Growth and Dividends Investor Presentation January 2017 Disclaimer - - PowerPoint PPT Presentation

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Growth and Dividends Investor Presentation January 2017 Disclaimer - - PowerPoint PPT Presentation

Growth and Dividends Investor Presentation January 2017 Disclaimer This presentation includes forward-looking statements that involve known and unknown risks and uncertainties, many of which are beyond the Companys control and all of which are


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SLIDE 1

Growth and Dividends

Investor Presentation

January 2017

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SLIDE 2

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
  • r 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 opinions 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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SLIDE 3

Polymetal today

> 8 mines with 2016 production of 1.26 Moz of GE > 21.7 Moz of GE in reserves and 16.5 Moz of GE in resources > US$ 5.2 billion Market Cap*, member of the FTSE 250

*Market cap as of January 24, 2017 2

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SLIDE 4

We have simple strategic objectives and clear execution priorities

> We want to pay a significant and sustainable dividend through the cycle > We want to grow our business without diluting its quality > Control costs and add high- quality reserve ounces at

  • perating mines

> Deliver medium-term growth through building and ramping up Kyzyl > Opportunistically pursue M&A targets and greenfield exploration with high-

  • ptionality

3

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SLIDE 5

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

We deliver on production

+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. 4

+1%

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SLIDE 6

1,267 1,269 1,400 1,470 1,420 1,470 80 280 330 1,400 1,550 1,700 1,800 2015A 2016A 2017E 2018E 2019E 2020E

Kyzyl Existing

  • perations

68% 69% 77% 82% 87% 87% 2015A 2016A 2017E 2018E 2019E 2020E

We have robust growth profile

Gold production, Koz of GE1

Source: Company information (1) GE at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios.

Share of gold in production1

5

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SLIDE 7

145 140 175 160 180 180 47 50 50 50 50 50 32 120 145 80

224 310 370 290 230 230

2015A 2016E 2017E 2018E 2019E 2020E

Kyzyl and POX expansion Exploration Stay-in-business CapEx

Capital expenditures, US$M

Our business model is capital-light

6

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SLIDE 8

4.8 4.0 3.6 2.9 2.4 2.3 1.9 1.8 1.5 1.5 1.4 1.4 1.3 1.2 1.2 1.1 1.1 1.0 0.9 0.9 0.8 Acacia Polymetal Randgold Gold Fields Agnico Eagle Centerra Pan American Goldcorp Barrick Eldorado Anglogold Fresnillo Iamgold Newcrest Newmont Centamin New Gold Yamana Buenaventura Tahoe Kinross

We have high-grade reserves

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

Source: Company data. Gold, silver, copper proved and probable reserves as of 01.01.2016 with further updates for Komar GE at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios. 7

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SLIDE 9

1,099 1,023 992 972 941 936 911 887 885 885 868 852 833 798 779 770 754

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

We have low costs

All-in sustaining cash costs for 1H 2016, US$/oz of GE

Source: Companies data on a co-product basis. Excluded: Buenaventura, Frensnillo, Tahoe, Centamin, due to AISC reported on by-product basis * Pan American Silver: based on 77 Ag/Au ratio Randgold: BMO estimate of 2016E AISC

US$ 1,221/oz – average LBMA gold price for the period

* *

8

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SLIDE 10

We generate free cash flow

Free сash flow, US$m

129 148 306 263 250 2012 2013 2014 2015 2016E 1,669 1,410 1,266 1,160 1,250 Gold price, US$/oz

*Source: Free cash flow (pre-M&A) 9

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SLIDE 11

And we pay dividends

0.20 0.32 0.16 0.21 0.22 0.50 0.20 0.30 0.15 0.70 0.32 0.36 0.51 0.37 2012 2013 2014 2015 2016 Special at the discretion of the Board Regular at 30% of underlying net earnings

> LTM yield of 3.3% > Average 5-year yield of 4%

1) Based on dividends paid and average stock price for the LTM ending 26 January 2017 (US$ 11.40/share) 2) Based on dividends paid and average 5-year stock price ending 26 January 2017

Dividends, US$ per share

10 (2) (1)

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SLIDE 12

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

> Large: 7.3 Moz of gold reserves, of which 2.8 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 > Long LOM: 22 years (first 10 years open pit) > Low capital intensity: US$320M CapEx (open pit + flotation)

11

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SLIDE 13

450 330 365 250 600 156 112 350 330 216 485 600 200 107 313 160 406 5 10 15 20 25 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Eleonore, Goldcorp

Kyzyl’s attraction is its low capital intensity

Effective Life of Mine (Years)

San Julian, Fresnillo Kyzyl, Polymetal Blackwater, New Gold Rainy River, New Gold Merian, Newmont Meliadine, Agnico Eagle

Notes: Size of a ball shows the projects’ expected annual production (koz GE).

Project Capex / Annual Production (’000 US$/oz)

Annual Production, koz

PROJECTS CAPITAL INTENSITY (’000 US$/oz)

Cerro Negro, Goldcorp Otjikoto,B2 Inmaculada, Hochschild Copler Sulfides, Alacer Media Luna, Torex Guyana Goldfields Hope Bay, TMAC New Liberty, Aureus Brucejack, Pretium Kibali, Rangold

12

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Amursk POX Expansion Project: operating synergies with Kyzyl

> 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

13

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SLIDE 15

Concentrate offtake

Concentrate

  • fftake and

transportation ~ US$ 450-500 per tonne of concentrate Gold payable in concentrate ~ 90%

In-house processing

POX processing and transportation ~ US$ 225-250 per tonne

  • f concentrate

Gold POX recovery ~ 95%

Kyzyl concentrate processing: POX vs Offtake

14

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SLIDE 16

Kyzyl project updated economics

Scenario with 100% concentrate

  • fftake

Scenario with 50% of gold produced at the POX plant Gold price, US$/oz 1200 1200 Gold produced, Koz 5.9 Moz 6.1 Moz Total cash cost, US$/oz 536 488 AISC, US$/oz 568 518 CapEx, US$M 320 375 NPV, US$M (10% WACC) 665 750 IRR 32% 33%

15

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SLIDE 17

Basic engineering Permitting Detailed engineering Contracting Construction Open pit Processing plant Infrastructure 100 % 100 % 100% 100 % 85 % 100 % 100% 100 % 35 % 100 % 100 % 90 % 95 % 90 % 80 %

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Kyzyl project stages completion

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SLIDE 18

Kyzyl processing plant

Completion, % Completion deadline Design and construction of rooftop and fence 100 % December 2016 Filling of openings (windows, doors) 80 % May 2017

17

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SLIDE 19

Kyzyl open pit

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SLIDE 20

Komar - a natural close fit for our Varvara hub in Kazakhstan

> Open pit is now operating at 100% of its planned capacity and in 2017 should deliver up to 1.2 Mt of higher-grade ore to the Varvara plant > This is expected to drive a strong jump in production at Varvara in 2017 (by approx. 70 Koz) at lower cash costs.

*Ore reserve and mineral resource estimates prepared by Polymetal Engineering as at 01.07.2016 using US$1,100/oz gold price.

Legend

Topographic surface profile – mining operations status as of 15.09.2016 Design pit profile at Severniy area along section line Combined ore bodies projection on vertical plane along section line Exploration core holes

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Medium-size

  • perating gold

asset

˃ JORC reserves 0.9 Moz of gold at 2.0 g/t ˃ JORC resources: 0.7 Moz of gold at 2.2 g/t

Close fit for Varvara hub

˃ Open pit, simple and well-understood metallurgy (CIL) ˃ Direct rail link to Varvara plant (187km)

Excellent exploration upside

˃ Resources are estimated only to the depth of 280m, while mineralisation is traced to the depth of 450m

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SLIDE 21

Kapan – our first operating asset in Armenia

Kapan key facts

> Fully mechanised underground mine with current capacity of approximately 400 ktpa > Conventional flotation concentrator and various infrastructure facilities > Synergy with our Lichkvaz deposit through the processing hub approach, utilising excess capacity at the Kapan concentrator

Next steps

> De-bottleneck underground mine and improve concentrator utilisation:

  • 650 ktpa by 2H 2017
  • 900 ktpa by 2H 2018 (including feed from

Lichkvaz) > Streamline the cost structure, leveraging Polymetal’s experience in mechanised narrow-vein underground mining in the FSU > Undertake significant additional drilling in 2016 to produce a JORC-compliant ore reserve estimate and a combined LOM for Kapan and Lichkvaz in Q3 2017

Asset Standard Category Ore Grade Content Mt Au, g/t Ag, g/t Cu,% GE/ g/t GE, Moz Kapan* NI 43-101 Indicated 4.5 2.90 50 0.49 5.1 0.7 Inferred 11.4 2.55 47 0.50 4.6 1.7 Lichkvaz JORC Indicated+ Inferred 4.3 3.4 15.1 0.37 4.2 0.6

Mineral Resources (Indicated + Inferred)

*Reported as at 31.12.2014 at a gold equivalent cut-off grade of 2.24 g/t. Au Equiv = Au+(Cux1.2) + (Agx0.02)+(Znx0.34) 20

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SLIDE 22

Nezhda – JV with Polyus Gold

4th largest gold deposit in Russia

> Polymetal is earning 50% by spending US$ 90 million on development > Substantial high-grade resources: 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 Q2 2017 and development decision in Q1 2018

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Stage I (20,068 linear meters) Stage II (higher Ag grades, 6,710 linear meters) Stage III ( 14,580 linear meters)

5 000 m 1 000 m

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SLIDE 23

Viksha - our first PGM asset

˃ 20-year mining licence granted on July 18, 2016 for a project area of 47km2 ˃ JORC-compliant Mineral Resources containing precious metals > 6 Moz ˃ Favourable mineralogy and uncontaminated ore (no nickel): conventional flotation processing to produce bulk copper-PGM sulphide concentrate for further processing through PGM refineries or copper smelters with a PGM circuit ˃ Favourable geological conditions: near-surface mineralisation with contiguous ore bodies of considerable width, amenable to low-cost mechanised bulk open-pit mining ˃ Located in a well developed region with excellent infrastructure and qualified workforce ˃ 166 diamond drill holes totalling 22,145 metres were completed between 2012-

  • 2014. The mining licence was granted on July 18, 2016

˃ First mineral resource statement (JORC code 2012) carried out by AMC consultants, issued on September 16, 2016 ˃ Polymetal intends to complete a feasibility study for an Ore Reserve estimate by Q3 2019. If results are positive, the asset can enter production in 2022

One of the largest open pittable PGM resources in the world Project timeline

Mineral Resources (Indicated + Inferred)*

Note: *All figures have been rounded; summations within the tables might not agree due to rounding.

Zone Category Tonnes Grade Content Reef width Mt Pd, g/t Pt, g/t Au, g/t Cu, % 3E,g/t 3E, Moz Cm Viksha Indicated 27 0.6 0.2 0.1 0.10 0.9 0.7 700 Inferred 52 0.6 0.2 0.1 0.09 0.9 1.5 700 Kenti Inferred 98 0.6 0.2 0.1 0.11 0.9 2.9 700 Shargi Inferred 36 0.6 0.2 0.1 0.08 0.9 1.0 700 Total Indicated+ Inferred 213 0.6 0.2 0.1 0.10 0.9 6.5 700

22

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SLIDE 24

23

Prognoz – the largest undeveloped primary silver deposit in Russia

* estimated by Micon in 2009 ** 45% is owned by Polar Silver Resource Ltd and the remaining 50% is owned by a group of private investors

Very large high-grade resource base ˃ 292 Moz at 586 g/t* silver, 3% lead (JORC- compliant)* Excellent exploration upside ˃ Additional mineral potential: 7.9 - 18.1 Mt of

  • re at 469 g/t silver for 119 – 273 Moz of

silver contained* Potentially low capital intensity ˃ Based on open-pit mining and conventional processing Flexible transaction structure preserving strategic optionality ˃ Undertake drilling to de-risk the asset before making a sizable investment decision

  • Polymetal currently holds 5% (acquired

for US$3M) and has an option to increase stake to 50%**

  • Investment decision will be made no

later than Q1 2020 after completion of technical study and reserve estimate in Q1 2019

  • US$10M per annum is expected to be

invested in exploration between 2017- 2019

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SLIDE 25

We provide competitive shareholder returns

Total shareholder returns (%) from January 1, 2014

Source: Bloomberg (as at market close 25 January 2017) 24

  • 40%
  • 20%

0% 20% 40% 60% 80% 100% 120%

Polymetal Randgold Fresnillo FTSE 350 FTSE Gold Mines Gold

Total for period: FRES: 47% POLY: 40% RRS: 32% FTSEGM: 17% Gold: -2% FTSE350: -8%

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SLIDE 26

Polymetal continues to provide both valuation upside and meaningful current income

68.6x 58.6x 49.0x 47.0x 41.9x 34.7x 29.1x 28.4x 26.9x 24.7x 22.4x 21.2x 17.5x 14.3x 13.7x 11.6x 9.4x 9.4x 9.2x 5.1x

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

2017E P/E

Source: Bloomberg (Dividend yield calculated in US dollars as of 31.12.2016 (based on declaration date), NTM P/E updated on 24.01.2017) Polymetal DY based on average stock price for the LTM ending 31 Decmber 2016 (US$ 11.40/share) 25

3.3% 2.5% 2.1% 1.9% 1.6% 0.9% 0.9% 0.8% 0.7% 0.7% 0.7% 0.5% 0.5% 0.5% 0.4% 0.3% 0.3% 0.0% 0.0% 0.0% 0.0%

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

2016

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SLIDE 27

Appendix

26

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SLIDE 28

Outlook

FY2016 FY 2017 Production, GE Koz 1,268 1,400 Total cash cost, US$/GE oz 525-575 600-650 All-in sustaining cash cost, US$/GE oz 700-750 775-825 Capital expenditure, US$M 310 (E) 370 Free cash flow ~250 (E) Meaningfully positive Regular dividend Definitely Definitely Special dividend Likely

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SLIDE 29

1H 2016 1H 2015 Change, % (1) FY 2015 Revenue, US$M 593 648

  • 8%

1,441 Adjusted EBITDA, US$M 294 297

  • 1%

658 Adjusted EBITDA margin 50% 46% +4bps 46% Total cash cost (TCC), US$/GE oz 514 552

  • 7%

538 All-in sustaining cash cost (AISC), US$/GE oz 754 786

  • 4%

733 Net earnings/ (loss) for the period, US$M 164 98 +67% 221 Underlying net earnings, US$M 124 117 +6% 291 Underlying EPS, US$/share 0.29 0.28 +4% 0.70 Dividend declared during the period, US$/share (2) 0.13 0.13 0% 0.51 Dividend declared for the period, US$/share 0.09 0.08 +12.5% 0.51 Net operating cash flow, US$M 65 175

  • 63%

490 Capital expenditure, US$M 117 86 +35% 205 Free cash flow (pre M&A), US$M (3) (53) 77 NM 263 31-Dec-16 31-Dec-15 Net debt, US$M 1,329 1,298 +2% Net debt/Adjusted EBITDA N/A 1.97 +11%

Financial highlights

Source: Company data, IFRS accounts Notes: (1) % changes can be different from zero even when absolute amounts are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. (2) 1H 2016: final dividend for FY 2015 paid in May 2016. FY2015: final dividend for FY 2014 declared in March 2015, interim dividend for the 1H 2015 declared in August 2015, and special dividend declared in December 2015. (3) Net cash generated by operating activities less capital expenditures

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Shareholder structure and Board of Directors

ICT Group (Alexander Nesis) 27% PPF Group (Peter Kellner) 13% Management & Directors 1% Institutions and retail 40% High Net Worth Individuals 19%

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 INED Non-independent Konstantin Yanakov Represents ICT Group Ltd ex-CFO of Polymetal Marina Gronberg Represents Vitalbond Ltd and Lynwood Capital Management Fund Ltd Jean-Pascal Duvieusart Represents PPF Group ex-Managing Partner at McKinsey Vitaly Nesis Group CEO Bobby Godsell Chair Chairman of Business Leadership South Africa, ex-CEO of AngloGold Ashanti Chair of the Nomination Committee

As of December 02, 2016

Free Float 59%

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SLIDE 31

2.8 1.5 2.4 1.6 0.8 1.0 2.5 7.3 1.9 21.7 0.6 0.4 1.0 4.1 0.0 0.6 2.8 3.1 3.0 0.8 16.5 Dukat Omolon Albazino Mayskoye Okhotsk Voro Varvara Kyzyl Kapan Other Total

Reserves Resources

Source: Reserve and resource statement (JORC 2012) as at 01.01.2016 with further additions as a result of exploration or M&A. Gold and silver price assumptions of $1,100/oz and $15/oz respectively, in both reserve and resource estimates in 2015. (1) Inluding Komar (2) Including Olcha (3) Includes Kapan and Lichkvaz mines in Armenia (4) Includes Maminskoye, Kutyn, Veduga

GE Moz

5.5 15.8 3.8 12.7 5.1 5.4 8.4 9.9 3.6 7.7 2.7 4.1 1.5 1.9 6.8 4.0 4.5 Resource grade

GE g/t

Reserve grade

3

3.4 1.9 3.5 5.7 0.9 1.6 5.2 2.7 38.3

Reserves and resources

2024 2023 2030 2023 2024 2026 2030

LOM

Reserve mine life 7.7 2038 3.4 2.7

10.4

Under conservative price assumptions of US$1,100/oz for gold and US$15/oz for silver

3.0

4.7

4

N/A N/A

30

2 1

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SLIDE 32

6.9 545 340 867 600 502 775 N/A 552 5.8 624 301 909 610 468 740 1,186 514

200 400 600 800 1000 1200

Dukat Okhotsk

  • perations

Voro Varvara Omolon Albazino Mayskoye Armenia Total - Polymetal

1H 2015 1H 2016

Year-on-year cash cost dynamics

Total cash cost, US$/oz of GE (1)

Source: Company data (1) Co-product total cash cost: cost of sales + on-mine part of SG&A – deprecation and amortization . GE (gold equivalent) based on actual realized gold, silver and copper prices (2) Silver equivalent based on average realised prices

US$ 1,225/oz – average realised gold price in 1H 2016

(2)

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SLIDE 33

8.4 598 387 1167 851 698 786 7.2 750 396 1113 895 649 754

200 400 600 800 1000 1200 1400 1600 1800 2000

Dukat Okhotsk

  • perations

Voro Varvara Omolon Albazino Mayskoye Armenia Total - Polymetal

1H 2015 1H 2016

Year-on-year AISC dynamics

All-in sustaining cash costs, US$/oz of GE (1)

Source: Company data (1) All-in sustaining cash costs comprise total cash costs, all selling, general and administrative expenses for operating mines and head office not included in TCC, other expenses and current period capex for operating mines but including all exploration expenditure and minor brownfield expansions. GE (gold equivalent) based on actual realized gold, silver and copper prices (2) Silver equivalent based on average realised pricesa (3) At Mayskoye, AISC are not representative for the 1H of the year as the vast majority of sales is scheduled for the second half of the year due to seasonal navigation, while most of the general and administrative costs and sustaining capital expenditure are spread evenly over the year.

US$ 1,225/oz – average realized gold price in 1H 2016

NR

(3)

NR

(3) (2)

NR N/A

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SLIDE 34

Liquidity profile

> Net debt of US$1.3bn, a ~2% increase as compared to 31 Dec 2015, with US$ 100m paid for Komar acquisition and US$158m of dividends > Average interest rate remains unchanged around 4% > Liquidity position is robust: > US$1bn of undrawn facility agreements and > US$49M cash Financing considerations: > Short-term refinancing risk is now fully eliminated. > US$ 400M Sberbank loan maturing in November 2018 is planned to be rolled-over/ refinanced in 2017

  • 200

400 600 800 2017 2018 2019 2020

Debt repayment profile, US$M

Notes: Data as of 01 December 2016 33