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. Last Updated: 07/27/2016

Polyus Profit Surges After Stake Sale

Polyus Gold, the country's biggest producer of the metal, said full-year profit jumped more than tenfold after the sale of a stake in Gold Fields.

Net income increased to $1.16 billion from $113 million one year earlier, the company said in a statement. Polyus made $980 million from the sale of its Gold Fields stake. The cost of mining at its main deposit, Olimpiiskaya, rose to $210 an ounce, from $166.

Polyus, aiming to join the top five producers worldwide from No. 12 now, bought two miners in the Far East last year to expand output. The company, spun off from Norilsk Nickel in January last year, has also committed at least $150 million this year on exploration to expand reserves.

"I'm pretty disappointed, mainly on the jump in costs," said Vladimir Zhukov, analyst with Alfa Bank. Polyus' acquisitions, including Aldanzoloto and Lenzoloto, have added to its mining costs, he said.

Polyus produced 1.2 million ounces of gold last year, from 1.04 million in 2005. The fifth-largest gold miner is Harmony Gold Mining with 2.34 million ounces based on the previous four quarters, World Gold Analyst magazine reported in March.

Polyus does not plan to increase production this year.