Russian gold miner Petropavlovsk said on Thursday that its third-quarter output rose 65 percent, beating most forecasts, and that it was confident of meeting its full-year target of 600,000 ounces.
The company, which operates three open-pit gold mines in Russia's far east, produced 228,110 oz in the three months to the end of September, 65 percent up on the same period in 2010 and 59 percent higher than in the second quarter of this year.
Shares in Petropavlovsk were up 3.4 percent following the announcement of the rise, compared with a 2.5 percent decline on the FTSE 350 Mining Index .
Oriel Securities analyst Charles Cooper said the production result had beaten his forecast of 201,000 oz and suggested the firm raise its guidance for the full year.
This now takes the pressure off the company to deliver its target 600,000 oz of gold in 2011; however, the question is now, should the company try to beat its own conservative forecast? We believe that they will do so, he said in a note.
The company's Chairman Peter Hambro responded that he did not want to risk a fourth-quarter setback and reiterated the existing forecast.
We've been criticised in the past for over-promising and under-delivering. The last thing we want is something to happen that is outside our control. We are entering a period of cold, bad weather, and there was an earthquake in the Far East this month, so I am not going to change the target, he told Reuters.
Hambro added that guidance for 2012 would be released in January and would include forecasts for the company's new Albyn mine, set to go into full operation towards the end of 2011.
The spot gold price has fallen from record highs during the last quarter to stand at around $1,620 an ounce, but Hambro repeated a bullish stance that the traditional safe haven for investors could reach $2,500 next year.
We don't see any return to stability in the world financial system, so people will continue to look towards real assets. The best proxy for real assets is gold, he said.
Total gold sold by Petropavlovsk during the first nine months of 2011 was 485,200 oz at an average realised gold sales price of $1,587/oz, 33 percent higher than the price achieved during the same period in 2010.
Petropavlovsk also said it had secured a new $200 million banking facility with Russian lender VTB .