The credit rating of Resursy Albazino LLC (hereinafter, Albazino or the Company) reflects the Company’s standalone creditworthiness assessment (SCA) and the degree of support and dependence of the Company from JSC Polymetal (ACRA rating: AA-(RU), outlook Stable; hereinafter, Polymetal or the Supporting Entity). Given the very high degree of support from the Supporting Entity and the very high dependence of Albazino and Polymetal from the homogenous risk factors, the Company’s credit rating is on par with the credit rating of the Supporting Entity — AA-(RU).
The Company’s SCA reflects the medium assessments of market position, business profile and financial risk profile, as well as high scores for geographic diversification and corporate governance.
Albazino is one of the key mining assets of Polymetal, a gold mining company based in the Khabarovsk Krai. The Company’s perimeter includes an operating quarry for the extraction of rich gold ores and a flotation plant, from which the gold-containing concentrate is sent to a plant of Polymetal for further processing.
KEY ASSESSMENT FACTORS
The medium market position takes into account more moderate gold production volumes of Albazino compared to Polymetal.
The medium business profile reflects the medium score for the Costs sub-factor, which corresponds to the third quintile of the global cost curve; the medium score for the Resource Base Sufficiency sub-factor, which implies the remaining life of the deposit in the range of 20–30 years; the low score for the Product Diversification sub-factor, since the Company produces mostly gold.
ACRA notes the strong assessment of the Company’s geographic diversification based on the very high score for the Accessibility and Diversification of Sales Markets sub-factor and the medium score for the Concentration on One Field sub-factor, as the largest licensed ore mining area accounts for 45 to 60% of the Company’s total production volume.
The high assessment of corporate governance takes into account the availability of corporate practices and procedures applied at Polymetal regarding strategic guidelines, risk management, corporate management structure, and financial transparency. At the same time, the score for the Group Structure sub-factor is very high as the Company is represented by one legal entity.
The medium assessment of the Company’s financial risk profile reflects the medium score for the indicator characterizing the size of its business as per ACRA’s methodology. The profitability is assessed as high. Medium score for the leverage is based on the moderate ratio of total debt to FFO before net interest (3.1x in 2024 vs. 6.3x in 2023). The coverage is assessed as medium since the ratio of FFO before net interest to interest was 3.5x in 2024. The cash flow score is medium. The Company’s liquidity scored high due to a comfortable debt repayment schedule and sufficient internal sources of liquidity in the form of projected positive free cash flow.
The degree of support to the Company from the Supporting Entity is very high and their dependence on homogeneous risk factors is also very high because Albazino is one of the key assets of the Supporting Entity and performs specific functions critical for the Supporting Entity in terms of the continuity of internal processes. There is a direct associative relationship between Albazino and Polymetal, as well as the full strategic and operational control of the Supporting Entity over the Company. The two companies are also bound by mutual guarantees for each other’s debt obligations.
KEY ASSUMPTIONS
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Production volume as per the Company’s business plan.
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Capital expenditures as per the Company’s business plan.
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Balanced dividend policy in the forecast period from 2025 to 2027.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Upgrade of the Supporting Entity’s credit rating.
A negative rating action may be prompted by:
- Downgrade of the Supporting Entity’s credit rating.
RATING COMPONENTS
SCA: bbb+.
Support: from JSC Polymetal.
ISSUE RATING
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to Resursy Albazino LLC under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation, Methodology for Assigning Credit Ratings with External Support, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
A credit rating has been assigned to Resursy Albazino LLC for the first time. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on data provided by Resursy Albazino LLC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and Resursy Albazino LLC participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to Resursy Albazino LLC. No conflicts of interest were discovered in the course of credit rating assignment.
