It's a funny old world, mining and selling gold and silver. In his review of 2016, Polymetal International (POLY) chairman Bobby Godsell reflected on "an air of optimism and hope that the down-cycle in the precious metals market" looked to be ending by the mid-year point. If that rally had been well served by unpredictable political events and unchartered monetary policy experiments until the summer, volatility in the oil market and the "unexpected results of the US elections" in the second half of the year conspired to burst the bubble. Now "a certain relaxation in geopolitical tensions" - presumably between Russia and the US - is cited as a renewed source of business stability, however definitive that ultimately proves.
If this makes for a sometimes confusing summary, then it still encapsulates two big stories for Polymetal in 2016. The first, well-served by political unpredictably, was price: although sales of silver and gold were flat, price rises of 10 and 11 per cent, respectively, pushed up the top line. The second, underscored by higher energy costs and the resultant strengthening effect on the rouble, was the 6 per cent increase in all-in sustaining cash costs to $776 (£628) per gold equivalent ounce - a theme particularly evident at the Mayskoye and Kapan mines, where costs struggled to break even.