INVESTOR PRESENTATION - Polymetal
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INVESTOR
PRESENTATION
May 2020
01 INTRODUCTION
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 3
POLYMETAL TODAY
Top-10 WORLD GOLD PRODUCER
2nd LARGEST GOLD PRODUCER IN RUSSIA
9 OPERATIONS ACROSS 2 COUNTRIES
FTSE 100 & MSCI CONSTITUENT
Competence center
Development
Operations
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 4
STRATEGY
CAPITAL ALLOCATION
SCOPE OF ACTIVITY DESIRED OUTCOMES
PRINCIPLES
Russia and FSU Regular dividend is Significant sustainable dividend
shareholder’s right,
Focus on gold, silver comes before growth Meaningful growth
and possibly other spending Reduction of environmental
base metals
Target Net Debt/EBITDA footprint
ESG best practice of below or equal to 1.5x Social license to operate
Medium-sized high- CAPEX hurdle rate - 12% Robust balance sheet
grade deposits real unlevered
Leadership in
refractory ore
processing
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 5
FOCUS ON GRADE
AVERAGE RESERVE GRADE (2P RESERVES), g/t of GE
5.6
3.7
3.2
2.9 2.8
2.4
1.9 1.8
1.5 1.5 1.4 1.4 1.3 1.2 1.2 1.1 1.0
0.7
Anglogold
Newmont
Centerra
Polyus*
Hochschild
Highland*
Gold Fields
Polymetal
Endeavour
Newcrest
Centamin*
Kinross
Barrick
B2Gold
Petropavlovsk*
Agnico Eagle
Pan American
Fresnillo
Source: Companies’ data for FY2019.
* 2018 data
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 6
FOCUS ON LOM
AVERAGE LIFE OF MINE AS OF 01.01.2020, YEARS
28 26
20
17 16 16 16 16
14 13 13 11 11 10
7 7 6
2
Centerra
Newmont
POG*
Anglogold
Agnico
American
Gold Fields
Polyus
Highland*
Centamin*
Barrick
Polymetal
B2Gold
Hochschild
Newcrest
Endeavour
Kinross
Fresnillo
Eagle
Pan
TARGET LOM IMPROVEMENT
+19 %
LOM increase will be driven by:
16 Reserve upside at Veduga and
Kyzyl
13
Initial reserve estimate at Prognoz
Reserve additions at Albazino, Voro,
and other operations
Notes: 2019A 2022E
P+P reserves as of 01.01.2020 divided by 2019 depletion.
* 2018 data
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 7
GROWING ASSET BASE
Ore Reserves as at 01.01.2020
25.2 Moz
+1.2 Moz / +5% y-o-y
2019 RESERVE PER SHARE, y-o-y change
75%
Agnico Eagle
Gold Fields
Hochschild
Endeavour
Centamin*
Highland*
Newcrest
29%
Centerra
Fresnillo
Kinross
Barrick
Polyus
7% 5% 1% 0.3%
-0.1% -3%
Newmont
Anglogold
Polymetal
B2Gold
Petropavlovsk*
Pan American
-3% -3% -5% -5% -6% -6% -11%
-17% -19%
-26%
Source: Companies’ data
* 2018 over 2017
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 8
SIGNIFICANT SUSTAINABLE DIVIDEND YIELD
50% 6.5% $ 1.8 bn
OF UNDERLYING
NET INCOME DIVIDEND
(REGULAR) YIELD FOR 2019* PAID OUT SINCE IPO**
AVERAGE 5-YEAR DY, %
5.2% 5.1%
4.4% 4.1%
3.3%
1.9% 1.7%
1.4% 1.3% 1.3% 1.2% 1.2% 1.2%
1.0% 1.0%
0.6% 0.3%
NA NA NA
Polyus
Barrick
Petropavlovsk
Agnico Eagle
FTSE 100
FTSE 250
Kinross Gold
Polymetal
FTSE GM
B2Gold
Centerra
Fresnillo
Centamin
AngloGold
Yamana Gold
IAMGOLD
Gold Fields
Newcrest
Newmont
Pan American
Source: Bloomberg data
*DPS declared for 2019 ($0.82) divided by 2019 average share price ($12.7)
**Including final dividend declared for 2019
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 9
ESG LEADERSHIP
RECOGNITION OF OUR EFFORTS TO DATE
First and only Russian member ESG rating A
Member of ESG Leaders index
1st among 55 precious metals ESG score A- ESG score С+
companies
100 percentile
First sustainability-linked loan in CIS
02 COVID-19 UPDATE
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 11
CURRENT SITUATION
KEY GOVERNMENT ACTIONS SITUATION IN THE COMPANY
No interruptions in production, supply chain or
sales yet
Both Russia and Kazakhstan have imposed At non-site offices, most of the work and
various self-isolation requirements that differ communication is done remotely from home.
among regions, however so-called continuous
Personal meetings and business trips have
operations and strategic industrial companies been cancelled
(including Polymetal) are allowed to carry on as
At all operations and offices, strict healthcare
usual
procedures are in place, including temperature
Travel restrictions. Borders are generally closed checks, surveillance and isolation of new shifts
for passenger traffic, however no official (at remote sites), enhanced hygiene protection
measures to restrict domestic traffic are in
in public spaces
place
Polymetal decided not to extend the duration
Businesses have to introduce compulsory
of the shifts at remote sites because of
health control and virus preventive measures
industrial safety considerations (fatigue) and
legal repercussions (statutory restrictions on
the total amount of hours worked)POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 12
RISK ASSESMENT
People
Impact on
Most
Risk area Probability FCF/Timeline Implications
exposed
for projects
Workforce is compartmentalized and, even in
Health – local sites Varvara the case of infection, complete lockdown is
unlikely to be necessary
Remoteness and relatively long shifts limit the
Health – remote sites Albazino
risk of massive contagion
500 employees at Dukat are Kazakhstan
citizens. We have hired temporary employees
International travel restrictions Dukat for most positions. Significant impact on
production is now unlikely even in the event of
prolonged ban on international travel
No official measures of this kind have been in
place.
Russian regions started lifting lockdown on
Domestic travel restrictions Kyzyl
some activities (differ by the region).
Kazakhstan resumed limited air passenger
traffic between regions starting from May 1st
Very low Very highPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 13
RISK ASSESMENT
Supply chain
Impact on
Most
Risk area Probability FCF/Timeline Implications
exposed
for projects
No issues so far as the vast majority of
materials are sourced from home markets and
Consumables/services
China. Most operations have adequate
supplies of critical consumables
All of the European suppliers to POX have re-
Spare parts Amursk POX started. We plan to establish additional spare
parts inventory in case of further lockdowns
All critical equipment has been shipped by
Nezhda vendors. Installation crews for major equipment
(mills) have been sourced domestically
The autoclave vessel is ready to sail. All
suppliers have resumed industrial activities.
POX-2
However, potential re-imposition of restrictions
on industrial activities may create problems
Very low Very highPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 14 RISK ASSESMENT Sales and refining Dore. Refineries in Russia and Kazakhstan continue to operate normally. Given the imposition of very strict curfew in Nur-Sultan the probability of disruption in Kazakhstan is higher than in Russia, however, dore can be re-routed to a refinery in Russia Bullion. Although the Central Bank of Russia decided to temporarily suspend gold purchases, commercial banks in Russia continue to buy bullion. No negative signs of demand repercussions for domestic producers are present. The Company also maintains the ability to directly export bullion abroad, which will be supported by the forthcoming introduction of general export licenses for gold producers Concentrate. Concentrate shipments to China by sea and by rail are back to a regular schedule after a temporary suspension of shipments in February
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 15
BALANCE SHEET
Net debt of $1.66bn as at 1 April, a $181m increase compared to 1 January, mainly as a result of
$94m special dividend payment
Negative quarterly FCF from operations (approx. $60m) because of seasonality of sales and seasonal
diesel fuel purchases
One-off $20m payment for Tomtor
Average cost of debt remains below 4%
ACTUAL MATURITY PROFILE, $m INTEREST RATE BREAKDOWN
279
258
242
Fixed Floating
189* 191 77% 23%
125 125 125 125
-
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
* Net of cashPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 16
LIQUIDITY PROFILE
Strong cash position of $565m as at 1 April (equal to c. 4-months spending)
We have proactively secured additional medium term (6-9 month) funding in March to cover unexpected
liquidity gaps should revenue streams be interrupted (c. $300m)
We continue to maintain $1.4bn of available credit lines of which $0.6bn are considered committed
GROUP’s LIQUIDITY POSITION, $m
1,400
Committed
revolving
credit lines
600
Uncommitted
565 credit lines
Additional
318 cash cushion 800
247
247
Cash, 1 March Cash, 1 April Undrawn credit lines,
1 April03 CORPORATE GOVERNANCE UPDATE
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 18
BOARD COMPOSITION
CHAIR INDEPENDENT DIRECTORS LEAVING DIRECTORS
IAN COCKERILL
Chair (N, S) OLLIE OLIVEIRA TRACEY KERR GIACOMO BAIZINI JEAN-PASCAL
Chair of the Nomination Committee, SINED (N, A, R) INED (S, R) INED (A, N) DUVIEUSART
Non-Executive Director at BHP, Ex- Chair of the POLYs Chair of the Safety & Chair of the Audit NED since 2011
President and CEO of Gold Fields, Remuneration Sustainability and Risk Committee PPF Group
ex-CEO of AngloCoal Committee, Chair of Committee, Group and ex-CFO of
Audit Committee Head of Safety and EVRAZ Group S.A.
at Antofagasta plc, Sustainable
NON-INDEPENDENT ex-Executive Director Department in Anglo
at De Beers American plc
DIRECTORS
JOINING
CHRISTINE
COIGNARD
INED since 2014
VITALY NESIS
Group CEO, S
ANDREA ABT ITALIA BONINELLI VICTOR FLORES
INED (A) INED (R) INED (A, S)
Ex-Chief Ex-Executive VP for Director of Strategic
Procurement Officer Organizational Projects, Orion
at Siemens AG Development at Resource Partners
NED at John Laing AngloGold Ashanti. (USA) Inc
Group, Petrofac Ltd. N – Nomination Committee
KONSTANTIN YANAKOV and Gerresheimer AG R – Remuneration Committee
ICT Group Ltd A – Audit and Risk Committee
Ex-CFO of Polymetal S – Safety and Sustainability CommitteePOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 19
SHAREHOLDER STRUCTURE
SHARES OUTSTANDING FREE FLOAT, $bn
472 MILLION
7.0
72% 4.8
FREE FLOAT
2.2
ICT Group 1.6
Alexander Nesis
27.4%
Polymetal Polyus Centamin Fresnillo
Otkritie
LTM ADTV, $m
6.9% 30 LSE
7 MOEX
PPF 24
Petr Kellner
6.5% 23 15
18
Institutional
Management
investors & Directors 0.8%
and HNWI 58.4% 10
8
PPF’s stake is now part of the Free Float as Jean-Pascal
Duvieusart (PPF) left the Board at the last AGM on April 27, 2020
Previous free float – 65% Polymetal Polyus Fresnillo Centamin04 OPERATIONS UPDATE
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 21
Q1 2020 RESULTS
Q1 production was up 5% y-o-y and exceeded the budget due to Kyzyl strong performance
driven by material positive grade reconciliation and higher processing volumes as well as
increased contributions from Varvara and Svetloye
ORE PROCESSED, Kt GE GRADE, g/t
+2% +4%
3.5 4.3
3.4
4.1
Q1 2019 Q1 2020 Q1 2019 Q1 2020
PRODUCTION, GE Koz REVENUE, $m
+5% +9%
391 494
371 454
Q1 2019 Q1 2020 Q1 2019 Q1 2020POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 22
FINANCIAL HIGHLIGHTS
Strong growth of all profitability metrics driven by
higher prices and production at stable unit costs
2019 2018 Change
Revenue, $m 2,246 1,882 +19%
Adjusted EBITDA, $m 1,075 780 +38%
Adjusted EBITDA margin 48% 41% +7%
Total cash cost, $/GE oz 655 6541 +0%
All-in sustaining cash cost, $/GE oz 866 8641 +0%
Underlying net earnings, $m 586 447 +31%
Underlying EPS, $/share 1.25 1.00 +26%
Dividends proposed for the FY, $/share 0.82 0.48 +71%
Net operating cash flow, $m 696 513 +36%
Capital expenditure, $m 436 344 +27%
Free cash flow (pre M&A), $m 256 176 +45%
Net debt, $m 1,479 1,520 -3%
Net debt/Adjusted EBITDA, x 1.38 1.95 -29%
Notes:
1) Restated in respect of Dukat’s TCC for 2018 to include the concentrate treatment charges by the third-party offtakersPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 23
COMPETITIVE COST LEVELS
2019 ALL-IN SUSTAINING CASH COSTS, $/oz YEAR-ON-YEAR CHANGE IN AISC, %
New Gold 1,310 Newmont 30.7
Newmont 1,222 Fresnillo 27.0
Buenaventura 1,140 Buenaventura 19.4
IAMGOLD 1,124 New Gold 19.2
Fresnillo 1,038 Highland 15.9
Eldorado 1,034 B2 Gold 15.2
1
Petropavlovsk 1,029 Pan American 12.3
Agnico Eagle 1,010 Barrick Gold 10.5
AngloGold 998 Centamin 6.7
Kinross 983 IAMGOLD 6.3
Pan American 2 980 Agnico Eagle 6.3
Yamana 978 Eldorado 4.0
Gold Fields 970 AngloGold 2.3
Hochschild 965 Kinross 1.9
Centamin 943 Yamana 0.7
Barrick Gold 912 Polymetal 0.2
Polymetal 866 Centerra -0.7
B2 Gold 862 Hochschild -0.8
Endeavour 818 Gold Fields -1.1
Highland 791 Polyus -1.8
Centerra 778 Endeavour -3.0
Newcrest 738 Petropavlovsk -9.6
Polyus 594 Newcrest -12.0
Source: Companies’ data.
1) 1H 2019 data; 2) Au/Ag rate calculated based on the Company’s average realised pricesPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 24
COST GUIDANCE BY MINE
At budget macro assumptions
AISC GUIDANCE BY MINE, $/oz
2020E
2019 1,264
12.2 1,064
850-
872 880 900
866
514 =
449 460
Svetloye Voro Kyzyl Albazino/ Omolon Dukat 2 Varvara Mayskoye Polymetal
AmurskPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 25
COST STRUCTURE AND SENSITVITY
The sharp fall in the oil prices has triggered material YTD devaluation of RUB and KZT
However, given the current highly volatile macroeconomic background the full-year guidance of $650-700/GE
oz for TCC and $850-900/GE oz for AISC is currently maintained
Diesel fuel supply contracts for Russian Far East operations have been signed at prices 1-5% below 2019 levels
(in RUB). This translates into approximately 20-25% decline in dollar terms. We expect the average annual price
in RUB to be roughly the same y-o-y
2020E CASH COST STRUCTURE 2020E CAPEX STRUCTURE
$475m
RUB 48% @ 63 RUB/USD
RUB/Tenge ~40%
Diesel 16%
$ 19%
Foreign
currencies ~60%
Tenge 17%POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 26
SENSITIVITY ANALYSIS
SENSITIVITY TO RUB/USD AND GOLD PRICE
1 RUB/USD movement in $100/oz movement
domestic currency in gold price
TCC $7-10/oz ~$5/oz
EBITDA $12-17m ~$150m
FCF $13-18m ~$120m
DPS (regular) ~$0.03 ~$0.13POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 27
TAX REGULATION UPDATE
Russian and Kazakhstan taxation overview
Key taxes imposed Russia Kazakhstan
General rate - 20% (since 2008).
Different preferential tax regimes may General rate - 20% (since 2008)
decrease the tax rate up to 0%
Income tax Paid in 2019 - $18.5m
Paid in 2019 - $85.9m
Effective tax rate 2019 – 22.9%
Effective tax rate 2019 – 14.2%
General rate - 6% for Au / 6.5% for Ag General rate - 5% for Au, Ag (since 2011).
Royalty (since 2002). Calculated based on the Calculated based on the market price of precious
(Mineral extraction tax, realized selling price metals contained in the ore extracted
or MET)
Paid in 2019 - $68.0m Paid in 2019 - $45.4m
WHT on intragroup General rate - 15% (since 2002) General rate - 15% (since 2008)
dividends Applicable Russia-Cyprus rate - 5% Applicable Kazakhstan-Cyprus rate - 5%POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 28
TAX REGULATION UPDATE
Latest tax initiatives
Latest tax initiatives Status
RUSSIA
Proposal to increase withholding tax rate on dividends under DTT with Cyprus in
the light of COVID-19 economic impact mitigation measures
Current lowest available rate for the Group: 5% WHT
After amendments: 15% WHT Certain
Timing: to be enacted 1 Jan 2021
Details still to be clarified - Cyprus might want to negotiate some exemptions, e.g. to listed
entities
Potential increase of income tax rate for mining companies rather than oil and gas
sector
As an alternative mechanism an introduction of an additional income tax is discussed (already Under discussion
applied for closed list of oil and gas projects) with excess profit withdrawal based on EBITDA
margin
KAZAKHSTAN
Potential increase of the income tax rate for companies of mining sector by 7%
Under discussion
(to 27%)POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 29
BROWNFIELD PROJECTS
Average annual Average
Start CAPEX,
Project LOM production, AISC, Target
-up $m
Koz $/oz
Primorskoye 2022 7 4 30 750-800 Dukat LOM extension
Conveyors plus electric
Mayskoye AISC down fleet to reduce ventilation,
2022 30 10+ -
haulage by $150 fuel consumption and
carbon footprint
Mayskoye AISC down Reduce dilution,
2023 40 10+ +30
backfill by $100 improve grade
Refractory processing to
Voro
2022 90 9 70 500-550 complement ore stockpiles
flotation plant
treatment
Nevenrekan 2023 7 3 50 700-750 Omolon LOM extension
Replace low-grade
Elevator 2024 20 4 50 800-850
Varvara orePOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 30
ASSET ACQUISITION AND DISPOSAL UPDATE
Negotiations impacted by the current COVID environment
Asset Status
COMPLETED
VTB will invest $71m in exchange for 41% stake (minorities buyout + newly issued
Veduga
capital). Polymetal will retain 59%
Sold in May 2020 for a total consideration of $27m (cash+debt
North Kaluga
assumption+royalties)
Tomtor 9.1% stake acquired for a total consideration of $20m in March 2020
Sopka Sold in March 2020 for a total consideration of $10m + 1% NSR
Lichkvaz Sold in December 2019
IN PROGRESS
Kutyn Ongoing marketing. Decision to made in Q305 PROJECTS UPDATE
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 32
NEZHDA
Completion scorecard
Equipment
Engineering
Permitting Contracting Construction
delivery
Processing
plant 95% 90% 75% 60%
main building
Crusher 100% 100% 70% 25%
Site roads and
100% 100% 100% 90%
bridges
Power complex 100% 100% 85% 20%
Infrastructure
100 % 100 % 100 % 90%
and camp
Tailings storage
70 % 50 % 50 % 50%
facility #1POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 33 NEZHDA Photo update: pit #1
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 34 NEZHDA Photo update: pit #2
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 35 NEZHDA Photo update: concentrator building completed
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 36 NEZHDA Photo update: SAG mill and metal structures installation
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 37 NEZHDA Key project milestones Q1 2019 Start of construction Q3 2019 First ore mined Q4 2019 Plant framework construction and winterization Q1 2020 Start of equipment installation Q4 2020 • Commissioning of diesel power plant completed Q2 2021 • Mechanical completion Q3 2021 • Start of commissioning activities Q4 2021 • End of commissioning activities and first production Q2 2022 • Full ramp-up Q3 2022 • Grid power to the production site
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 38
POX-2
Completion scorecard
Basic Detailed
Contracting Construction
engineering engineering
POX area
100% 40% 85% 5%
(Hatch scope)
Other processing
areas (Polymetal 60% 40% 80% 5%
scope)
Cryogenic oxygen
100% 85% 90% 5%
plant
Internal and
external 60% 30% 15% 10%
infrastructurePOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 39 POX-2 Photo update: site view
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 40
POX-2
Photo update: foundation works
POX building foundation Autoclave foundation inside preservation hangar
POX building foundation Autoclave and POX building foundationsPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 41
POX-2
Photo update: autoclave at the vendor’s site
(COEK, Belgium)
Length 50 m, diameter 6 m, weight 961 tPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 42
POX-2
Purchasing update. Within 10% contingency
Autoclave cost overrun of $3.7m is attributable to:
Freight cost increase due to reallocation of small tonnage ships for social needs due to COVID-19 pandemic
Pier construction cost increase due to change in its design to account for a wider range of water level in the
river
Actual cost incl. FS cost incl. Difference,
Equipment Vendor Country
logistics, US$ mln logistics, US$ mln US$ mln
Cryogenic oxygen plant Linde AG Engineering Division Germany 29.4 30.5 -1.1
Autoclave COEK ENGINEERING N.V. Belgium 26.7 23.0 +3.7
Stainless tanks CW Technics SIA Latvia 19.6 19.4 +0.2
Vessels, spargers, brick lining Hatch Canada 19.0 18.8 +0.2
Agitators with seal system EKATO Ruhr und Mischtechnik Germany 9.0 9.9 -0.9
Thickeners and filtration Outotec Finland 7.3 10.1 -2.8
Mills (concentrate prep, lime) Outotec Finland 7.2 6.4 +0.8
Front-end water treatment Coraline Eng. Europe, SA 6.5 2.8 +3.7
Desorption and electrolysis Coraline Eng. Europe, SA 5.6 7.3 -1.7
Intensive leaching system Gekko Systems Australia 4.6 5.4 -0.8
Hot Condensate Candle filters BHS-Sonthofen GmbH Germany 4.5 1.8 +2.7
Air-Cooled Heat Exchangers Uralenergoservice Italy 4.4 1.1 +3.3
Reverse Osmosis Hydrotech Russia 3.8 3.7 +0.1
Other 19.0 16.6 +2.4
TOTAL 166.6 156.8 +9.6
91% of
equipment
CAPEXPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 43
POX-2
2020 key milestones
H1 2020 Completion of autoclave foundation
• Completion of POX building foundation
• Construction of new concentrate storage
H2 2020 • Autoclave delivery and installation
• Completion of POX-2 building framework
Q4 2023 • Full ramp-upPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 44
VEDUGA: VTB INVESTMENT
Transaction summary
TRANSACTION DETAILS SHAREHOLDER STRUCTURE
VTB to invest $71m in return for a 41% equity stake: Before Transaction
$36m to acquire a 26% stake from the existing minority
25.7%
shareholders
$35m in cash in exchange for newly issued share capital
The implied Amikan equity transaction value is $140m
Cash-in proceeds - ongoing exploration and development costs
VTB’s put option to sell its stake between the 3rd and the 5th
anniversary following signing at a fixed IRR for VTB 74.3%
Polymetal’s call option to acquire VTB’s stake any time during the
4y and 9m following signing at a fixed IRR for VTB
Options are to be settled in Polymetal shares Following Transaction
STRATEGIC RATIONALE 40.6%
Accelerated buyout of the minority shareholders streamlining
decision-making process
Attractive valuation
Decreased leverage and availability of funds for further 59.4%
exploration and project development
Limited value dilution compared to conventional equity financing
due to capped rate of return for the financial partner Polymetal Minorities VTB CapitalPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 45
VEDUGA
Long section
W
Indicated MR
Inferred MR
Intermediate
Western pit pit South Eastern South Eastern
Central pit
pit 1 pit 2
Arrow
pitPOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 46
VEDUGA
Ore Reserve increase potential
CENTRAL PIT
12.7
26.9 50.9
Design Pit 8.7
4.4 7.3 Actual Pit
14.3 30.6
6.5 6.6
18.1
XX True width, m 7.6
XX Grade, g/t
16.6
16.7
6.6
6.9
15.7
7.2
13.8
11/1
6.2
3.6
8.3
8.9 17.8
5.5
12.3
5.5 8.4
5.2
7.8 15.4 4.4
5.0
45.6
66,3
10.5
6,7 38.6 3.5
6.9 4.1
7.8
7.8
49.7
5.6POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 47
VEDUGA
Conceptual project highlights
Concentrator capacity 1.5 Mtpa
Gold grade* 5 g/t
Recoveries in dore* 88%
Annual production* 220 Koz of gold
TCC/AISC* $600-650 per oz / $700-750 per oz
LOM 20+ years (combined open-pit and underground)
CAPEX ~ $400m
Processing Conventional flotation + Amursk POX
Tailings Dry cake
* LOM averagePOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 48 VEDUGA Conceptual project schedule Q4 2021 • Investment decision Q1 2022 • Start of pre-stripping Q2 2022 • Start of construction Q1 2025 • First production. End of construction Q2 2025 • Full ramp-up
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 49
LONG-TERM GROWTH PIPELINE
Conceptual projects highlights
PROGNOZ VIKSHA
Ownership: 100% Ownership: 100%
Mineral Resources: 256 Moz at 789 g/t Ag eq
Mineral Resources: 165 Mt at 1.1 g/t, total
Capacity: 1 Mtpa content of 5.7 Moz of PdEq (6.1 Moz of 3E)
Mining: ~8 years of open pit followed by ~10
years of underground Mining: Open-pit (300 m pit depth, 8 m average
reef width)
Processing: Flotation + Leaching + Merrill-Crowe
Production: ~20 Moz of Ag eq per annum Processing: Flotation
CAPEX: ~$250m
Next steps: Initial Ore Reserves estimate in 2H
Next steps: Initial Ore Reserves estimate in 2H 2021
2020; Investment decision in 2H 202106 OUTLOOK
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 51
UPDATED PRODUCTION OUTLOOK
2020-2025
Decreasing implied Ag/Au ratio from 1/80 to 1/120
Excluding base metals (copper, zinc and lead)
Including Veduga
GOLD PRODUCTION, GE Koz1
PRODUCTION
Stay-in-business POX-22 Nezhda Veduga3
UPSIDE:
17%
1,700 1,750
1,700
1,600 80 150
1,496 1,500 1,500 120
180 180 120
30 180
1,470 1,420 1,440 180
1,400
1,300
2019 2020E 2021E 2022E 2023E 2024E 2025E
Restated
Notes:
1) Gold equivalent (GE) including gold and silver at 120:1 Ag oz/Au oz conversion ratio
2) Effect from recoveries increase and 3rd party concentrate processing
3) Subject to Board approval in 2021POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 52
UPDATED CAPEX OUTLOOK
2020-2025
CAPEX, $m
Stay-in-business POX-2 Long-term projects
Nezhda Veduga1
475
446 445
436 22
30 410
125 50
56
108 375 30 365
133 30 120 160
50
40
130
83 80 80
25
247 235 235
225 225 235
198
2019A 2020E 2021E 2022E 2023E 2024E 2025E
Notes:
1) Subject to Board approval in 2021POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 53
2020 GUIDANCE
2019 Actual 2020 Guidance
Production, Koz of GE 1,496* 1,500
TCC, $/oz of GE 655 650-700
AISC, $/oz of GE 866 850-900
Capital expenditure, $m 436 475
Free cash flow (pre M&A) 256 Growth
50% of underlying
Regular dividend $0.62/share
net income
Net Debt/ Adjusted EBITDA 1.38x Down
Assumptions 2019 Actual 2020 Guidance
Gold, $/oz 1,411 1,400
Silver, $/oz 16.5 17.0
RUR/USD rate 65 63
Oil 66 60
Note: *Restated at 1/120 Ag/Au ratio
the guidance remains contingent on the RUB/USD exchange rate and Brent oil pricePOLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 54 DIVIDENDS Committed to returning FCF to shareholders Regular dividends continue to be shareholders’ right, especially under the current market conditions FY 2019 dividend of $0.42 approved with 100% of votes - to be paid on May 29. This will take the total dividend paid for 2019 to $0.82 per share Dividend policy remains unchanged: 50% of underlying net earnings, subject to ND/EBITDA 2.5x hard ceiling No impact from COVID-19 on liquidity and operations so far >> no impact on dividend expected
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 55
2020 NEWS FLOW
Corporate
29 May Final dividend pay-out
25 August 1H 2020 financials and interim dividend announcement
November Analyst & Investor day: growth projects
Projects
POX-2 – autoclave and cryogenic station delivery on site
Q3 Prognoz – initial Ore Reserve estimate announcement
Kutyn – marketing completion. Decision on the asset
East Bakyrchik – initial Ore Reserve estimate announcement
Q4
POX-2 – completion of framework constructionAPPENDIX
POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 57
PRODUCTION BY MINE
GE Koz
Mine Q1 2020 Q1 2019 % change Comment
Kyzyl 109 78 +39% Material positive grade reconciliation
Albazino and third-party concentrate were
Albazino-Amursk 78 81 -5% supplanted by Kyzyl concentrate at the POX
plant
Higher than planned grade supported by lower
underground dilution resulted in stable output
Dukat operations 76 76 0%
despite discontinuation of mining from the
relatively high-grade Goltsovoye mine
Larger volumes of high-grade third-party ore in
Varvara 45 38 +20%
the flotation circuit
Increased processing volumes of lower-grade
Omolon operations 42 53 -20% open-pit ore from Yolochka where mining is
currently completed
Stacking volumes and leach kinetics continued
Svetloye 21 9 +133%
to be positively impacted by warmer winter
Mining completed. Processing of lower-grade
Voro 20 27 -26%
stockpiles is ongoing
Better recoveries driven by flowsheet
Mayskoye
38 33 +15% improvements (rougher concentrate re-
(gold in concentrate)
grinding)POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 58
CAPITAL ALLOCATION
NET DEBT RECONCILIATION 2018-2019, $m
1,520 1,479
+240 +15
-256 -40
Net Debt Free Cash Flow Disposals Dividends Other Net Debt
as at 31.12.2018 (pre M&A) as at 31.12.2019
NET DEBT RECONCILIATION 2014-2019, $m
1,479
-16
1,249 +1,049
+292
-1,095
Net Debt Free Cash Flow M&A Dividends Other Net Debt
as at 31.12.2014 (pre M&A) as at 31.12.2019POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 59
BOARD INDEPENDENCE AND DIVERSITY
BOARD INDEPENDENCE BOARD DIVERSITY
Independent
Chair
directors
Non-independent
directors
Men Women 9 DIRECTORS
IN TOTAL
Outer circle – post changes
Inner circle – prior to changes
1/11%
2/22% 3/33%
1/13%
3/38% 2/25%
4/50%
6/67%
6/75%
6/67%POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 60
REMUNERATION POLICY UPDATE
Board members held meetings with shareholders to discuss proposed changes in Remuneration Policy. Feedback
was incorporated into the following enhancements which were approved at the AGM on 27 April 2020:
INCORPORATED CHANGES
1. Reduction of maximum grant level and change to calibration of vesting scale under Performance Share
Plan (PSP, part of long-term incentive plan):
Reduction in the target normal grant level from 150% to 125% of base salary
Reduction in the exceptional grant level from 200% to 150% of base salary
Change of full vesting tied to Polymetal’s relative TSR from top decile to top quintile performance against
FTSE Gold Mines index
2. 2x cap on the face value of the award on grant under PSP
3. C-level executives are to retain 100% of shareholding requirement (or actual shareholding if lower) for
two years post-cessation of employment
4. Extension of malus and clawback: inclusion of misconduct or fraud, misstatement of accounts, corporate
failure, serious reputational damage, failure of risk management
5. Additional Senior Independent Director fee ($25k) introduction. Minor adjustments to INED fees
6. Board Chair remuneration increase to $500k in response to the more prominent role of the Board Chair
(first increase since IPO, 2011)POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 61
REMUNERATION POLICY UPDATE
Board members held meetings with shareholders to discuss proposed changes in Remuneration Policy. Feedback
was incorporated into the following enhancements which were approved at the AGM on 27 April 2020:
INCORPORATED CHANGES
1. Reduction of maximum grant level and change to calibration of vesting scale under Performance Share
Plan (PSP, part of long-term incentive plan):
Reduction in the target normal grant level from 150% to 125% of base salary
Reduction in the exceptional grant level from 200% to 150% of base salary
Change of full vesting tied to Polymetal’s relative TSR from top decile to top quintile performance against
FTSE Gold Mines index
2. 2x cap on the face value of the award on grant under PSP
3. C-level executives are to retain 100% of shareholding requirement (or actual shareholding if lower) for
two years post-cessation of employment
4. Extension of malus and clawback: inclusion of misconduct or fraud, misstatement of accounts, corporate
failure, serious reputational damage, failure of risk management
5. Additional Senior Independent Director fee ($25k) introduction. Minor adjustments to INED fees
6. Board Chair remuneration increase to $500k in response to the more prominent role of the Board Chair
(first increase since IPO, 2011)POLYMETAL INTERNATIONAL PLC INVESTOR PRESENTATION 62 DISCLAIMER This presentation includes forward-looking statements technological and market change in the industries in management in the market in which the Company that involve known and unknown risks and which the Company operates, as well as other risks operates. While the Company believes that such uncertainties, many of which are beyond the specifically related to the Company and its operations. research and estimates are reasonable and reliable, Company’s control and all of which are based on the Past performance should not be taken as an indication they, and their underlying methodology and directors’ beliefs and expectations about future or guarantee of future results, and no representation assumptions, have not been verified by any events. These forward-looking statements include or warranty, express or implied, is made regarding independent source for accuracy or completeness and statements concerning plans, objectives, goals, future performance. Neither the Company, nor any of are subject to change without notice. Accordingly, strategies, future events or performance, and its agents, employees or advisors intend or have any undue reliance should not be placed on any of the underlying assumptions, predictions and other duty or obligation to supplement, amend, update or industry, market or competitive position data statements, which are other than statements of revise any of the forward-looking statements contained in this presentation. The information historical facts. The words “believe,” “expect,” contained in this presentation. to reflect any change contained in this presentation has not been “anticipate,” “intends,” “estimate,” “forecast,” in their expectations or any change in events, independently verified. Neither the Company, any of “project,” “will,” “may,” “should”, “shall”, “could”, “risk”, conditions or circumstances on which such its affiliates, subsidiaries or subsidiary undertakings “aims”, “plans”, “predicts”, “continues”, “assumes”, statements are based nor any of their respective advisors or representatives “positioned” and similar expressions or the negative makes any representation or warranty, express or thereof identify certain of the forward-looking Nothing in this presentation constitutes an offer, implied, and no reliance should be placed on the statements. Forward-looking statements include invitation, recommendation to purchase, sell or fairness, accuracy, completeness or correctness of the statements regarding: strategies, outlook and growth subscribe for any securities in any jurisdiction or information or opinions contained in this presentation. prospects; future plans and potential for future solicitation of any offer to purchase, sell or subscribe Percentages and certain amounts included in this growth; liquidity, capital resources and capital for any securities in any jurisdiction and neither the presentation have been rounded for ease of expenditures; growth in demand for products; issue of the information nor anything contained herein presentation. Accordingly figures shown as totals in economic outlook and industry trends; developments shall form the basis of or be relied upon in connection certain tables may not be the precise sum of the of markets; the impact of regulatory initiatives; and with, or act as any inducement to enter into, any figures that precede them. Neither the Company, or the strength of competitors. The forward-looking investment activity. any of its affiliates, advisors or representatives statements in this presentation are based upon accepts any liability whatsoever (in negligence or various assumptions and predictions, many of which To the extent available, the industry, market and otherwise) for any loss howsoever arising from any are based, in turn, upon further assumptions and competitive position data contained in this information contained in the presentation. predictions, including, without limitation, presentation come from official or third party sources. management’s examination of historical operating Third party industry publications, studies and surveys trends, data contained in the Company’s records and generally state that the data contained therein have other data available from third parties. Although the been obtained from sources believed to be reliable, Company believes that these assumptions were but that there is no guarantee of the accuracy or reasonable when made, these assumptions are completeness of such data. While the Company inherently subject to significant uncertainties and believes that each of these publications, studies and contingencies which are difficult or impossible to surveys has been prepared by a reputable source, the predict and are beyond its control, and the Company Company has not independently verified the data may not achieve or accomplish these expectations, contained therein. In addition, certain of the industry, beliefs or projections. Many factors could cause the market and competitive position data contained in this actual results to differ materially from those contained presentation come from the Company's own internal in predictions or forward-looking statements of the research and estimates based on the knowledge and Company, including, among others, general economic experience of the Company's conditions, the competitive environment, risks associated with operating in Russia and Kazakhstan, rapid
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