Shares in the Anglo-Russian firm have risen 212% over the past five years and 39.1% in the past 12 months, to 16.94 pounds sterling ($23 ), as investors seeking to reduce volatility in their portfolio and hedge against inflation boosted demand.

Gold climbed to an eight-week high to $1,900 an ounce on the first day of trading of the new year, as the emergence of more infectious strains of Covid-19 triggered deeper global lockdowns.

Polymetal, which has a market value of £8 billion, employs 11,611 workers and is the second-largest gold producer in Russia. It fetches a multiple of 8.7 times this year’s expected earnings and is valued at a 20% premium to its peers. The FTSE 100–listed company posted a pretax profit of $618 million for the 2020 calendar year, up from $426 million in 2018, on sales of $2.2 billion.

Polymetal, which has nine gold and silver-producing mines, gave an update on its production pipeline at the end of last year, promising a 17% increase in gold volume over the next five years. The company sports a 3.5% dividend yield.

Krishan Agarwal, an analyst at Citi, has marked the stock a Buy and thinks it could have further to rise because of the company’s significant gold-reserve increase. Polymetal has increased its reserve estimates at its Kyzyl mine in Russia, implying a 25% increase.

That should boost the mine life to 30 years, one of the longest in the global gold universe, Agarwal wrote at the end of last year. He has a £24.50 price target on Polymetal. He added, “We expect the company to beat its 2020 production and cash cost guidance.”

RBC Capital Markets estimated the stock at the same target price in a December note, and Russian investment bank VTB Capital estimates a 124% rise, to £38.

Maxim Nazimok, Polymetal’s chief financial officer, tells Barron’s that 2020 “was certainly challenging for the global mining industry due to the Covid-19 outbreak.”  Despite this, Polymetal avoided “any meaningful disruption to operations and delivered on our production targets,” he said. “We have also continued to move with our growth projects on schedule.”

Polymetal generated record cash flow thanks in part to higher precious metals prices, lower local currencies and robust operating results, he said. In the year ahead, Polymetal will see the “commissioning and start of production at Nezhda mine and progress on other projects in our long-term pipeline,” Nazimok said.

The company, which dates to 1998, was founded by private-equity boss Alexander Nesis, who still retains a 28% stake in the business. Established in Saint Petersburg, Polymetal accumulated mines and focused on assets that had been largely left inactive since Soviet-era exploration.

The business is well placed to benefit from the transfer to sustainable energy because it owns platinum metal mines. These contain palladium, which with copper form the cells used for solar power.