indicators similar to the size of companies engaged in other metals. "
Polymetal on Wednesday announced that paying dividends in the amount of complete free cash flow in 2020 in this way, the payment will be $ 0.89 per share, which is higher than analyst estimates.
The company also reported that net profit rose last year more than twice as $ 1.1 billion, thanks to the growth of revenue by 28% and reduce costs, which contributed to the decline in the ruble and oil prices.
Polymetal shares, which are included in the FTSE 100 stock index, increased by 0.8% in London (earlier, an increase in 2.9% during the day).
Translated Mikhail Overchenko