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Solidcore Resources plc (“Solidcore” or the “Company”) announces strong preliminary financial results for the year ended 31 December 2024. “In 2024, our stable operational performance and favourable gold prices drove robust financial results. We met our production and cost guidance as well as launched our ambitious long-term investment program. 2025 should see continued ramp-up in our investments, particularly with the start of the active construction of Ertis POX and Green Power Project at Varvara”, said Vitaly Nesis, CEO of Solidcore Resources plc, commenting on the results. FINANCIAL HIGHLIGHTS The discussion below covers the results of continuing operations, excluding those from the discontinued Russian segment of our business, which was sold in March 2024 and is categorised as a discontinued operation in the accompanying financial statements. The comparatives are restated in the same way. As required by IFRS 5, cash flows include amounts of discontinued operations unless otherwise stated.
DEBT AND DIVIDEND
2025 OUTLOOK
OPERATING HIGHLIGHTS[13]
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) HIGHLIGHTS
Conference call and webcast The Company will hold a webcast on Tuesday, 1 April 2025, at 14:00 Astana time (10:00 London time). To participate in the webcast, please register using the following link: https://edge.media-server.com/mmc/p/agiu6x54 Webcast details will be sent to you via email after registration. About Solidcore Solidcore Resources is a leading gold producer registered in AIFC, Kazakhstan, and listed on Astana International Exchange. Solidcore operates two producing gold mines and a major growth project (Ertis POX) in Kazakhstan. Enquiries
FORWARD-LOOKING STATEMENTS
This release may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “should” or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
TABLE OF CONTENTSPrincipal risks and uncertainties Directors’ responsibility statement Alternative performance measures
CHAIR’S STATEMENT2024 marked the first year of my tenure as both a Board member and as the Chair. It was a challenging yet rewarding time to join, as the Board navigated a range of external issues, undertook major corporate restructuring and worked diligently to redefine the Company’s strategy and internal processes. The last 12 months have given me the opportunity to engage fully with the Board of Directors, whose opinions and contributions significantly influenced key discussions and decisions. As a representative of the largest shareholder, Maaden International Investment, and with their support, I am honoured to be a member and Chair of your Board and, using my professional expertise, particularly in Central Asia, to lead the Company toward its ambitious targets and restore shareholder value. New scope, new vision 2024 saw the beginning of a new chapter in the Company’s history with the completion of the divestment of the Russian business and subsequent cancellation of our listing on the Moscow Exchange. Crucially, this mitigated the risk of sanctions and paved the way for future independent development. We have adopted a new growth strategy, in which we set out our ambitions to double in size by expanding our operations in Central Asia and exploring possible options in the Middle East. Along with a new corporate structure and a new strategy, we also took the decision to adopt a new name for the Company – Solidcore Resources – in order to clearly differentiate us from the previous entity. Kazakhstan Kazakhstan remains our primary jurisdiction for exploration and M&A activities. We have operated our business successfully and responsibly in the country since 2009. We were among the first listings on Astana International Exchange (“AIX”), shortly after it was established in 2019, and we have managed to build a strong reputation and political capital. The country presents great opportunities in gold and base metals exploration backed by favourable regulatory framework. We are grateful for the ongoing cooperation and support from the Astana International Financial Centre (“AIFC”) and Kazakhstan’s authorities. We have already introduced a winning combination of high-quality assets and technological expertise to Kazakhstan and are committed to further investment in new operations and exploration. Alongside this, we will continue to be a responsible corporate citizen supporting local communities and contributing to the country’s climate goals. In December 2024, the Board approved the Ertis POX project. Located in the Pavlodar region, this will be the first POX plant and the largest high-tech refractory gold processing hub in Central Asia. Ertis POX will not only secure 100% of in-house processing for 80% of our reserve base but also create capacity for other underutilised deposits in the country. The plant is expected to generate 500 direct new jobs for the region. From an environmental perspective, POX is recognised as the cleanest available refractory gold processing technology. Board composition During 2024, I was the sole addition to an established Board, composed of members with a well-rounded blend of skills and professional backgrounds in finance, law and corporate development. However, as we began to implement our growth strategy, it was clear that we needed to increase the depth of mining experience that we have. As such, we had been actively considering independent candidates for the Board with extensive expertise in mining and exploration, and in late January 2025, we appointed Abdulmonem Al-Murshidi as an Independent Non-Executive Director. His many years at senior roles within the mining industry combined with deep local knowledge of the Middle East, strengthens the Board’s contribution to the Company’s ambitious growth strategy. Shareholder returns We view the divestment of our Russian assets and the adoption of our new strategy as value-accretive moves. However, for the most part, that was not reflected in the share price during 2024. We believe the main reasons for this were twofold: firstly, the lack of international infrastructure in our home market to enable purchases by international investors and, secondly, an overhang of legacy investors from our listings on London and Moscow stock exchanges with a pure sell interest. While the latter should taper off over time, we are actively working towards a resolution of the former and hope that AIFC will continue to support our efforts. For our own part, we acknowledge that we also need to achieve sufficient progress in the implementation of our strategy to restore shareholder value. The company continues to consider the possibility of an additional stock listing on a major exchange, but does not expect it to occur in the near future, as it must first address remaining legacy sanctions challenges related to the tolling arrangement and achieve its growth targets. We continue to regard dividend payments as the most effective instrument of returning value to shareholders and essential in underpinning our investment case. However, given the substantial investment needed to fund our growth strategy, including over US$1 billion of committed development capital expenditure over the next five years – the Board decided to suspend the dividend policy and regular dividends until the Ertis POX construction has been completed. It also should be noted that about 7% of our share capital excluding treasury shares remains blocked under Euroclear after re-domiciliation in 2023. While we successfully unblocked a significant portion of shares through share exchanges in 2023-2024, dividends on the remaining blocked shares will be frozen on Euroclear accounts if they are paid. We are actively working to resolve this issue. The dividend payout may be reassessed based on our success in this regard and the availability of liquidity needed to support our growth plans. Focused on sustainability and governance excellence As the Chair of the Board, I would like to assure all our stakeholders that we are committed to maintaining the outstanding sustainability, social and corporate governance practices and standards, developed and adopted by the Company over many years. We continue to act responsibly, minimise our environmental footprint and support the communities where we operate as well as our employees and local authorities. We promote a safety-positive culture: there have been no accidents at our assets in Kazakhstan since 2021 and zero fatalities since 2017. Maintaining this level of performance is the core goal for our business. As part of our commitment to mitigating climate change, we have updated our climate goals and aim to decrease our absolute GHG emissions by 45% and source 30% of electricity from renewable energy sources by 2030 and achieve net-zero by 2050. Vote of thanks Over the last three years, we have navigated steadfastly through some difficult times and successfully overcome numerous obstacles. None of this would have been possible without the dedication of our employees, management, Board and shareholders, as well as the support of Kazakhstan’s authorities and all our other stakeholders. I would like to express my sincere gratitude to everyone for their hard work and commitment in the face of such complex circumstances and congratulate them on a job well done. I am confident that we are in a position to achieve the ambitious goals we have set ourselves for the future.
Chair Omar Bahram
CEO STATEMENTWe began 2024 with a major milestone – the divestment of our Russian business. This predetermined the sequence of other developments throughout the year, all aimed at cementing our ambitions to become a significant diversified industry player. The end of the year was marked with outstanding operating and financial results. Corporate restructuring The sale of the Russian assets in March 2024 was a pivotal transaction, crucial for the business continuity and value creation in the long run. With its completion, we are confident in the stability of our operations and our ability to develop and expand the business. Following the completion of the transaction, we concentrated our essential management functions in a new corporate HQ in Astana and established robust engineering, project management, construction, IT, accounting and procurement functions, growing our HQ workforce from 100 to nearly 200 employees, while total average headcount reached 3,600 people. We are rebuilding our partnerships with contractors and have successfully secured contracts with key equipment suppliers and service providers. With a new corporate structure and strategy in place, we have redefined our identity to better reflect our evolving business and values. This is captured in our new name, Solidcore Resources, and supporting branding, which encapsulates the scope of our ambitions, commitment to growth and mining expertise. Ambitious goals Our focus on recovering shareholder value, bolstered by our extensive experience and solid financial position, will drive our new strategic targets of 1 Moz of GE in production and 25 Moz of GE in ore reserves by 2030, both representing a twofold increase from current levels. In order to achieve these goals, we will pursue new acquisitions, extensive exploration and processing of third-party material at Ertis POX. We will concentrate our activities primarily in Kazakhstan, while additionally considering emerging opportunities in other Central Asian countries and in the Middle East. In the light of the envisaged significant increase in size and few potential value-accretive targets within the gold mining sector, we believe it is sensible to also expand into green transition metals, including copper and tin. This is apposite given that our chosen jurisdictions have proven to have substantial resources of such commodities. During 2024, we made first steps within our M&A pipeline. We acquired a 55% stake in Syrymbet, a large tin deposit in North Kazakhstan, for US$ 82 million; Lancaster Group remains a partner with a 45% stake. We will leverage our project execution expertise and our partner’s support to refine the processing approach with the aim of coming to a construction decision in 2025. In March 2025, we entered into a binding agreement to acquire 100% interest in the Tokhtar gold property in the Kostanay region of Kazakhstan, which unlocks substantial synergies given its proximity to Varvara hub and will serve as an additional feed source for Ertis POX. Exploration is another cornerstone of our strategy, driving growth and securing our long-term pipeline. In 2024, we invested strategically in gold and copper exploration projects both greenfield and brownfield, bringing our experience and knowhow to robust partnerships that enhance our overall capabilities. This reflects our intent to build value and deliver results, and we are committed to keeping our stakeholders informed of our progress. Ertis POX With Board approval received in December 2024, we will begin the full-scale construction of Ertis POX in 2025. First regulatory approvals for temporary buildings have been obtained, basic engineering will be completed later this year and the autoclave is currently in the winter port, awaiting delivering to the construction site at the start of the navigation season. Crucially, we have procured and relocated a highly experienced construction team. We will prioritise the timely execution of the project and plan to complete construction in H2 2028. The plant ramp-up will allow us to de-risk the Company’s operations by eliminating our reliance on third-party offtake and tolling arrangements for Kyzyl concentrates. Once operational, approximately 40% of the capacity will be available commercially and we will be approaching potential feed suppliers as the construction progresses to a more advanced stage.
Financing growth In 2024, we allocated US$ 208 million to capital expenditure, with an emphasis on enhancing production efficiency and laying the groundwork for the active investment phase, set to begin in 2025. Over the next five years, our existing project pipeline requires investment of more than US$ 1 billion. We ended the year with net cash of US$ 374 million, and at current gold prices our operations generate sustainable operating cash flow to finance both our sustaining and growth capital expenditure. However, to enable both growth and financial flexibility, we are targeting new financing options in 2025, including bond-market opportunities. Solid assets, solid performance We prioritise onsite safety and foster a zero-harm culture. Our record stands as a testimony to this with zero injury frequency rate for continuing operations, the last recorded in Kazakhstan in 2021. Our two operating assets, Kyzyl and Varvara, are set to generate stable production and robust returns throughout their mine life and market cycle. In 2024, we successfully met our production guidance achieving 490 Koz GE output. We are pleased to report record revenue and adjusted EBITDA for our ongoing operations. Revenue was up 49% year-on-year to US$ 1,328 million, while adjusted EBITDA saw an impressive 62% increase to reach US$ 712 million on the back of positive metal prices dynamics, higher sales driven by release of inventories, and the Kazakhstani tenge devaluation. Total cash costs were 8% higher year-on-year at US$ 971/GE oz, and all-in sustaining costs 3% higher at US$ 1,298/GE oz, although they were in line with our guidance ranges of US$ 900-1,000/GE oz and US$ 1,250-1,350/GE oz, respectively. The increase was attributable to significant cost inflation in Kazakhstan, which offset the positive impact of the devaluation of the Kazakhstani tenge on local-currency costs. Thanks to the strong profit and working capital release, we generated US$ 435 million free cash flow and, after the investments discussed above, net cash was US$ 374 million as at the year-end. 2025 milestones This coming year will be important in terms of gauging the progress in implementing our strategy. We will complete some fundamental stages at Ertis POX, advance the feasibility study preparation for Syrymbet, and concentrate on building our growth pipeline through exploration and M&A. With regard to our existing operations, production is expected to be marginally down at 470 Koz of GE, TCC and AISC will be within US$ 1,000-1,100/GE oz and US$ 1,350-1,450/GE oz, respectively, while capital expenditure will increase to nearly US$ 300 million as we start to incur full-scale construction costs at Ertis POX. At Kyzyl, a proposal for the construction of a solar power plant will be submitted to the Board for approval with the aim of providing a stable energy supply and reduce costs. We will also progress with preparation for the underground mining with first ore expected to be delivered in 2030. We have laid the foundation towards becoming a diversified larger-scale mining company and technological leader in the mining industry in Central Asia. I am confident in our ability to reach our goals, because we have the key capital for our success – our employees. They have proved themselves to be resilient and highly professional in challenging times and have the motivation to fully embrace our new endeavours. On behalf of the whole senior management, I would like to thank everyone – and to wish us all a successful future.
Chief Executive Officer Vitaly Nesis
OPERATING REVIEWROBUST PRODUCTION In 2024, Solidcore's gold equivalent production amounted to 490 Koz, representing an increase of 1% y-o-y (2023: 486 Koz), 3% above the original production guidance of 475 Koz. GE sales of 537 Koz (excluding trading operations) increased by 17% y-o-y and outpaced production level as the Company managed to unwind significant volumes of Kyzyl concentrate stockpiles accumulated before 2024 due to logistical challenges. Full-year GE payable production at both Kyzyl and Varvara remained largely unchanged at 320 Koz and 170 Koz respectively. In 2024, the Company achieved significant milestones in advancing the Ertis POX project, in line with its long-term strategic plan. These included the formal project approval by the Board of Directors, assembly and delivery of the autoclave to the transhipment port for winter storage, commencement of procurement activities for processing equipment and long-lead items and obtaining positive expert reviews on the detailed design for the construction of temporary buildings and structures. Bore pile tests for the POX building were successfully completed, paving the way for the start of installation of building piles for the autoclave foundation. Engineering survey work was progressing according to schedule. The project remains on track with the delivery of the autoclave and the commencement of full-scale construction proceeding as planned. RESERVES AND RESOURCES In 2024, Solidcore’s Ore Reserves increased by 4% y-o-y to 12.1 Moz of GE, mostly on the back of positive revaluation results for underground mining at Kyzyl, revaluation at Elevator, as well as the initial evaluation at Baksy (both Varvara hub), fully offsetting mining depletion. The average grade in Ore Reserves stood at 3.2 g/t of GE, remaining at the last-year level. The share of Ore Reserves for open-pit mining in Kazakhstan decreased further by 4 p.p compared with the previous year and stood at 43% on the back of underground reserves extension at Kyzyl. The Company’s Mineral Resources (additional to Ore Reserves) decreased by 14% y-o-y to 3.5 Moz of GE, predominantly due to conversion into Ore Reserves. The average GE grade in Mineral Resources increased by 5% y-o-y to 3.0 g/t. In 2024, the Company completed validation of the historical exploration results at Syrymbet, estimating Mineral Resources of 206 Kt of tin and 74 Kt of copper attributable to 55% share of the Company in the project. In 2024, exploration activities were carried out at 20 licensed and contract areas. In total, 44.4 km of drilling was completed. A 25% y-o-y decrease was driven by the completion of the exploration program at Baksy. Ore Reserves reconciliation, GE Moz[16]
Ore Reserves and Mineral Resources summary[17]
Ore Reserves and Mineral Resources as at 1 January 20251
Syrymbet Mineral Resources at 1 January 2025[18]
HEALTH AND SAFETY There were no fatal accidents, injuries and lost-time incidents in 2024 at Solidcore’s assets. However, near-misses were recorded, emphasising the need for ongoing efforts to ensure safety. Solidcore still took responsive measures by updating risk maps for relevant facilities, providing additional instructions to employees and encouraging contractors to carry out an investigation if the accident involved a contractor’s worker.
EMPLOYEES In 2024, our average headcount increased by 12% to 3,577 employees (2023: 3,202), with approximately 40% working on a fly-in/fly-out basis. This growth was driven by the implementation of our development strategy in Kazakhstan, the advancement of Ertis POX and Syrymbet investment projects, and the expansion of our engineering team and other administrative staff in Astana. Due to structural changes within the Company, the voluntary turnover rate slightly increased to 2% in 2024 (2023: 1.4%). We continue to face increased competition in the labour market and a growing demand for mining professionals. To attract and retain talent, we offer competitive salaries and a range of professional development opportunities, including succession planning and our Talent Pool programme. In 2024, the Talent Pool included 185 employees, with 10% receiving promotions. Additionally, more than 17% of total hiring positions in 2024 were filled by internal candidates from the Talent Pool. The proportion of women in our workforce increased to 21% in 2024 (2023: 20%). We continue to promote a culture of equal opportunity through training and communication initiatives aimed at eliminating workplace bias, empowering diverse teams, and attracting and retaining talent from different backgrounds. These efforts contributed to a 3% increase in women in leadership positions, reaching 24% in 2024. In addition to addressing gender diversity, we are committed to eliminating discrimination based on age or disability. As part of this effort, we continue to implement our interactive online course on inclusion practices, which provides insights into disability inclusion, highlights workplace bias risks, and promotes best practices for fostering an inclusive work environment. This course has also been incorporated into our employee induction programme.
CLIMATE AND ENERGY We remain committed to reducing our climate footprint and reaffirm our intention to achieve carbon neutrality by 2050. Our strategy prioritises projects that significantly reduce greenhouse gas (GHG) emissions while also minimising the net adverse impact on water resources and biodiversity. In 2024, we updated and refined our medium- and long-term climate strategy, setting more ambitious climate goals, including a 45% reduction in Scope 1 and 2 emissions by 2030 (2023 as the baseline) and carbon neutrality by 2050. These updates ensure continuity with our previous commitments while aligning with our current asset portfolio and the objectives of our new development projects. Our direct and indirect energy-related emissions (Scope 1 and Scope 2) increased by 6% in 2024 y-o-y, primarily due to changing mining conditions, longer transportation routes and limitations on direct procurement of clean electricity from grid suppliers. To address this challenge, we are developing our own energy clusters, comprising solar and gas power plants with a total capacity of up to 80 MW at Varvara and Kyzyl. This initiative is the cornerstone of our Climate Plan, providing a foundation for our decarbonisation pathway and ensuring energy independence from external power grids. We continue to advance our voluntary afforestation project in Kazakhstan. In 2024, we successfully afforested a 28-hectare pilot plot near the Varvara site in the Kostanay region and achieved official registration in the National Register of Carbon Projects of Kazakhstan. By 2030, we plan to afforest 1,500 hectares of non-forested land from the land reserve, expanding our efforts across all our operational regions in Kazakhstan.
ENVIRONMENT Our Environmental Management System (EMS) is the cornerstone of our approach. All our production sites are certified to the ISO 14001 global standard. Our EMS is supported by specific systems for cyanide and tailings management, as well as internal and external auditing. The monitoring of both water quantity and quality is a key focus within our EMS. Given the predicted physical impacts of climate change on our operations, vigilance in monitoring water risks is crucial for our assets. We strive to continually enhance our water efficiency by employing metering and auditing practices for water consumption, coupled with the meticulous management of the quality of wastewater. The majority of the water we use in ore processing is circulated in closed water cycles. Overall, 96% of our on-site water consumption is via a closed cycle of treated waste water (2023: 90%). We also remain committed to our goal of maintaining fresh water usage for processing per unit of production at a minimum achievable level. In 2024, we decreased our fresh water intensity for ore processing by 72%, compared with 2023, to 50 m3/1,000 t (2023: 178 m3/1,000 t).
Communities We aim to maintain open dialogue with neighbouring communities, ensuring transparent feedback mechanisms in all regions where we operate. In 2024, we responded to all of the 271 enquiries received from locals and held 24 stakeholder engagement events. The outcomes of such engagement inform our social investment programmes. Solidcore’s social investments amounted to US$ 9.8 million in 2024 and were targeted to projects in education, local infrastructure, sports and culture (2023: US$ 7.3 million).
OUTLOOK FOR 2025 In 2025, we anticipate a significant progress with the first major construction phase at Ertis POX, continued exploration activities, and further strengthening of our growth pipeline. Full-year production is expected at 470 Koz of GE, with a 4% y-o-y decrease driven by the planned grade and recovery declines at both Kyzyl and Varvara operations. Safety remains a top priority for Solidcore, with a firm commitment to maintaining zero fatalities across operations and among on-site contractors. The Company is dedicated to implementing initiatives that enhance health and safety conditions. At Kyzyl, the Company is preparing for underground mining. In Q1, delays of concentrate processing at Amursk POX and respective revenue deferral have been recorded, due to sanctions-related operational issues at the Russian plant. At Varvara, we will continue preliminary works at two near-mine projects as well as advance our renewable and low-carbon energy initiatives by moving forward the construction of a 23 MW solar power plant and a 40 MW gas-piston power plant. Additionally, the Board will review a proposal for a 17 MW solar power plant construction at Kyzyl. The power stations will enhance energy security, lower costs, and reduce GHG emissions. As part of our broader sustainability strategy, we remain focused on minimising our reliance on diesel fuel to further reduce our environmental footprint. At Ertis POX, the Company plans to commence full-scale construction, complete basic engineering, deliver and install the autoclave on its foundations, complete temporary buildings and structures, finalise the Environmental and Social Impact Assessment (ESIA) and contracting of the main processing equipment. Solidcore continues to expect to meet the major milestones as planned with the end of commissioning and first production in H2 2028. At Syrymbet, the Company is planning to advance the feasibility study for the tin deposit and submit the project for the Board approval by the end of 2025.
FINANCIAL REVIEWmarket summary Gold price and demand momentum Entering 2024, a higher than anticipated inflation rate, tight labour markets in the US, and a deteriorating geopolitical environment, including uncertainty surrounding the US election, eroded optimistic rate-cut expectations. As a result, gold price hit the lowest 2024 point in February at US$ 1,991/oz. However, gold gained momentum in Q2 2024 and maintained a strong performance through the end of the year with three rate cuts in the US fuelling a gold price rally to US$ 2,784/oz in October. The average LBMA gold price for 2024 was US$ 2,389/oz, reflecting a 23% increase y-o-y. Gold demand remained robust in 2024, continuing the strong performance of the previous year. It rose by 1% to 4,554 tonnes (2023: 4,492 tonnes), driven by global economic uncertainty and heightened geopolitical tensions. The trend of gold accumulation seen in recent years persisted, amounting to 1,045 tonnes (2023: 1,051), with central banks continuing allocations of this safe-haven asset at a strong pace, highlighting the risk of a potential economic downturn. The National Bank of Poland was the largest purchaser of the year, expanding its reserves by 90 tonnes, while the National Bank of Kazakhstan and the Central Bank of the Philippines were among the top net sellers, offloading gold to support their local currencies. 2024 marked the fourth consecutive year of outflows from gold-backed Exchange-Traded Funds (ETFs). However, a net outflow of just 7 tonnes (2023: 244 tonnes) signalled a reversal of this negative trend for the first time since 2022, with ETFs attracting an inflow of 113 tonnes in H2 2024. Demand for gold bars and investment coins remained steady at 1,186 tonnes (2023: 1,190 tonnes), demonstrating resilience and exceeding the 10-year average of 1,073 tonnes. Overall, global gold investment volume increased by 25% y-o-y, reaching a four-year high of 1,180 tonnes. Gold demand in the technology sector experienced a 7% increase to 326 tonnes (2023: 305 tonnes), supported by the rapid expansion of AI-related infrastructure and strong consumer electronics shipments in emerging markets, which fully offset the declining demand in dentistry. The strong upward fluctuation in gold prices impacted jewellery affordability, leading to a 9% y-o-y decline in fabrication to 2,004 tonnes (2023: 2,191 tonnes). Confidence among jewellery consumers in China and India, traditionally the largest markets, was weakened by a slowdown in income growth. Total jewellery demand in both countries amounted to 1,075 tonnes, 15% below the 10-year average. The total gold supply in 2024 remained largely stable at 4,974 tonnes, marking a marginal 1% increase and setting a new all-time high (2023: 4,946 tonnes). Global mine production surpassed the previous peak from 2018, driven primarily by increased output in Canada, Mexico, and Peru. This growth fully offset declines in the US, Australia, and Bolivia, where lower ore grades impacted production. Kazakhstan remained a key contributor, accounting for 2.5% of global gold output with approximately 90 tonnes (2023: 86 tonnes), 33% above its 10-year average. Notably, the higher metal price led to an 11% rise in recycled gold supply, reaching 1,370 tonnes (2023: 1,234 tonnes), with the largest y-o-y increase in recycling volumes recorded in East Asia and Europe. Foreign exchange The Company’s revenues are denominated in the US dollars, while most the Company’s operating costs are denominated in local currency, the Kazakhstani tenge (KZT). As a result, changes in exchange rates had an impact on financial results and performance. KZT remained relatively strong in the H1 2024, in the range between 439 and 467 KZT/US$. However, it experienced a sharp depreciation towards the end of the year, hitting an all-time low of 525 KZT/US$ in December. The downward momentum was driven by negative trade dynamics with the CIS partners, the strengthening of the US dollar index, and continued pressure from weaker oil prices. The average annual exchange rate was 469 KZT/US$ (2023: 456 KZT/US$). Inflation Throughout 2024, inflation in Kazakhstan was slightly below the previous year, averaging at 8.9% (2023: 9.5%). The National Bank of Kazakhstan maintained tight monetary policy, conducting several reviews throughout the year. The base rate fluctuated within a range of 14.25% to 15.25%, with the final rate set at 15.25% in December, aimed at managing inflationary pressures and ensuring economic stability. Revenue
In 2024, revenue increased by 49% to US$ 1,328 million driven by growth of gold average realised prices and sales. The latter was attributable to the release of significant volumes of Kyzyl concentrate stockpiles that accumulated in 2023 due to logistical challenges. The Company’s average realised gold price was US$ 2,409/oz, 23% higher than the 2023 average and slightly above the LBMA average. Other metals comprising Varvara’s copper concentrate are not meaningful for the consolidated Company’s results.
Kyzyl recorded a significant growth in revenue on the back of favourable gold price dynamics and an increase in sales amidst stable production (see above). At Varvara, higher prices compensated for a decrease in sales which related to a year-end lag between concentrate shipment to refinery and Dore production.
COST OF SALES
The total cost of sales grew by 41% to US$ 621 million mostly because of:
In 2024, the Company incurred a US$ 56 million net change in metal inventory largely reflecting the cost of sale of concentrate inventories accumulated in 2023; in 2023, a respective increase in metal inventories was recorded. The cost of services was up 13% driven by domestic inflation. Consumables and spare parts were stable as the Company managed to decrease diesel and reagents purchasing prices. Labour costs increased by 21%, reflecting an annual salary raise to track inflation and an increase in the average headcount. Mining tax grew by 20% on the back of the increase in the average realised gold price. Purchase of metal inventories from third parties declined by 23% due to lower purchases of the refined gold within trading operations. Depreciation and depletion were up 37% driven by expansion of mining, fleet renewal, and accelerated depletion of the tailings storage facility (TSF) No. 1 at Varvara on the back of the launch of the second TSF construction completion.
General, administrative and selling expenses
General, administrative and selling expenses (SGA) decreased by 8% to US$ 65 million on the back of:
Labour costs were up 19% due to annual salary growth tracking inflation and administrative headcount growth. Other operating expenses
Other operating expenses grew by 72% to US$ 31 million driven by the expansion of social programmes in the regions of operations and higher greenfield exploration expenses supporting the Company’s growth strategy.
TOTAL Cash costs[23] In 2024, total cash costs were US$ 971/GE oz, recording 8% y-o-y increase mostly due to inflationary pressure and price-driven mining tax increase outweighing higher sales. The table below summarises major factors that have affected the Company’s TCC and AISC dynamics y-o-y:
Total cash cost by segment/operation
Inflationary headwinds affected cost dynamics at both mines:
Analysis of H2 2024 versus H1 2024 performance:
In H2 2024, TCC were 3% higher compared to H1 2024 at US$ 985/GE oz. Kyzyl recorded a half-on-half decrease in costs thanks to the KZT depreciation in H2 balancing inflationary impact.
ALL-IN SUSTAINING AND all-in cash costs[24] All-in sustaining cash costs were up 3% to US$ 1,298/GE oz, a lower increase versus TCC dynamics due to a decrease in sustaining CAPEX per ounce stemming from the spread of expenditure over a larger amount of ounces sold. AISC by operations were driven by same factors and were as follows: All-in sustaining cash costs by segment/operation (US$/GE oz)
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2025-07-28 11:00:00