UPDATE 1-Russia's Polyus may raise 2013 gold output by 7 pct

Mon Jan 28, 2013 8:14am GMT

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* 2012 gold output rose 12 percent

* 2013 output target is 1.7-1.8 mln ounces

* 2012 gold sales estimated to have risen 22 percent

MOSCOW, Jan 28 (Reuters) - Russia's biggest gold miner, Polyus Gold, may increase 2013 output by up to 7 percent due to rising production in Russia, the company said on Monday.

The company set its 2013 gold production target at between 1.7 and 1.8 million ounces or 1.59-1.68 million ounces, excluding output from Kazakhstan.

"It is expected that the increase would be driven by further improvement in recovery rates at Olimpiada, Titimukhta and Verninskoye (mines), along with the increase in processing volumes at Titimukhta," Polyus said in the statement.

In 2012, the company's gold output rose 12 percent to a record of 1.68 million ounces, Polyus said.

Its 2012 gold sales were estimated to reach $2.8 billion, up 22 percent, while its net cash position stood at $671 million at the end of the year.

Billionaire Mikhail Prokhorov is close to selling his 38-percent stake in Polyus in a complex deal currently being reviewed by British regulators, sources familiar with the matter said last week.

Polyus also said on Monday that it expects its 2013 capital expenditure to be in the range of $1.5-1.6 billion, more than double last year's $700-750 million.

A major part of this year's investment programme, up to $1.2 billion, will be spent on its Natalka development project, a large gold mine in Russia's Far East where the start of commissioning a processing plant is expected by the end of 2013.

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