POG reported a 32% year-on-year drop in gold production (excluding third party concentrate) in the June quarter, which the company said was "primarily due to the switch to processing ore from the Elginskoye deposit at Albyn and preparations for the launch of the Pioneer flotation plant".
The quarterly figure of 75,800oz was 20% below estimates by Canaccord, which said it had assumed that production of non-refractory material at Pioneer would continue at similar levels during the early stages of the ramp up of the flotation plant, which began in May.
"This has not been the case, with non-refractory ore production being impacted by the need for mining of refractory material for stockpiling ahead of the flotation plant ramp up, plus a shutdown of the RIP plant during April," said Canaccord.
The investment firm noted while POG had not altered its 2021 guidance range of 370,000-390,000os of own gold production and 60,000-80,000oz from 3rd-party concentrate, "we flag that significant improvement will be required during 2H to reach the bottom end of guidance, with annualised own gold production in 1H running at ~316koz".
"After the assets had seemed to be ‘purring' along over much of the last year during the board-level disruption, it now appears that as two of the key assets go through transitionary periods, some shortfalls in expected output are beginning to appear," said Canaccord, adding that its focus remained on the outcome of POG's new management review, on which newsflow is expected later in the quarter.
Shares in POG rose 1.2% on Wednesday morning, capitalising the company at £853.69 million. POG shares have shed 33% in value so far this year.
