PRESENTATION February, 2019 POLYMETAL INTERNATIONAL PLC INVESTOR - - PowerPoint PPT Presentation
INVESTOR PRESENTATION February, 2019 POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 2 POLYMETAL TODAY 2 nd 9 1 FTSE 250 POX FACILITY MSCI RUSSIA 3 MAJOR DEVELOPMENT OPERATIONS ACROSS LARGEST GOLD 2 COUNTRIES PRODUCER IN RUSSIA
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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OPERATIONS ACROSS 2 COUNTRIES
LARGEST GOLD PRODUCER IN RUSSIA
POX FACILITY MAJOR DEVELOPMENT PROJECTS
CONSTITUENT
Competence center
Development Processing
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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Russia and FSU Focus on gold, silver and possibly other base metals Medium-sized high-grade deposits Vertical integration ESG best practice Regular dividend is shareholder’s right, comes before growth spending Target Net Debt/EBITDA of less than 1.5x CAPEX hurdle rate - 12% real unlevered Significant sustainable dividend Meaningful growth Stable licence to operate Robust balance sheet Reduction of environmental footprint SCOPE OF ACTIVITY CAPITAL ALLOCATION PRINCIPLES DESIRED OUTCOME
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 4
885 1090 1190 1220 1260 1400 1550 952 1168 1312 1267 1269 1433 1562
2012 2013 2014 2015 2016 2017
Notes: *Historical gold equivalent guidance recalculated using 80:1 Ag oz/Au oz, 1:5 Cu mt/Au oz and 1:2 Zn mt/Au oz conversion ratios.
+8% +7% +10% +4% +1% +2%
Guidance Actual 2018
+1%
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 5
1466 1250 1270 1240 1230 1260 96 300 330 330 340 330 30 180 180 80**
2018 2019 2020 2021 2022 2023 GOLD PRODUCTION, GE Koz1 1562 1550 1600 1600 1750 1850 PRODUCTION UPSIDE:
Notes: 1) Gold equivalent (GE) at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios * Excludes Okhotsk (sold in December 2019) and Kapan (sold in January 2019) starting from 2019 ** Includes recovery improvement and long-term 3rd party contracts
POX-2 Nezhda Kyzyl Existing assets*
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 6
AVERAGE RESERVE GRADE (2P RESERVES), g/t of GE
Source: Company data. Gold, silver, copper proved and probable reserves as at 01.01.2018.
4.1 3.9 2.6 2.6 2.0 1.8 1.8 1.8 1.7 1.5 1.4 1.3 1.3 1.2 1.2 1.0 1.0 0.9 0.7 0.7
Acacia Polymetal Goldfields Agnico Eagle Pan American Eldorado Polyus Barrick Gold Newcrest Goldcorp B2 Gold Anglogold Newmont Fresnillo IAMGOLD Centamin Petropavlovsk Yamana Centerra Kinross
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 7
5-YEAR AVERAGE FCF YIELD, % 10.8 8.0 8.0 7.2 5.9 5.9 5.5 5.2 3.8 3.0 3.0 2.8 2.2 1.0 0.0 (0.1) (0.5) (1.5) (4.3) (6.8) (8.6) (13.0) (13.7)
Centerra Centamin Polymetal Anglogold Newcrest FTSE 250 FTSE 350 Newmont Gold Fields Barrick Gold Polyus Kinross FTSE GM Agnico Eagle Fresnillo Pan American Yamana Goldcorp Acacia Iamgold B2Gold Petropavlovsk Eldorado
Source: Company and RBC data (as at market close 17.01.2019). Polyus yield shown based on data since their relisting on LSE, reported FCF values were adjusted for interest payments which were relocated from financing cash flow to operating cash flow to align them with other companies’ FCF reported numbers
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 8
7.9 6.1 4.9 4.2 4.1 3.2 2.7 1.9 1.4 1.3 1.2 1.1 1.1 1.0 0.8 0.7 0.7 0.7 N/A N/A N/A N/A N/A
Centamin Polyus Polymetal Acacia FTSE 350 FTSE 250 Fresnillo Gold Fields Newcrest Eldorado FTSE GM Newmont Agnico Eagle Barrick Gold Pan American Yamana Anglogold Goldcorp Kinross B2Gold Centerra Iamgold Petropavlovsk
DY: 2018, % DY: 5-YEAR AVERAGE (SINCE JAN 2014), %
Source: Company and RBC data (as at market close 17.01.2019)
4.6 4.1 4.0 3.1 2.3 2.2 1.7 1.7 1.7 1.7 1.7 1.3 1.2 1.1 1.1 1.1 1.1 0.8 0.6 N/A N/A N/A N/A
Centamin FTSE 350 Polymetal FTSE 250 Centerra Pan American Acacia Kinross Goldcorp Yamana Fresnillo Gold Fields FTSE GM Barrick Gold Agnico Eagle Newmont Newcrest Anglogold Eldorado B2Gold Petropavlovsk Polyus Iamgold
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 9
Source: Company data and Bloomberg.
DIVIDENDS PER GOLD EQUIVALENT PRODUCED FOR 5-YEAR PERIOD, $/oz 167 126 114 80 68 64 55 54 36 33 32 22 18 17 17 7 4
Centamin Polymetal Polyus Goldcorp Yamana Pan American Centerra Agnico Eagle Newmont Fresnillo Barrick Gold Acacia Newcrest Eldorado Gold Fields Kinross Anglogold Iamgold B2 Gold Petropavlovsk
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 10
AVERAGE LIFE OF MINE, YEARS 13 16
2017 Proforma with Nezhda*
NEZHDA EFFECT:
POLYMETAL LOM, YEARS
Notes: P+P reserves as of 01.01.2018 divided by 2017 depletion. * Proforma for Nezhda, without Kapan and Okhotsk
39 27 24 22 17 16 16 15 14 13 12 12 12 12 11 10 9 9 9
Newcrest Goldcorp Goldfields Polyus Centerra Petropavlovs k Centamin Barrick IAMGOLD Polymetal Agnico Eagle Anglogold Yamana Newmont Eldorado Pan American B2 Gold Fresnillo Acacia
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 11
Asset TCC Value, $m 50% in Dolinnoye Sold in Q2 2018 17 Kapan Sold in January 2019 55 Svetlobor Sold in Q4 2018 6 Okhotsk Sold in Q4 2018 30 Asset TCC Value, $m Lichkvaz Under 6-month RoFR from buyer of Kapan Sale expected in Q4 2019 ~10 74% in Veduga Ownership streamlined, sale process to re-commence in Q1 2019 ~100 Maminskoye Non-core, options evaluated Uncertain Kutyn Non-core, options evaluated Uncertain
BY 2020 AMBITIOUSLY TARGETING DEALS FOR ANOTHER
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 12
Stable low-cost production for > 22 years Very large reserve base - 7.3 Moz of gold at 7.7 g/t Excellent exploration potential - 3.1 Moz of additional resources at 6.8 g/t 20% IRR at $1,200/oz gold price 3.1 Moz of open-pit reserves at 6.8 g/t 300-330 Koz pa at $500-550/oz AISC Excellent potential to extend open-pit LOM
FIRST 10 YEARS OF OPEN-PIT
Semey Bakyrchik KYZYL Oskemen Bolshevik
Russia Russia Kazakhstan
Ridder Kalbatau Ayagoz
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3.1 4.0 4.1 7.3 +0.5 +0.4 +1.0 +2.0 +0.2
7.2 11.3
FS (incl. actual as at july 01, 2018) Resource conversion (East Bakyrchik) Resource conversion (Deeps) In-fill drilling Target
ORE RESERVES, Moz of gold Underground Open-pit
YEARS OF UNDER- GROUND MINING
YEARS OF OPEN-PIT MINING
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BOILER HOUSE ORE CRUSHER CRUSHED ORE STORAGE PROCESSING PLANT SURFACE DRAINAGE POND PUMP STATION WATER RESERVOIR ADMINISTRATIVE BUILDING MAINTENANCE SHOP CONCENTRATE STORAGE
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
74 102 135 124 162 147 169 162
JUN JUL AUG SEPT OCT NOV DEC JAN
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ORE PROCESSED, kt AU RECOVERY, % ORE GRADE, g/t GOLD IN CONCENTRATE, Koz
42 71 78 84 86 86 87 87
JUN JUL AUG SEPT OCT NOV DEC JAN
2.6 4.1 5.3 5.8 6.3 6.5 6.8 6.7
JUN JUL AUG SEPT OCT NOV DEC JAN
2 9 17 20 28 27 … 30
JUN JUL AUG SEPT OCT NOV DEC JAN JUN JUL AUG SEPT OCT NOV DEC JAN JUN JUL AUG SEPT OCT NOV DEC JAN JUN JUL AUG SEPT OCT NOV DEC JAN JUN JUL AUG SEPT OCT NOV DEC JAN
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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2018 Guidance 2018 Outlook 2019 Guidance Production, Koz of GE 1550 Above guidance, 1562 1550 TCC, $/oz of GE 650-700 On track, lower end Down to 600-650 AISC, $/oz of GE 875-925 On track, lower end Down to 800-850 Capital expenditure, $m 400 Below guidance 380 Free cash flow Positive On track Positive Regular dividend 50% of underlying net income On track 50% of underlying net income Assumptions 2018 Budget 2018 Actual 2019 Budget Gold, $/oz 1200 1271 1200 Silver, $/oz 16.0 15.7 15.0 RUR/USD rate 60 63 65 Oil 60 68 70
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 17
PRO FORMA AISC IMPROVEMENT, $/oz
2018E w/ Kyzyl AISC at $529/oz
mines 2019 Guidance
875 825
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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180 194 200 200 220 240 95 30 85 100 64 30 83 83 133 101 31 30 15 20 20 20 20
2018 2019 2020 2021 2022 2023 CAPEX, $m 365 377 403 417 341 291 Long-term projects1 POX-2 Nezhda Kyzyl/POX-1 Stay-in-business
Notes: 1) Prognoz, Viksha, greenfield exploration
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 19
Net Debt/Adjusted EBITDA is expected at ~1.9x* as at year end well below hard ceiling of 3.25x (banks) and 2.5x (regular dividends) Robust liquidity profile: $1.3 bn of undrawn credit facilities Net debt of $1.5 bn as of 31 Dec Strong cash position of $383 m Low cost of debt at 4.2% with 100% of loans on bilateral basis and denominated in US dollars MATURITY PROFILE, $m INTEREST RATE BREAKDOWN (long-term loans only) 117 264 500 447 469 104 2019 2020 2021 2022 2023 2024 Fixed 49% Floating 51%
Notes: *As at 30.09.2018
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
First and only Russian member
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RECOGNITION OF OUR EFFORTS TO DATE 5/5 in Corporate Governance 5/5 for Anti-Corruption 5/5 in Risk Management & Labor Standards 94th Percentile 4.4/5.0 total ESG score ESG rating BBB Leader in M&M 1st among 47 mining companies 100 percentile First sustainability-linked loan in CIS STAFF TURNOVER
LTIFR (1 FATALITY IN 2018) FEMALE QUALIFIED PERSONNEL
EMPLOYEES $10m COMMUNITY INVESTMENTS MAJOR ENVIRON- MENTAL INCIDENTS
2018 highlights:
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
8 3 11 12 15 0.4 0.3 0.6 1.4 3.2
2014 2015 2016 2017 2018
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SHARES OUTSTANDING 469 MILLION
FREE FLOAT Institutional investors and HNWI* 54% Otkritie 7% PPF Petr Kellner 12% ICT Group Alexander Nesis 27% Management & Directors 1% ADTV, $m
Notes: Shareholder structure data as of 30 January 2019
MOEX LSE
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INDEPENDENT DIRECTORS NON-INDEPENDENT DIRECTORS CHAIR
BOBBY GODSELL Chair Chairman of Business Leadership SA ex-CEO of AngloGold Ashanti OLLIE OLIVEIRA SINED Chair of the Nomination Committee, Chairman of Audit Committee at Antofagasta plc JONATHAN BEST INED Chair of the Audit and Risk Committee ex-CFO of AngloGold Ashanti TRACEY KERR INED Chair of the Safety & Sustainability Committee, Group Head of Safety and Sustainable Department in Anglo American plc GIACOMO BAIZINI INED General Manager and ex-CFO of EVRAZ Group S.A. CHRISTINE COIGNARD INED Chair of the Remuneration Committee ex-MD HCF International Advisors VITALY NESIS Group CEO KONSTANTIN YANAKOV ICT Group Ltd ex-CFO of Polymetal JEAN-PASCAL DUVIEUSART PPF Group ex-Managing Partner at McKinsey
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 24
Large: 4.4 Moz of gold at 3.6 g/t, 70%
Long life: 25 years LOM, 155 Koz pa Excellent exploration potential: 8.1 Moz at 5.1 g/t Low-cost: $620-670/oz TCC and $700-750/oz AISC during first 19 years of open pit Capital-light: $234 million start-up capex Conventional technology: flotation followed by POX/offtake
ORE RESERVE ESTIMATE AS AT 1 APRIL 2018 Ore Reserves Tonnage, Mt Grade, GE, g/t Content, GE, Moz Proved+Probable 38.0 3.6 4.4 Open Pit 28.1 3.5 3.1 Underground 9.9 4.0 1.3
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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Russia
Topolinoe Magadan
Road junction 120 km
Tommot Nizhniy Bestiakh Khandyga Yakutsk Okhotsk
Sea of Okhotsk
Prognoz Svetloye
Yakutia
Dukat Nezhda
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KEY INPUTS Start-up capex $234m Exchange rate 63 RUB/USD Throughput, ore 1.8 Mtpa Gold recovery to concentrate 85% Gold payable in concentrate sold 90% Annual gold production 155 Koz (180 Koz during first 3 years) FEASIBILITY STUDY HIGHLIGHTS $302m NPV
IRR Gold price $1,000 $1,200 $1,400 10% WACC 103 302 498 NPV SENSITIVITY, $m
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1 RUB/USD change: $8/oz of TCC and $1.2m of EBITDA $1/bbl oil price change: $2/oz of TCC and $0.4m of EBITDA $10/mt change in Treatment Charge for con off-take: $5/oz of TCC and $0.8m of EBITDA $/oz of GE TCC AISC Open pit $620-670/oz $700-750/oz Life of mine $700-750/oz $800-850/oz $700–750/oz TCC FX STRUCTURE Ore transportation 1% Processing 28% Overheads 4% Offtake charges 14% Mining 34% Concentrate transportation 10% Royalty 8% RUB 68% USD 32%
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 28
Q4 2018 Q1 2019 Q3 2019 Q2 2020 Q4 2020 Q3 2021 Q4 2021 Q2 2022 Start of mining activities Start of construction First ore mined Processing plant building completed Start of equipment installation Mechanical completion Commissioning and first production Full ramp-up
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KEY FACTS Ownership: 100% JORC resources*: 252 Moz at 789 g/t Ag eq 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: ~$250m (100%) Next steps: Initial Ore Reserve estimate by end of 2019
Notes: * Estimated by Polymetal, audited by SRK consulting in 2018
Topolinoe
Magadan Road junction 120 km
Tommot Nizhniy Bestiakh Khandyga
Yakutsk Okhotsk Sea of Okhotsk
Nezhda
Svetloye
Yakutia
Prognoz
Dukat
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 30
20-year mining licence granted on July 18, 2016 for a project area of 47km2 Mineral Resources: 213 Mt at 0.98 g/t of combined precious metals, total content at 6.6 Moz Processing: conventional flotation processing to produce bulk copper-PGM sulphide concentrate + off-take Average thickness: 7 m Depth of open pit: 150 m
CONSISTENT GRAM-METER DOWN DIP (Pd eq.* ore body width)
KEY FACTS
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 31
24.9
13.2 7.3 4.4 30.8 10.3 3.1 8.1 3.7 5.6 LEGACY ASSETS KYZYL NEZHDA PROGNOZ VIKSHA Reserves Resources PRODUCTION START 2018 2021 2024 2024 23.4 10.4 12.5 3.7 5.6 55.6 TOTAL
Notes: Reserve and resource statement (JORC 2012) as at 01.01.2018 including updates for Nezhda and Mayskoye. Gold and silver price assumptions of US$ 1,200/oz and US$ 16/oz respectively. PE = palladium equivalent, GE = gold equivalent
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
0.20 0.32 0.16 0.21 0.22 0.32 0.47 0.50 0.20 0.30 0.15
0.70 0.32 0.36 0.51 0.37 0.32 0.47
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DIVIDENDS, $ PER SHARE LTM YIELD OF:
Special at the discretion
Regular (50% of underlying net income starting FY2017, before that – 30%) 2012 2013 2014 2015 2016 2017 2018
Notes: 1) Based on dividends paid (including 1H 2018 interim dividend paid in September 2018)
$1,254 MILLION PAID OUT SINCE IPO AVERAGE 5-YEAR YIELD OF
1 1
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 34
Over 2018, the Russian Rouble depreciated 17% y-o-y from 57.6 RUB/USD to 69.8 RUB/USD as at 31 December 2018 Average rate in 2018 was 62.9 RUB/USD Actual rate - 65.6 RUB/USD CASH COST STRUCTURE (2019E), $/oz RUB/ Tenge Labor 20% Oil Fuel 15% RUB / Tenge Services 30% $ / Au Royalty 9% $ / RUB / Tenge Non-fuel consumables 22% RUB / Tenge Grid power 4% RUB 50% A 1 RUB movement in domestic currency will have: $5-6/oz effect on TCC $8-10m impact on EBITDA $10-11m effect on FCF (assuming 60% of capex is in foreign currencies) US$ 20% Oil 15% Tenge 15%
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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322 269 124 202 120 130 106 111 50 1433 306 308 117 195 107 142 136 104 51 96 1562
Dukat Albazino Mayskoye Omolon Voro Varvara
+15%
2017 2018
Svetloye
+3%
Kyzyl Total Kapan Omolon
+9% +28% +9%
Full-year production of 1.56 Moz of gold equivalent (GE) exceeded the original guidance for the seventh year in a row This was largely driven by the successful execution of Kyzyl and the POX debottleneck which have already translated into significant production and free cash flow generation GE PRODUCTION, KOZ
+100%
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location Magadan Region, Russia Life of mine 2027* (9 years) Mining Underground (100%) Processing 2.0 Mtpa concentrator and 450 Ktpa CIP and Merrill Crowe plant Product Silver in concentrate (75%) and Dore bars (25%) Strategy Maintain high production volumes in mid term while continuing to invest in near mine exploration (Perevalnoye, Primorskoye). Advance Prognoz silver project which is expected to replace Dukat as one of the top 3 primary silver mines of the world.
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
393 369 322 306
2015 2016 2017 2018
Notes: * Assuming reasonable resource-to-reserve conversion
Grade, g/t
6.4 5.6 4.7 4.5 Omsukchan Primorskoye Perevalnoye Terem Arylakh LUNNOYE DUKAT Dukat Goltsovoye
Exploration
Sea of Okhotsk
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location Khabarovsk Territory, Russia Life of mine 2031 (13 years) Mining Open pit (70%) / Underground (30%) Processing 1.6 Mtpa flotation circuit followed by pressure
Product Gold Strategy Maintain high production volumes longer term while increasing underground mine productivity and adding more 3rd party concentrate to the feed at an expanded Amursk POX plant.
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
220 244 269 308
2015 2016 2017 2018 Grade, g/t
5.2 5.0 4.9 5.3 Amursk AMURSK POX Komsomolsk-on-Amur Oglongi Kherpuchi Nikolaevsk-on-Amur ALBAZINO
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location Chukotka, Russia Life of mine 2034* (16 years) Mining Underground (75%) / Open pit (25%) Processing 850 Ktpa flotation concentrator/CIL Product Gold concentrate, activated carbon Strategy Production volumes are expected to improve by 10-15-% in 2019 (thanks to introduction of higher grade oxide ore and commissioning of a combined float-leach circuit) and will remain stable in mid term. Oxide ore treatment will re-commence in Q2 2019.
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
138 116 124 117
2015 2016 2017 2018
Notes: * Assuming reasonable resource-to-reserve conversion
Grade, g/t
6.7 5.3 5.9 7.1 Pevek Mayskoye AMURSK POX Nakhodka
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
188 170 202 195
2015 2016 2017 2018
7.5 7.0 7.8 6.9
Location Magadan region, Russia Life of mine 2027* (9 years) Mining Open pit (90%) / Underground (10%) Processing 850 Ktpa CIP/Merrill Crowe, 1000 Ktpa HL (Birkachan low-grade ore) Product Gold with by-product silver Strategy Complete initial reserves estimates at Irbychan and Yolochka in Q1 2019. Mining at Yolochka to start in Q2. Production will remain stable in mid-term
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
Notes: * Assuming reasonable resource-to-reserve conversion ** Average grade in ore processed at the Kubaka CIP/MC plant
Grade, g/t**
Evensk OMOLON Sopka Dalnee Irbychan Yolochka Birkachan Olcha Burgali Nevenrekan Oroch Tsokol
Exploration
Sea of Okhotsk
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location North-western Kazakhstan Life of mine 2032 (14 years) Mining Open pit Processing 3.2 Mtpa CIL / 1.0 Mtpa flotation circuit Product Gold dore bars, Gold-copper concentrate Strategy Process more Komar higher-margin ore
haulage cost with commissioning main-line locomotive for railing Komar ore in Q1 2019
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
72 85 130 142
2015 2016 2017 2018 Grade, g/t
0.9 1.1 1.6 1.7 Kotanay Komar VARVARA Tarutin Komar
Russia Kazakhstan
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location Sverdlovsk Region, Russia Life of mine 2028 CIP (10 years) Mining Open pit Processing 950 Ktpa CIP Product Gold Strategy Addition of a flotation circuit to the existing CIP plant to allow processing
estimate for Saum project in Q1 2019 and start oxide ore mining in 2H 2020. Voro open pit is nearing depletion in Q3 2019
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
141 129 120 107
2015 2016 2017 2018 Grade, g/t
3.7 3.4 3.6 3.7 Ekaterinburg Nizhniy Tagil Serov Krasnoturyinsk VORO Saum Tamunyer Peshcherny
Exploration
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
Location Khabarovsk region, Russia Life of mine 2024 (6 years) Mining Open pit Processing 1400 Ktpa heap leaching plant Product Gold Strategy Maintain high production levels for the next years. Step-out drilling at the Emy pit and positive met test work for the material from the nearby Levoberezhny property indicate potential to extend the life-of-mine by ~4 years to 2028.
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2017 RESERVES JORC
2017 RESOURCES JORC PRODUCTION, GE Koz
23 106 135
2016 2017 2018 Grade, g/t
3.6 4.4 3.7
ORE STACKED, Kt
428 1,054 1,378
2016 2017 2018
Okhotsk Ulya Levoberezhny Svetloye
Exploration
Sea of Okhotsk
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 43
1953 Deposit discovery 1963–1997 1.7 Mt of ore mined from the underground and shipped to copper smelters 2003–2004 Roaster plant construction (negative results) 2014 Acquisition
25 June 2018 Successful launch ahead of schedule and on budget and in line with all design parameters 1956–1965 2.1 Mt of ore mined from Bakyrchik
1994 Construction
(negative results) 2010–2014 Multiple failed studies 2016 Start
2018 Completion of POX debottlenecking project
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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Gold price $1,100 $1,200 $1,300 Conservative case 16% 20% 24% Reasonable upside case 20% 23% 27% FULL-PROJECT IRR TOTAL INVESTMENT, $m Cash 319 Shares 300 Cash settlement of the put option 68 Deferred consideration buyout (paid in shares) 10 Acquisition price 697 CapEx 319 Working capital * 50 Other costs ** 45 Total Investment 1,111
Notes: * Normalised ** Expensed during construction
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 45
Full-cycle development and exploitation of remote assets Complex hydrometallurgy Refractory ore processing (POX) and marketing Selective mining Flexible processing (hubs) Near mine and greenfield exploration (reserve replacement)
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION
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
expectations about future events. These forward-looking statements include statements concerning plans,
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:
The forward-looking statements in this presentation are based upon various assumptions and predictions, many
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
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
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
agents, employees or advisors intend or have any duty
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
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
knowledge and experience of the Company's management in the market in which the Company
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
contained in this presentation. The information contained in this presentation has not been independently verified. Neither the Company, any
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 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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