Polymetal Cuts Forecast for Silver Output

Polymetal, the country's largest silver miner, cut its forecast for output of the metal on Monday because of a rapid fall in its price and said it would consider revising its investment plan for 2009.

The company said its new Albazino-Amursk project in the Far East would take priority when allocating next year's investment budget, although the expansion of its existing Dukat and Vorontsovskoye mines was on track.

"Polymetal is reviewing exploration and maintenance capital spending for 2009 to ensure adequate capital availability for Albazino-Amursk as the priority project," the company said.

Polymetal cuts its 2008 silver output forecast to between 16.5 million and 17.5 million ounces from a previous estimate of 17.7 million ounces.

Its share price fell 7.5 percent, underperforming the MICEX bourse's metals and mining index, which was down 3.6 percent.

"If the price falls roughly below $8.50, with all other costs being equal, we will probably take out some high-cost parts of both the Lunnoye and Dukat underground projects from our mining plan," chief executive Vitaly Nesis said.