This article is about PolyMetal (LSE: POLY), a Russian gold & silver producer. Top 10 gold producer, top 5 silver producer, trading at an incredible discount to just about anything one could imagine, after an 80% drop due to the war in Ukraine, which seems not to have effected the company much, surprisingly.
Unfortunately, my broker, the good free market broker that it is, won’t let me buy it, because they are concerned about me dealing with all the volatility.
Lynx, you messed up.
The Russian gold & silver miner recently provided an update on all the important issues that people have been raising, once again showing the competence and concern of the management team.
Is Polymetal still selling gold?
In short, yes. Almost uninterrupted.
- Sales of bullion and concentrate from Kazakhstan continue as usual.
- In Russia, sales of gold and silver concentrates continue normally to East Asia and Kazakhstan. Shipments have been temporarily impacted by the change of freight and logistics service providers, which is likely to result in higher costs.
- Sales of gold bullion in Russia have been restored to new counterparties on terms consistent with those received earlier. Domestic demand for gold is boosted by local retail investment.
Is the Central Bank’s decision to discount gold influencing the company’s sales?
In short, no. The recent Central Bank of Russia statement that the bank will buy gold from commercial banks at a fixed price of RUB 5,000/g (approx. US$ 1,800/oz at the time of the writing) is not expected to affect Group’s sales price materially as gold continues to be sold at global market price, both for exports and to satisfy physical retail demand.
Will Polymetal pay a dividend?
The company is yet to pay its already declared final dividend for 2021. Whether they will pay a dividend for Q1 2022, is unclear.
They say that the Board monitors the MOEX trade re-opening and the developments related to National Settlement Depositary – Euroclear operations which are critical to delivering dividends to Polymetal shareholders trading through MOEX (approx. 22% of issued share capital as of 1 March). The ability to distribute dividends to all shareholders in an equitable way will be one of the factors in finalising the dividend decision.
Will Polymetal get de-listed?
In my uneducated opinion, the chances for that are low, but not inexistent.
Currently, although out of the FTSE 100, the company remains listed on the LSE, although my broker still wouldn’t allow me to buy it.
Conclusion
The main concerns I’m having are related to the profitability of the company, which I expect to drop, due to rising costs, which I expect to worsen before getting better.
PolyMetal is not for the faint-hearted and it’s not a “YOLO” type of gold stock in my opinion. Sure, it could 5X from here to get back to it’s pre-invasion price, but a lot of other things could happen in the meawhile.
It’s important to think in terms of probabilities, rather than possibilities.
Not that it should matter to you what an inexperienced 20-something like myself is doing, but I’m definitely not selling at these prices, as I’m almost break-even, having bought right before the free market agent that my broker is, restricted my trading.
If I could, I would probably be buying on further dips.
I intend to keep up with the story and publish more updates on Polymetal (LSE: POLY) on this website.
