Investor presentation April 2014 Amursk POX plant
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. 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Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. The information contained in this presentation has not been independently verified. Neither the Company, any of its affiliates, subsidiaries or subsidiary undertakings nor any of their respective advisors or representatives makes any representation or warranty, express or implied, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or 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. 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Polymetal at a glance > 1,282 Koz of GE production in 2013 1 13.3 Moz 2 GE reserves at 3.7 g/t > > Market Cap US$3.9 bn 3 > Mayskoye Cumulative dividend yield of 7.4% in 2012-2013 4 Omolon Dukat Khakanja Albazino Voro Amursk POX Varvara (Kazakhstan) Source: Company information, Bloomberg (1) GE (gold equivalent) at 60:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios (2) Ore Reserves as of 01.01.2014 in accordance with the JORC Code (2012). Average gold/silver conversion ratio is 59.6:1 Ag oz/Au oz (3) As of 27 March 2014 (4) Total dividends paid (US$ 1.02/oz) to average USD share price for the period (US$13.7/oz) 2
Robust production growth Gold production, Koz of GE 1 1400 1400 1350 1300 1282 48 140 Mayskoye 1063 238 210 Albazino 78 810 159 174 Omolon 170 30 131 46 134 Varvara 110 127 143 120 164 Khakanja 128 154 150 157 Voro 160 Dukat 409 400 356 320 2011A 2012A 2013A 2014E 2015E 2016E 2017E Gold share in GE production 1 70% 70% 68% 65% 63% 55% 55% 2011A 2012A 2013A 2014E 2015E 2016E 2017E Source: Company information (1) GE at 60:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios 3
2013 Highlights + 21% y-o-y production growth. Original guidance exceeded by 7% + Strong free cash flow despite challenging market conditions Amursk POX plant achieved design throughput and recovery, an important + strategic milestone which now presents a unique competitive advantage in the FSU + Successful ramp-up at Mayskoye Final dividend of US$ 0.08 per share in respect of FY2013 is proposed by the + Board + Stable TCC of US$ 745/ GE oz in line with the original guidance – Decisions on growth projects deferred – No significant reserve additions from exploration 4
Operating highlights 2013 2012 % Change (y-o-y) Production Gold, Koz 805 589 +37% Silver, Moz 27.2 26.5 +3% Copper, tonnes 4,841 6,567 -26% Gold equivalent, Koz 1 1,282 1,063 +21% Sales Gold, Koz 818 593 +38% Silver, Moz 27.4 27.8 -2% Copper, tonnes 6,165 6,697 -8% Notes: (1) Based on 1:60 Ag/Au and 5:1 Cu/Au conversion ratios 5
Financial highlights 2013 2012 % Change Revenue, US$m 1,707 1,854 -8% Adjusted EBITDA, US$m (1) 598 932 -36% Adjusted EBITDA margin 35% 50% -15 pp Total cash cost, US$/GE oz (2) 745 690 +8% All-in cash cost, US$/GE oz 1,086 1,059 +3% (Loss)/ profit for the year, US$m (198) 428 NM Underlying net earnings, US$m (1) 117 431 -73% Underlying EPS, US$/share (1) 0.30 1.13 NA Dividend declared, US$/share (3) 0.32 0.70 -54% Net operating cash flow, US$m 462 541 -15% Capital expenditure, US$m (4) 319 397 -20% Free cash flow, US$m 138 138 0% Net debt/ EBITDA 1.75 1.11 +57% Net debt, US$m 1,045 1,037 +1% Source: Company data, IFRS accounts (1) The Company defines Adjusted EBITDA (a non-IFRS measure) as profit for the period adjusted for depreciation expense, rehabilitation expenses, write-down of inventory to net realisable value, share-based compensation, listing expenses, gains and losses on acquisitions and disposals, foreign exchange gain/(loss), change in fair value of derivatives, change in fair value of contingent consideration, finance income, finance costs, and income tax expense. Underlying net earnings defined (loss)/ profit for the period adjusted for impairment loss (after tax). (2) GE=gold equivalent based on actual realised prices (3) FY 2013: final dividend for FY 2012 declared in April 2013 and interim dividend proposed for the 1H 2013 declared in August 2013. FY 2012: final dividend for FY 2011 declared in April 2012 and special dividend for FY 2012 declared in December 2012. (4) Including capitalised stripping. Cash basis 6
2014 objectives 1.3 Moz GE production US$ 700-750/ GE oz total cash cost based on current commodity prices and exchange rates US$ 975-1025/GE oz all-in sustaining cash costs US$ 250 million CapEx, including US$ 60 million exploration Mayskoye long-term offtake agreement Reserve growth from exploration efforts Action plans for the 3 rd generation of development projects 7
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