Petropavlovsk (LON:POG) one of the largest gold miners in Russia, assured it remains on track to deliver on its 2011 production target and cheered further by saying it is re-evaluating its long term production forecast following “recent positive exploration results”. The group confirmed it will deliver 600,000 ounces (oz) of gold over its current year, noting combined gold production from its Pokrovskiy, Pioneer and Malomir operations amounted to 83,500oz during April and May. Production for the first five months overall totalled 158,900oz, ahead of the group's forecast and 33% higher than the comparable period in 2010. Total production in the second half of 2011 is scheduled to be higher than for the first due, in part, to higher grades at the Pokrovskiy and Pioneer plants. Total gold sold for the first five months of 2011 was 197,700oz versus 120,600oz last time, an increase of 64%. The company said the strong gold price for the year to date, less the associated increase in royalty payments, more than makes up for industry-wide inflationary pressures and foreign exchange effects on operating costs. Petropavlovsk, created in 2009 through the merger of Peter Hambro Mining and Aricom, aims to provide a more detailed breakdown of its first half production in a trading, scheduled for release on 21 July 2011. A reappraisal of its production forecasts for the period 2012-2015 in the light of recent positive exploration work, meanwhile, will be issued with its first half numbers, due 25 August 2011. The company today also said its plans for a pressure oxidation (POX) plant at Pokrovskiy and the flotation plants at Malomir and Pioneer, collectively being called the ‘POX hub’, are continuing apace. Much is expected from the POX plant in particular. An internal feasibility study has already been completed and it is envisaged the plant will be developed in two stages - the first four vessels for processing concentrate from Malomir is planned for the first quarter of 2013 and additional two vessels for Pioneer concentrate will be commissioned in the third quarter of 2013. Peter Hambro, chairman of Petropavlovsk, said the creation of a pressure oxidation hub at Pokrovskiy will propel the group into “a new and exciting phase of development” and give Petropavlovsk a strong competitive advantage in this highly prospective field. Russia has a significant reserves and resources base, which primarily consists of deposits containing refractory ore, for which POX processing would be highly suited, the company believes. “We see our future Pokrovskiy hub, located in close proximity to excellent infrastructure, as the key to unlocking the value in a number of dormant, inexpensive assets requiring this technology,” said Hambro. He added: “I am confident that we have the expertise to deliver this project on schedule. Our research and development centres, led by first-class experts in this field, have been conducting extensive research into processing various types of refractory ore for the past five years.” In early morning trade Petropavlovsk shares were up 37p to 715p, valuing the company at £1.34bn.

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