ANALYST AND INVESTOR DAY 28 April 2020
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 2 TABLE OF CONTENTS Introduction 01 Ian Cockerill, Chair of the Board 02 COVID-19 update Vitaly Nesis, CEO and Maxim Nazimok, CFO 03 Corporate governance update Ian Cockerill, Chair of the Board 04 Operations update Vitaly Nesis, CEO and Maxim Nazimok, CFO 05 Projects update Vitaly Nesis, CEO 06 Outlook Vitaly Nesis, CEO and Maxim Nazimok, CFO
01 INTRODUCTION
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 4 POLYMETAL TODAY Top op-10 10 WORLD GOLD PRODUCER 2 nd nd LARGEST GOLD PRODUCER IN RUSSIA 9 OPERATIONS ACROSS 2 COUNTRIES FTSE FTSE 100 100 & & MSCI MSCI CONSTITUENT Competence center Development Operations
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 5 ESG LEADERSHIP RECOGNITION OF OUR EFFORTS TO DATE ESG rating A Firs rst t and only Russian member Member of ESG Le Leader ers s index ex ESG score A- ESG score С+ st among 55 precious metals 1 st companies 100 percentile Firs rst sustainability-linked loan in CIS 1st st place among M&M companies in a gender equality in Russia Top-5 5 best employers in Russia
SECTOR-LEADING SHAREHOLDER RETURNS POLYMETAL INTERNATIONAL PLC 254% 5.2% Source: Bloomberg Petropavlovsk Centamin 5-YEAR DY, % 5-YEAR TSR, % 209% 199% 183% 169% 160% 5.1% 4.4% 4.1% B2Gold Polyus Polymetal FTSE 100 Newmont Polymetal 3.3% Kinross FTSE 250 Centamin 1.9% Centerra 132% 118% 105% 90% AngloGold 1.7% Fresnillo Pan American 1.4% Pan American Barrick 1.3% Newmont Agnico Eagle 1.3% Gold Fields 87% FTSE GM 1.2% Yamana Gold 79% Gold Fields 1.2% FTSE GM 77% Newcrest 1.2% 1.0% Newcrest 48% IAMGOLD Barrick ANALYST AND INVESTOR DAY 45% 44% Gold ($/oz) 1.0% 0.6% 0.3% Agnico Eagle Centerra AngloGold 19% Yamana B2Gold -5% Fresnillo NA -12% -15% IAMGOLD FTSE 250 NA Kinross Gold FTSE 100 NA NA Petropavlovsk Polyus 6
02 COVID-19 UPDATE
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 8 CURRENT SITUATION KEY GOVERNMENT ACTIONS SITUATION IN THE COMPANY No cases of COVID in Polymetal so far 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 usual At all operations and offices, strict healthcare 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 so far 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 ANALYST AND INVESTOR DAY 9 RISK ASSESMENT People Impact on Most Risk area Probability FCF/Timeline Implications exposed for projects Remoteness limits the risk of contagion. Workforce is compartmentalized and, even in Health – local sites Voro the case of infection, complete lockdown is unlikely to be necessary Remoteness and relatively long shifts limit the Health – remote sites Mayskoye risk of contagion 500 employees at Dukat are Kazakhstan citizens. If the restrictions are extended we will International travel restrictions Dukat need to ramp down production by roughly 30% starting from July Currently, no official measures of this kind are Domestic travel restrictions Kyzyl in place Very high Very low
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 10 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 In case industrial lockdowns in Italy and France are extended for 3-4 more months there may Spare parts Amursk POX be a risk for a shutdown in April 2021. The search for potential substitutions from Russia and China is ongoing All critical equipment has been shipped by vendors. We are looking for suitable OEMs Nezhda replacements in Russia to perform installation support services The focus is on the autoclave delivery. So far POX-2 the supplier (COEK) is continuing to operate Very high Very low
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 11 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 ANALYST AND INVESTOR DAY 12 BALANCE SHEET Net debt of $1.66 bn, 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% INTEREST RATE BREAKDOWN ACTUAL MATURITY PROFILE, $m 279 258 242 Fixed ed Floati ting ng * 191 189 77 77% 23% 125 125 125 125 - 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 * Net of cash
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 13 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 318 800 cash cushion 247 247 Cash, 1 March Cash, 1 April Undrawn credit lines, 1 April
03 CORPORATE GOVERNANCE UPDATE
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 15 BOARD COMPOSITION LEAVING DIRECTORS CHAIR INDEPENDENT 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 (A, S) INED (R) Ex- Chief Director of Strategic Ex-Executive VP for Procurement Officer Organizational Projects, Orion at Siemens AG Resource Partners Development at NED at John Laing AngloGold Ashanti. (USA) Inc N – Nomination Committee Group, Petrofac Ltd. R – Remuneration Committee KONSTANTIN YANAKOV and Gerresheimer AG A – Audit and Risk Committee ICT Group Ltd S – Safety and Sustainability Committee Ex-CFO of Polymetal
POLYMETAL INTERNATIONAL PLC ANALYST AND INVESTOR DAY 16 BOARD INDEPENDENCE AND DIVERSITY BOARD INDEPENDENCE BOARD DIVERSITY Independent Non-independent 9 DIRECTORS Chair Men Women directors 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%
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