Solidcore Resources, a Kazakh gold miner, anticipates that robust gold prices and strategic stock sales will largely compensate for a drop in production.
This decline is attributed to sanctions-related disruptions affecting concentrate shipments to Russia, according to the company’s CEO.
Gold prices surged to a record high of $3,728 an ounce on Tuesday, marking a more than 40% rally this year. This increase is largely attributed to expectations of an impending US interest rate cut in September.
Solidcore, previously known as Polymetal International, divested its Russian assets in 2024 following US sanctions. Despite this, the company retains US authorisation to export gold concentrate to Russia for processing.
Although the company’s net profit nearly doubled in 2024 due to high gold prices and increased sales, the first half of this year saw a 58% decline in profit, primarily due to the impact of sanctions on concentrate deliveries to Russia, according to a Kitco report.
Improving situation and outlook
“But the situation has already significantly improved in July and August,” CEO Vitaly Nesis told Reuters, adding that the company intends to reduce its inventory during the first quarter of 2026.
For 2025, the gold price will largely offset the 11% downward revision to the production forecast.
He also stated that the current year’s gold price rally is unsustainable, anticipating a decline. Nesis wouldn’t be surprised if the price dropped to $3,200 by year-end.
Solidcore, Kazakhstan’s second-largest gold miner, has postponed its previously discussed acquisitions of copper and gold assets in Central Asia.
The company cited record-high gold prices as the reason, and these acquisitions are now unlikely to occur this year.
Nesis added:
Both of those deals are in bad shape, if not completely off. Sellers’ price expectations have surged along with the gold price, and we are not yet ready to significantly raise our offer.
Solidcore will continue to send gold concentrate to Russia for processing at the Amursk pressure oxidation plant under a tolling agreement.
This arrangement will remain in place until Solidcore’s own Ertis plant is launched, which is scheduled for 2028.
Nesis announced that the company anticipates securing $500 million–$600 million in project financing for the Ertis plant from international institutions.
An agreement is expected in the first quarter of 2026, with potential finalization in the second quarter.
Gold continues rally
Gold prices hit a record high on Tuesday as the dollar weakened in anticipation of rate cuts by the US Federal Reserve later this week.
At the time of writing, the COMEX gold contract was at $3,721.22 per ounce, nearly flat from the previous change.
A weaker dollar makes commodities priced in the greenback cheaper for overseas buyers, thereby lifting demand.
On Monday, US President Donald Trump publicly urged Fed Chair Jerome Powell to implement a more significant cut to benchmark interest rates.
According to the CME FedWatch tool, traders are almost certainly anticipating a 25-basis-point (bps) rate cut at the conclusion of the two-day meeting on September 17, with a slight possibility of a 50 bps reduction.
Lower interest rates diminish the appeal of holding non-yielding bullion. This, in turn, weighs on the dollar, making gold more affordable for investors using other currencies.
The dollar, which recently opened a new tab, was trading near a 2.5-month low against the euro and close to a 10-month low against the risk-sensitive Australian dollar.
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