Growth and Dividends Investor presentation June 2017 Kyzyl - - PowerPoint PPT Presentation

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Growth and Dividends Investor presentation June 2017 Kyzyl - - PowerPoint PPT Presentation

Growth and Dividends Investor presentation June 2017 Kyzyl processing plant construction Disclaimer that involve known and unknown risks and uncertainties, many of which are beyond the Company This presentation includes forward-looking


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Investor presentation

June 2017

Kyzyl processing plant construction

Growth and Dividends

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SLIDE 2

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Disclaimer

This presentation includes forward-looking statements that involve known and unknown risks and uncertainties, many of which are beyond the Company’ s control and all of which are based on the directors’ beliefs and expectations about future events. These forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions, predictions and other statements, which are other than statements of historical facts. The words “ believe,” “ expect,” “ anticipate,” “ intends,” “ estimate,” “ forecast,” “ project,” “ will,” “ may,” “ should” , “ shall” , “ could” , “ risk” , “ aims” , “ plans” , “ predicts” , “ continues” , “ assumes” , “ positioned” and similar expressions or the negative thereof identify certain of the forward-looking statements. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures; growth in demand for products; economic outlook and industry trends; developments of markets; the impact of regulatory initiatives; and the strength of competitors. The forward-looking statements in this presentation are based upon various assumptions and predictions, many of which are based, in turn, upon further assumptions and predictions, including, without limitation, management’ s examination of historical operating trends, data contained in the Company’ s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, and the Company may not achieve or accomplish these expectations, beliefs or projections. Many factors could cause the actual results to differ materially from those contained in predictions or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia and Kazakhstan, rapid technological and market change in the industries in which the Company operates, as well as other risks specifically related to the Company and its operations. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. Neither the Company, nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation. to reflect any change in their expectations or any change in events, conditions or circumstances on which such statements are based Nothing in this presentation constitutes an offer, invitation, recommendation to purchase, sell or subscribe for any securities in any jurisdiction or solicitation of any offer to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as any inducement to enter into, any investment activity. To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such

  • data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company has not independently verified the data

contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. The information contained in this presentation has not been independently verified. Neither the Company, any of its affiliates, subsidiaries or subsidiary undertakings nor any of their respective advisors or representatives makes any representation or warranty, express or implied, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or

  • pinions contained in this presentation. Percentages and certain amounts included in this presentation have been rounded for ease of presentation. Accordingly figures shown as totals in

certain tables may not be the precise sum of the figures that precede them. Neither the Company, or any of its affiliates, advisors or representatives accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any information contained in the presentation.

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Polymetal today High-quality, low cost asset base

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˃6 operations in Russia, 1 in Kazakhstan and 1 in Armenia ˃1 POX facility and 4 major development projects ˃Market cap of US$ 5.5 billion*, FTSE 250 constituent

Notes: *As at market close 1.06.2017

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SLIDE 4

Simple strategic objectives and clear execution priorities

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> Deliver a significant and sustainable dividend > Ensure significant and profitable growth > Control costs and replace reserves at

  • perating mines

> Deliver medium-term growth at Kyzyl > Build and advance a long-term growth pipeline > Maintain highest standards of corporate governance and sustainable development

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5-year results: dividend yield and TSR

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3.6% 3.2% 2.4% 2.4% 2.2% 2.1% 2.0% 1.8% 1.8% 1.7% 1.6% 1.6% 1.6% 1.5% 0.8% 0.6% 0.0% Polymetal FTSE 250 Centerra Centamin Acacia Newmont Yamana Goldfields Kinross Barrick Anglogold Newcrest FTSE GM Agnico Eagle Eldorado Randgold New Gold

5Y* Sector-leading dividend yield

Notes: *Bloomberg data as at market close 11.05.2017 since POLY IPO

24% 18% 13%

  • 15%
  • 22%
  • 30%
  • 35%
  • 46%
  • 50%
  • 56%
  • 58%
  • 58%
  • 65% -67%
  • 71%
  • 75%
  • 76%
  • 81%
  • 81%

Centamin Agnico Eagle Polymetal Randgold Fresnillo Gold Acacia Newmont Silver Newcrest FTSE GM New Gold Barrick Centerra Kinross Anglogold Goldfields Eldorado Yamana

5Y* TSR

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5-year results: we deliver on production

| 6 900 1,090 1,190 1,220 1,260 952 1,168 1,312 1,267 1,269 2012 2013 2014 2015 2016

Guidance Actual +6% +7% +10%

Annual production based on 80:1 Ag/Au ratio (Koz of GE)*

+4%

* Company historical gold equivalent guidance recalculated using 80:1 Ag oz/Au oz conversion ratio.

+1%

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SLIDE 7

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Sustainability is the only way forward

strikes and lockouts

major environmental incidents

5.5%

staff turnover in 2016

0.2

LTIFR (4 fatalities in 2016)

US$13.6M

community investments 2014-16

42%

female qualified personnel

Member 2016/2017

25

cooperation agreements with communities

60

hours of training per person

11,261

people

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We are committed to delivering sustainable value

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2016-2017 Sustainability highlights

> Signatory to the International Cyanide Management Code > Leader for Environmental management in WWF/UN rating > Completion of ESIA at Kyzyl (EBRD Environmental and Social Policy implemented) > Carbon Management and Human Rights Policies signed > 50% reduction of extreme risks and 14% LTIFR reduction > Biodiversity conservation incorporated into corporate environmental management > Over 50 social service institutions renovated or upgraded in host communities

  • \
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We have high-grade reserves

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Average reserve grade (2P reserves), g/t GE

Source: Company data. Gold, silver, copper proved and probable reserves as of 01.01.2017 GE at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios.

4.2 3.8 6.3 2.8 3.6 2.9 2.3 1.9 1.7 1.6 1.4 1.4 1.4 1.3 1.3 1.3 1.1 1.1 1.1 1.0 0.9 0.9 0.7

Acacia Average Underground Open-pit Randgold Gold Fields Agnico Eagle Pan American Goldcorp Eldorado Iamgold Anglogold Fresnillo Barrick Newmont Yamana Newcrest Centamin New Gold Buenaventura Tahoe Kinross Centerra Polymetal

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We have low costs

| 10 1,057 1,000 987 986 984 958 943 912 911 900 894 828 856 828 813 776 762 756 730 706 694 687

Iamgold Pan American Gold Fields Anglogold Kinross Acacia Tahoe Newmont Yamana Eldorado Agnico Eagle New Gold Goldcorp Hochschild Randgold Polymetal Newcrest Centerra Barrick Buenaventura Centamin Fresnillo

All-in sustaining cash costs for FY2016, US$/oz of GE

Source: Company data on a co-product basis. Buenaventura, Centamin, Centerra Gold: AISC reported on by-product basis Hochschild: AISC based on Ag/Au ratio of 74 | Yamana, Newmont, New Gold, Agnico Eagle: disclosed AISC for gold *Randgold: BMO calculation based on FY2016 results | Pan American: BMO estimate*80 (Ag/Au) | Fresnillo: BMO estimate

* * *

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| 11 1,269 1,400 1,470 1,420 1,470 80 280 330 1,269 1,400 1,550 1,700 1,800 2016A 2017E 2018E 2019E 2020E

Kyzyl Existing

  • perations

69% 77% 82% 87% 87% 2016A 2017E 2018E 2019E 2020E

Gold production, Koz of GE1

Notes: GE at 80:1 Ag oz/Au oz, 1:5 Cu mt/Au oz and 1:2 Zn mt/Au oz conversion ratios.

Share of gold in production1

We have robust growth profile

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| 12 145 157 145 150 170 47 45 50 50 50 32 86 145 80 30 30 30 224 288 370 310 250 2015A 2016A 2017E 2018E 2019E Long-term growth projects Kyzyl and POX expansion Exploration Stay-in-business CapEx

Capital expenditures, US$M

Our business model is capital-light

Notes: Long-term growth projects include Prognoz, Viksha and Nezhda. Total capital expenditure in 2015-2016 includes amounts payable at the end of the period. On a cash basis, capital expenditure was US$ 271 million in 2016 (2015: US$ 205 million).

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We generate significant free cash flow

| 13 2.2 1.1 (1.1) OCF Capex FCF (Pre- M&A) Randgold 2.5 1.1 (1.4) OCF Capex FCF (Pre- M&A) Polymetal 2.8 0.3 (2.4) OCF Capex FCF (Pre- M&A) Fresnillo

Pre-M&A free cash flow in 2012-2016, US$ bn

Notes: Company data. Free cash flow (pre-M&A)

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… and we deliver meaningful cash returns to shareholders

Total Dividends and FCF for 2012-2016, US$ bn

1.0 1.1 0.3 0.9 0.2 1.1 Polymetal Randgold Fresnillo Pre M&A FCF Dividends

Notes: Company data. Free cash flow (pre-M&A)

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Track record of substantial dividend payments

| 15 0.20 0.32 0.16 0.21 0.22 0.18 0.50 0.20 0.30 0.15 0.70 0.32 0.36 0.51 0.37 0.18 2012 2013 2014 2015 2016 2017

Special at the discretion of the Board Regular (50% of underlying net income starting FY2017, before that - 30%)

Notes: Source: Bloomberg 1) As at market close 11 May 2017 2) As at market close 11 May 2017 since POLY IPO

Dividends, US$ per share

> US$ 911 million paid out in 5 years > LTM yield of 3.4% > Average 5-year yield of 3.6%

(2) (1)

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We continue to provide both valuation upside and meaningful current income

75.8x 72.1x 66.9x 36.6x 33.0x 32.1x 31.5x 29.2x 24.9x 22.1x 19.2x 16.2x 14.1x 12.1x 8.7x <0 <0 <0 <0

Anglogold Goldcorp Agnico Eagle Newcrest Randgold Iamgold Fresnillo Barrick Pan American Acacia Tahoe Gold Fields Polymetal Centamin Centerra Yamana Buenaventura Kinross Newmont Eldorado

2017E P/E

Source: Bloomberg data (Dividend yield calculated in US dollars as of 11.05.2017, 2017 P/E updated as at 28.04.2017)

3.4% 3.1% 2.8% 2.3% 2.0% 1.2% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.6% 0.6% 0.5% 0.5% 0.5% 0.3% 0.3% 0.3% 0.0% 0.0% Polymetal FTSE 250 Centamin Tahoe Centerra Goldfields Acacia Yamana Anglogold Agnico Eagle Randgold FTSE GM Fresnillo Newcrest Barrick Pan American Silver Hochschild Newmont Buenaventura Eldorado New Gold Kinross

LTM Dividend yield

<0

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FY2016 FY2017 Production, GE Koz 1,269 1,400 Total cash cost, US$/GE oz 570 600-650 All-in sustaining cash cost, US$/GE oz 776 775-825 Capital expenditure, US$M 271 370 Free cash flow, US$M 257 Positive at gold prices above US$1000/oz Regular dividend Definitely Special dividend Dependent on gold price Gold, US$/oz. 1,250 1,200 Silver, US$/oz. 17.3 16.0 RUR/USD rate 67 60 Brent oil, US$ 49 60

FY2017 Outlook

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Operating assets review

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Key facts:

> Location: Magadan Region, Russia > Life of mine: 2023 > Mining: Underground > Processing: 1.8 Mtpa concentrator and 425 Ktpa Merrill Crowe plant > Reserves (JORC): 2.1 Moz GE, 4.7 g/t > Resources (JORC): 0.6 Moz GE, 13.3 g/t > Employees: 1,897

Dukat

Operation Development Plant City

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Grade, (g/t)

Notes: GE produced at 80:1 Ag oz/Au oz; SE (silver eq.) per oz sold based on actual realised prices (for AISC)

1,574 1,711 1,817 1,938 338 400 416 435 1,912 2,111 2,233 2,373 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

Dukat concentrator Lunnoye plant

317 344 393 369 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

6.0 5.8 6.4 5.6

13.9 10.9 7.8 8.0 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/SE oz)

44.4 42.8 47.6 46.3 FY 2013 FY 2014 FY 2015 FY 2016

Underground development (Km)

Dukat

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˃ Start of production from high-grade satellite deposits ˃ Perevalnoye (ore reserves of 350 Kt, at 5.9 g/t GE) in Q4 2017 ˃ Terem (mineral resources1 of 690 Kt, at 21.9 g/t GE) in Q1 2018 ˃ Primorskoye (mineral resources of 500 Kt, at 19.6 g/t GE) in Q3 2019 ˃Step-out exploration at deeper flanks of Dukat and Lunnoye ˃Removal of left-behind pillars and lower-grade stopes where no minimal development is needed through application of differentiated cut-off grade

| 21 ˃Extend LOM to 2027 while maintaining stable costs ˃Slow down grade erosion and production decline ˃Improve processing capacity utilization

Notes: 1) Unaudited mineral resource estimate

Dukat: operational priorities

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Albazino

Key facts:

> Location: Khabarovsk Territory, Russia > Commissioning: 2009 > Life of mine: 2031 > Mining: Open pit/Underground > Processing: 1.6 Mtpa flotation circuit followed by POX and CIL processing at Amursk Hub > Reserves (JORC): 2.0 GE Moz, 4.2 g/t > Resources (JORC): 1.7 GE Moz, 5.3 g/t > Employees: 988

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Albazino

Grade, (g/t)

1,513 1,609 1,607 1,654 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

238 227 220 244 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

5.6 4.8 5.2 5.0

1,139 901 667 684 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

49 63 69 72 62 76 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Ore mined, underground (Kt)

3.6 4.4 4.9 5.2 6.5 4.8

Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

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˃ Acceleration of satellite open-pit development: ˃ Ekaterina 1 (ore reserves of 380 Kt at 3.5 g/t GE) ˃ Ekaterina 2 (ore reserves of 1,170 Kt at 2.6 g/t GE) ˃ Ekaterina 3 (ore reserves of 200 Kt at 3.5 g/t GE) ˃ Farida (mineral resources of 610 Kt at 4.0 g/t GE) ˃ Continued resource-to-reserve conversion in the underground mine ˃ Continued near-mine exploration

Albazino: operational priorities

| 24 ˃Stable production and costs for the next 10-12 years

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Mayskoye

Key facts:

> Location: Chukotka, Russia > Commissioning: 2011 > Life of mine: 2034 > Mining: Underground and open pit > Processing: 850 Ktpa flotation concentrator/CIL > Reserves (JORC): 1.4 Moz GE, 6.9 g/t > Resources (JORC): 3.2 GE Moz, 11.9 g/t > Employees: 977

Operation Development Plant Sea port / City

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Mayskoye

Grade, (g/t)

48 143 138 116 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

7.1 8.7 6.7 5.3

NR 1,134 935 1,242 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

121 168 213 227 231

Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017

Ore mined, underground (Kt)

Grade, (g/t) 6.5 4.8 5.2 5.2 6.1

488 807 683 761 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

10.0 10.5 13.8 19.5

FY 2013 FY 2014 FY 2015 FY 2016

Underground development (Km)

Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

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˃ Start up of the CIP section with high-grade feed from the open pit ˃ Maintain safety, productivity and grade control underground ˃ Accelerate resource-to-reserve conversion both in the open pit and underground

Mayskoye: operational priorities

| 27 ˃Stable production for the next 8-10 years with 2017-2019 costs lower by 25-30% vs 2016

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Omolon

Key facts:

> Location: Magadan Region, Russia > Commissioning: 2010 > Life of mine: 2024 > Mining: Open pit/Underground > Processing: 850 Ktpa CIP and Merrill Crowe,1000 Ktpa HL > Reserves (JORC): 1.5 Moz GE, 3.7 g/t > Mineral resources (JORC): 0.6 GE Moz, 10.3 g/t > Employees: 725

Operation Development Depleted Plant City

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767 825 835 840 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

1,322 722 732 675 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

Grade, (g/t)

147 213 188 170 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

6.6 8.4 7.5 7.0

Omolon: operational statistics

  • 0.9

2.8 6.3 FY 2013 FY 2014 FY 2015 FY 2016

Underground development (Km)

17 10 8 8 FY 2013 FY 2014 FY 2015 FY 2016

Waste mined (Mt)

Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

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˃ Smooth roll-over from older depleted ore sources (Tsokol, Dalniy) to Birkachan, Oroch ˃ Continued resource and reserve accretion at Olcha, Sopka, Nevenrekan, Yolochka ˃ Restart of Heap Leach operation at Birkachan

Omolon: operational priorities

| 30 ˃Stable production and costs for the next 7-8 years ˃Advancing LOM extension options

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Omolon: production by ore source

| 31 825 835 840 850 850 850 850 8.4 7.5 7.0 7.6 7.0 7.9 7.0 2 4 6 8 300 600 900 1200 1500 2014 2015 2016 2017E 2018E 2019E 2020E Ore processed breakdown, Kt Birkachan Sopka Tsokol Olcha Dalneye Oroch Grade GE, g/t Grade GE, g/t

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> Location: North-western Kazakhstan > Commissioning: 2007 > Life of mine: 2029 > Mining: Open pit > Processing: CIL (2.5 Mtpa)/ flotation (1 Mtpa) > Reserves (JORC): 2.9 Moz GE, 1.6 g/t > Resources (JORC): 2.7 Moz GE, 1.6 g/t > Employees: 1,129

Key facts:

Varvara

Operation Development Plant City

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Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

3,676 3,664 3,457 3,119 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

1,088 1,049 1,092 975 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

Grade, (g/t)

131 106 72 85 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

1.5 1.2 0.9 1.1

Varvara: operational statistics

31 31 29 22 FY 2013 FY 2014 FY 2015 FY 2016

Waste mined (Mt)

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Ore Processed by source (Kt)

741 774 651 551 390 459 571 559 29 74 235 393 450 470 450 8 27 7 23 22 60 60 50 749 829 732 810 805 969 1,101 1,059

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017E Q3 2017E Q4 2017E Other Komar Varvara

Komar will drive a strong jump in production at Varvara in 2017

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Varvara: operational priorities

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> Full re-evaluation of ore reserves at Komar and Varvara based on additional drilling, factual costs and recoveries (Q4 2017) > Evaluation of in-pit waste storage at both Komar and Varvara with the goal to reduce operational footprint and cut costs by reducing average waste haulage distance twofold > Optimisation of the long-term mine plan for the hub as a whole with evaluation of strategic options for assets on the Russian side of the border (Tarutin, Maminskoye) > Continued active presence on the market for 3rd party ore

˃Stable production for the next 10-12 years ˃Costs trending lower 15-20% vs 2016

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Key facts:

> Location: Khabarovsk Region, Russia > Commissioning: 2003 > Life of mine: 2024 > Mining: Open pit/Underground > Processing: 600 Ktpa Merrill Crowe, 1000 Ktpa HL circuit at Svetloye > Reserves (JORC): 0.9 Moz GE, 3.2 g/t average grade > Resources (JORC): 0.5 Moz GE, 5.2 g/t average grade > Employees: 1,182

Okhotsk

Operation Development Plant Sea port

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Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

619 622 631 627 428 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

Okhotsk Svetloye 1,055 1,065 909 621 752 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

Grade, (g/t)

134 119 114 131 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

7.5 6.7 6.2 4.9

Okhotsk: operational statistics

0.9 3.8 3.8 4.7 FY 2013 FY 2014 FY 2015 FY 2016

Underground development (Km)

9 9 2 1 FY 2013 FY 2014 FY 2015 FY 2016

Waste mined (Mt)

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> De-bottlenecking heap leach stacking capacity at Svetloye given significant expansion in ore reserves following positive grade reconciliation after in-fill drilling and positive exploration results on the flanks > Continued exploration at smaller high-grade satellite deposits potentially providing feedstock at Khakanja (Khotorchan, Kundumi, Kirankan) > Advancing Levoberezhny, particularly the heap leachable oxide cap > Evaluation of strategic options for the Khakanja plant and associated smaller deposits

˃ Stable production at very low costs at Svetloye for the next 7-8 years ˃ Flexible ore source planning for Khakanja

Okhotsk: operational priorities

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Key facts:

> Location: Sverdlovsk Region, Russia > Commissioning: 2000 (HL), 2005 (CIP) > Life of mine: 2027 > Mining: Open pit > Processing: 950 Ktpa CIP circuit > Reserves (JORC): 0.9 GE Moz, 2.5 g/t > Resources (JORC): 0.8 GE Moz, 4.4 g/t > Employees: 874

Voro

Operation Development Plant City

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Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

924 915 924 1,001 850 747 450 319 1,774 1,662 1,375 1,321 FY 2013 FY 2014 FY 2015 FY 2016

Ore Processed (Kt)

CIP HL 692 515 391 419 FY 2013 FY 2014 FY 2015 FY 2016

AISC (US$/GE oz)

Grade, (g/t)

154 159 141 129 FY 2013 FY 2014 FY 2015 FY 2016

Production (GE Koz)

3.6 3.7 3.4 3.6

Voro: operational statistics

11 11 10 10 FY 2013 FY 2014 FY 2015 FY 2016

Waste mined (Mt)

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> Reserve estimate for Saum and Tamunier in H1 2018 > Feasibility study for the joint development of Saum, North Kaluga and Tamunier with an upgrade of the existing CIP plant to include flotation circuit in Q3 2018 > Continue regional exploration and evaluation of bolt-on M&A opportunities

˃ Declining medium-term production and the cessation of mining at Voro in 2019 ˃ Stockpile processing in 2019-2027

Voro: operational priorities

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Key facts:

˃ Location: Kapan province, Armenia ˃ Acquired by Polymetal: April 2016 ˃ Mining: underground ˃ Processing: flotation concentration followed by offtake ˃ Life of mine: TBC in Q3 2017 ˃ Ore reserves: TBC in Q3 2017 ˃ Mineral resources:

  • Kapan 1.9 GE Moz, 4.0 g/t average grade (JORC)
  • Lichkvaz 0.6 GE Moz, 4.2 g/t average grade (JORC)

˃ Employees: 1,154

Kapan Our first Armenian operation

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Kapan: operating statistics

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42 33 41 41 38 29 27 45 44

Ore Processed (Kt)

4.5 4.2 4.5 2.5 2.4 2.5 1.4 3.9 6.0

Production (GE Koz)

Grade, (g/t) 3.3 3.9 3.5 1.9 2.0 2.6 2.2 3.4 5.0

1.3 1.2 1.1 1.3 1.2 1.1 1.3 1.0 1.1

Underground development (Km)

Notes: GE produced at 80:1 Ag oz/Au oz; GE (gold eq.) per oz sold based on actual realised prices (for AISC)

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> Carry on with improvement measures aimed at debottlenecking the underground mine > Undertake additional drilling to produce a JORC-compliant reserve estimate and a combined LOM for Kapan and Lichkvaz in Q3 2017 > Continue active exploration activities in the region

Kapan: operational priorities

˃A capital-light regional processing hub with sizeable production of more than 100 Koz of GE per annum

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Kyzyl project update

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Kyzyl is one of the best development-stage gold projects in the world

> Large: 7.3 Moz of gold reserves, of which 3.1 Moz is open pit > High-grade: 7.7 g/t with 6.7 g/t in the open pit > Excellent exploration upside: 3.1 Moz of additional resources at 6.8 g/t > LOM: 22 years (first 10 years open pit) > Low capital intensity: US$375M (open pit + flotation + POX expansion) > Robust economics:*

  • US$ 488/oz TCC
  • US$ 518/oz AISC
  • 33% IRR
  • US$ 750M NPV

Notes: *Based on 10% discount rate. the gold price of US$ 1,200/oz, RUB/USD exchange rate of 64 and Tenge/USD exchange rate of 300. .

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| 47 Permitting Engineering Contracting Construction Open pit Processing plant External Infrastructure 100 % 100% 100 % 90 % 100% 100 % 35 % 100 % 100 % 100 % 95 % 95 % Internal Infrastructure Tailings storage 100 % 100 % 90 % 70 % 100 % 100 % 95 % 40 %

Kyzyl Completion scorecard

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SLIDE 48

| 48

Wastewater treatment facility Mine camp Administrative building Concentrate storage Repair shop Primary grinding facility Processing plant Laboratory Boiler Ore storage site Reagent storage Coal storage Pumping station Open equipment storage Accumulating sump pond

Kyzyl Mine site

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SLIDE 49

| 49

Completion, % Installation of frame and wall panels 100 % Filling of openings (windows, doors) 100 %

Kyzyl Processing plant

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SLIDE 50

| 50

Kyzyl Open pit

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SLIDE 51

| 51

Completion, % External power supply facilities (ETL и MSDS) 85 %

Kyzyl infrastructure External power supply facility

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SLIDE 52

| 52

Completion, % Boiler house in the Auezov village 90 % On site boiler house 70 %

Kyzyl infrastructure Boiler house

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SLIDE 53

| 53

Completion, % Maintenance shop 50 %

Kyzyl infrastructure Maintenance shop

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SLIDE 54

| 54

Completion, % Tailings storage 30 %

Kyzyl infrastructure Tailings storage

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SLIDE 55

| 55

> The debottlenecking project will expand the capacity of the existing POX plant by ~50% in terms of concentrate processed which is now limited by the capacity of the

  • xygen plant

> The key additions to the equipment will comprise a 2nd oxygen plant, an autoclave discharge thickener, separate filters for thickener underflow, and upgrades for heat recovery and water treatment systems > US$ 55M CapEx to be predominantly invested in 2017-2018 > Polymetal plans to ramp up the debottlenecked POX plant to full expanded capacity in the H2 2018 The project will enable Polymetal to: > Materially improve economics of the Kyzyl project by retaining ~50% of concentrate for in-house treatment at the POX by: > Increasing gold recovery from the Kyzyl concentrate > Bringing down processing and transportation costs > Strengthen Polymetal’s commercial position on the concentrate market vis-à- vis off-takers > Add development optionality for other refractory gold projects in the Company’ s portfolio

Amursk POX expansion project Operating synergies with Kyzyl

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SLIDE 56

| 56

Amursk POX expansion project Construction progress

Hydrometallurgical plant Installation of monolithic foundations Leach tailings filtration circuit Installation of building frame foundations Oxygen plant #2 Installation of monolithic foundations Cooling unit Installation of foundations

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SLIDE 57

| 57

Growth beyond 2020

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SLIDE 58

Nezhda JV

| 58 > Polymetal is earning 50% by spending US$ 90 million on development > Substantial resource: 20 Moz of gold at 5.1 g/t (non-JORC compliant) > Potential for sizeable open-pittable reserves followed by underground > Low capital intensity and excellent fit with Polymetal’s core capabilities: processing via flotation followed by concentrate offtake > First JORC-compliant reserve statement in H2 2017 and development decision in Q3 2018

5 000 m 1 000 m

0-5 5-25 25-50 50-70 70-100 100, ceiling Legend, AU m*g/t

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SLIDE 59

Nezhda: progress

| 59

2016 2017

Exploration Completion of exploration (39 400 l.m.) Preparation of actual geological model Conversion of mineral resources into higher categories Mineral Resource estimate for the open pit Exploration

  • Further exploration of the
  • re zone 1 and adjacent

areas to grow open-pittable resources

  • Further upgrade of inferred

resources into indicated

  • Geomechanical and mining

method studies

Potential start of production in 2021

Technology Study of ore properties in lab conditions Selection of ore treatment flowsheet Primary hydrometallurgical studies Technology

  • Pilot plant test-work
  • Hydrometallurgical studies

(concentrate)

  • Study of concentrate

thickening and filtration

  • Reagent mode optimization
  • Issue of operating

procedure Design

  • Optimization of open-pit

mining

  • Project documentation for

processing facility

  • Processing equipment

marketing

Notes: Start of production subject to positive development decision

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SLIDE 60

Viksha – our first PGM asset

| 60

Gram-meter (gm-m)

˃ 20-year mining licence granted on July 18, 2016 for a project area of 47km2 ˃ Mineral Resources: 213 Mt at 0.98 g/t of combined precious metals, total content at 6.6 Moz ˃ Processing: conventional flotation processing to produce bulk copper-PGM sulphide concentrate + off-take ˃ Average thickness: 7 m ˃ Depth of open pit: 150 m

One of the largest open pittable PGM resources in the world

Consistent gram-meter (gm-m) down dip (Pd eq.* ore body width)

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SLIDE 61

Viksha: project timeline

| 61

2016 2017 2018 2019

Q1 License documents submitted for governmental approval Q2 Received governmental approval New mining license granted Q4 Exploration program approved and being launched Q1

  • Geological

engineering survey Q2

  • Pilot plant testwork

Q4

  • Confirmatory testwork

Q2

  • Exploration completed
  • Start of feasibility study development and reserves estimate

Q3

  • Submission of Russian FS to Subsoil agency (Rosnedra) and get reserves on balance
  • Bankable FS and development decision

Potential start of production in 2022

Notes: Start of production subject to positive development decision

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SLIDE 62

Prognoz – the largest undeveloped primary silver deposit in Russia

| 62 Ownership: > 5% with an option to increase stake to 50% (investment decision to be made no later than Q1 2020) > the other 50% owned by financial investor and potentially available Mineral resources: 292 Moz at 586 g/t* silver, 3% lead Additional mineral potential: 7.9 - 18.1 Mt of ore at 469 g/t silver for 119 – 273 Moz of silver contained* Mining method: Open-pit (5-8 years), followed by underground Throughput: ~1 Mtpa Production: 20 Moz of silver per annum (100%) Capex: ~$250M (100%)

Notes: * Estimated by Micon in 2009

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SLIDE 63

Prognoz: project timeline

| 63

2017

  • Focus on exploration (at least 25km of diamond drilling)
  • Start of technical study development and reserve estimate

2018

  • Preparation of preliminary feasibility study
  • No later than 31 March 2019 - completion of pre-feasibility study and externally audited

JORC-compliant reserves estimate followed by investment decision

2019

  • Preparation of the FS (combined mining method, reserves estimate)
  • Design of processing plant and infrastructure

2020

  • Completion of permitting stage
  • Development decision and start of construction

Potential start of production in 2023

Notes: Start of production subject to positive development decision

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SLIDE 64

| 64

Appendix

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SLIDE 65

| 65

2016 2015 % Change (1) Revenue, US$M 1,583 1,441 +10% Adjusted EBITDA, US$M 759 658 +15% Adjusted EBITDA margin 48% 46% +2bps Total cash cost, US$/GE oz 570 538 +6% All-in sustaining cash cost, US$/GE oz 776 733 +6% Profit/ (Loss) for the year, US$M 395 221 +79% Underlying net earnings, US$M 382 291 +31% Underlying EPS, US$/share 0.90 0.70 +28% Dividend declared during the period, US$/share (2) 0.37 0.51

  • 27%

Net operating cash flow, US$M 530 490 +8% Capital expenditure, US$M 271 205 +32% Free cash flow (ex M&A), US$M 257 263

  • 2%

Net debt/Adjusted EBITDA 1.75 1.97

  • 11%

Net debt, US$M 1,330 1,298 +2%

Financial highlights

Notes: (1) % changes can be different from zero even when absolute amounts are unchanged due to rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. (2) FY2016: final dividend for FY 2015, interim and special dividend for FY 2016. FY2015: final dividend for FY 2014, interim and special for FY 2015.

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SLIDE 66

Reserves and resources

| 66

2.1 1.5 2.0 1.4 0.9 0.9 2.9 7.3 0.9 19.8 0.6 0.6 1.7 3.2 0.5 0.8 2.7 3.1 2.5 0.7 16.5

Dukat Omolon Albazino Mayskoye Okhotsk Voro Varvara Kyzyl Kapan Other Total

Reserves Resources

Notes: Reserve and resource statement (JORC 2012) as at 01.01.2017. Gold and silver price assumptions of $1,200/oz and $16/oz, respectively. *Assuming a reasonable resource-to-reserve conversion

GE Moz

4.7 3.7 4.2 6.9 3.2 2.5 1.6 3.8 Reserve grade, g/t

2.7 2.0 3.7 4.7 1.4 1.7 5.6 1.7 36.3

2023 2024 2031 2034 2024 2027 2029 LOM 7.7 2039 4.1

10.4 2.5

N/A N/A

* *

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SLIDE 67

Financial performance is heavily dependent on the RUB/USD exchange rate and oil price dynamics

| 67 Labor, 24% Fuel, 20% Services, 23% Grid power, 4% Non-fuel consumables, 21% Royalty, 8% $ / RUB / Tenge RUB/ Tenge Oil $ / Au Oil / RUB / Tenge RUB / Tenge

RUB, 41% Tenge , 9% $, 20% Oil, 30%

OpEx Structure, $/oz

> A 1 RUB movement in domestic currency will have an US$8/oz effect on TCC and US$12M on Adj. EBITDA

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SLIDE 68

| 68

RUB, 20% $, 40% Tenge, 40%

Project Capex

(Kyzyl + Amursk + LT projects)

Sustaining Capex

RUB, 50% $, 20% Tenge, 30%

> A 10% devaluation of domestic currencies will have approx. 8% effect on the sustaining capex or ~US$8/oz > A 10% devaluation of domestic currencies will have approx. 6% effect on the project capex (US$175M in 2017) or ~US$11 million

Capital expenditures also sensitive to FX dynamics

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SLIDE 69

Liquidity profile

| 69 Debt maturity profile, US$M Financing updates: > US$ 400M Sberbank loan maturing in November 2018 has been extended by 7 years until 2024 on the same key terms with an adjustment of the interest rate in line with the more competitive current market rates. > US$ 140M 5-year loan has been agreed with EBRD to finance the remaining capital expenditures for the Kyzyl project. Signing is planned for June. > Debt maturing in 2019 will be extended before year- end. Robust liquidity profile: ~US$ 1 bn of undrawn credit facilities Comfortable leverage: 1.75x Net Debt/ Adjusted EBITDA Low cost of debt at less than 4% Net debt of US$1.5bn*, mostly bilateral, 100% denominated in US dollars

Notes: *As at 31.03.2016

  • 100

200 300 400 500 600 700 2017 2018 2019 2020 2021 2022 2023 2024

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| 70

Notes: Shareholder structure data as of 1 May, 2017

59% Free Float 27% ICT Group

(Alexander Nesis)

13% PPF

(Petr Kellner)

Christine Coignard Senior INED ex-MD HCF International Advisors Chair of the Remuneration Committee Jonathan Best INED ex-CFO of AngloGold Ashanti Chair of the Audit and Risk Committee Russell Skirrow INED ex-Chairman ML Metals/ Mining IB team Leonard Homeniuk INED ex-President of Centerra Gold Chair of the Safety and Sustainability Committee Jean-Pascal Duvieusart PPF Group ex-Managing Partner at McKinsey Konstantin Yanakov ICT Group Ltd ex-CFO of Polymetal Marina Gronberg Vitalbond Ltd and Lynwood Capital Management Fund Ltd Vitaly Nesis Group CEO

Shares outstanding 430,112,661

1% Management & Directors

Bobby Godsell Chair Chairman of Business Leadership South Africa, ex-CEO of AngloGold Ashanti Chair of the Nomination Committee

Shareholder structure and Board of Directors

INED Non-independent

  • 14% High net worth

individuals

  • 45% Institutional

investors