(Reuters) – Polymetal decided to delay several projects due to Western sanctions against Russia. The gold- and silver miner had reported a 4% increase in revenue year-over-year to $616 millions, mainly because of higher gold prices.

According to the London-listed company, Polymetal said that the Western sanctions placed on Moscow following its troop deployment in Ukraine on February 24 put it under “tremendous” pressure for the first quarter. They haven’t directly targeted it.

Polymetal CEO Vitaly Nesis stated that the Board and management are continuing to explore ways to modify company assets ownership structures to protect shareholder value and meet the needs of all stakeholders.

Polymetal Russia’s second biggest producer of gold, after Polyus, announced it had restructured investment plans. The result is that POX-2, Russia’s processing plant for gold, will experience a delay of six months because supply chain problems. However, production should begin in the second half 2024.

Also, the company has suspended Pacific POX and is currently looking at options for relocating this Kazakhstan processing plant. Construction at the Veduga deposit of Veduga was delayed 12-18 months.

Polymetal delayed its decision on the 2021 final dividend till August. However, it stated that current 2022 capital expenditure was expected to be $650 million in light of shrinking investment potential and inflationary pressures.

Polymetal has increased its cash cost guidance from $850 to 900 to $850 to $950 per ounce due to the inflation in Russia as well as escalating logistical costs.

Its current guidance on production of gold substitute – which is an amalgam of different metals – stands at 1.65million ounces by 2023, 1.5 million ounces simultaneously in 2024/25 and 1.8million ounces respectively in 2026.

Polymetal reported that its production of gold equivalent decreased by 6% to 372 000 troy ounces during the quarter. The company also stated that they were on track for producing 1.7 million ounces by 2022.

Shares of the company were up by around 5% ()