Polus · RUS:PLZL
Polus — Polyus Gold — UBS Annual Investment Conference, Moscow 2008
18 slides from Polus's conference presentation, Oct 30, 2008
Slide 1: Polyus Gold
Polyus Gold UBS Annual Investment Conference, Moscow, October 29-30
Slide 2: Overview: Key Operations
Overview: Key Operations Operating mines Operating mines 3 producing mines Alluvial operations Alluvial operations 1 alluvial operation Greenfield/Brownfield 26 greenfield/brownfield projects Greenfield/Brownfield Projects Natalka Projects Natalka Nezhdaninskoye Nezhdaninskoye Magadan Olimpiada mine
Slide 3: 1H2008 financials: The major factors influencing 1H2008 financial results
1H2008 financials: The major factors influencing 1H2008 financial results Exceeding earlier provided guidelines and estimates Considerable growth of production by 18.9%; Increase in the average gold selling price for the 1H2008 by 9.9%; Higher mining tax and income tax as a result of increase in sal
Slide 4: 1H2008 financials: Revenue and EBITDA reached their historical maximum
1H2008 financials: Revenue and EBITDA reached their historical maximum ● Sales increased 63.5% compared to ● 1H2008 EBITDA were USD 240 million, an 1H2007, showing 2-year CAGR of 30.5%. increase of 93.5% from 1H2007 and 37% 2- year CAGR. mln USD 1H2006-08 mln USD 1H2006-08 CAGR = 30.5% CAGR = 37% 30
Slide 5: 1H2008 financials: 91% 2-year CAGR in operating cash flow
1H2008 financials: 91% 2-year CAGR in operating cash flow ● Net income* of the group increased by 29% ● 91% 2-year CAGR in operating cash flow compared to 1H2007 showing 2-year CAGR of 61% mln USD 1H2006-08 mln USD 140 CAGR = 91% 128 1H2006-08 140 132 CAGR = 61% 120 113 120 100 100 80 80 60 57.6 60
Slide 6: 1H2008 financials: Expenses – one of the lowest TCC but extensive Capex
1H2008 financials: Expenses – one of the lowest TCC but extensive Capex ● 1H2008 IFRS based TCC equal to 431 USD/ounce. ● Extensive Capex program brings Excessive stripping-adjusted TCC =333 USD/ounce. operations closer to the date 13-29% TCC growth lower than CAGR in Revenue mln USD and EBITDA 300
Slide 7: 1H2008 financials: TCC growth analysis (example of Olimpiada mine)
1H2008 financials: TCC growth analysis (example of Olimpiada mine) ● 1H2006-1H08 Olimpiada TCC growth is a ● 1H2006-1H2008 required ore processed result of switching to solid sulfide ore for a production of 1 ounce of gold Tonnes of ore required k tonnes of ore processed 7.00 6.63 6.35 6.00 5.39 5.0
Slide 8: 1H2008 financials: Comparison with peers
1H2008 financials: Comparison with peers ● Polyus Gold TCC lower than average “Gold- ● One of the best companies in the sector only” TCCs (477 USD/ounce) in terms of profitability** “Gold-only” TCC, USD/ounce* 600 578 60% 550 506 50% 47% 500 469 472 447 450 450 431 40% 39% 414 400 30% 350 333 26% 20
Slide 9: Projects update: Blagodatnoe
Projects update: Blagodatnoe Highlights of the feasibility study ● Mine life 2010-2026 2008 CAPEX update ● Reserves 8.0 m oz • Mill construction: construction of all workshops ● Mill capacity 6 mtpa began (main building, crushing plant, ● Recovery 88.6% hydrometallurgy house, weigh house, chemicals
Slide 10: Projects update: Titimukhta
Projects update: Titimukhta Highlights of the feasibility study ● Mine life 2009 – 2021 ● P&P reserves 2.2 m oz at 3.3 g/t ● Mill capacity 2.2 mtpa ● Recovery 88% ● Ave annual gold production 170 k oz ● Capex (ex VAT) US$ 98.7 mln ● Average TCC 260 US$/oz • Located 9 km to Olimpiada mine • P&P: 2.2
Slide 11: Projects update: Verninskoe
Projects update: Verninskoe Highlights of the feasibility study 2008 CAPEX update: • Mine life 2010 - 2024 • Mining started; • Mill project capacity 2.2 mtpa • Mill construction in progress; • Expected production 218 K oz/year • Camp and accommodation facilities • Estimated CapEx US$212m constructio
Slide 12: Projects update: Natalka. Pilot plant
Projects update: Natalka. Pilot plant To minimize metal risks and to speed up the achievement July 24, 2008: of target parameters Polyus Gold management decided to The pilot plant construct a 120-130 ktpa pilot plant. launched 07 8 8 6 06 06 07 7 07 08 r0 l0 r0 l c t n r l0 ct n p u Ap Ju O Ja Ap J
Slide 13: Projects update: Natalka. Pilot plant
Projects update: Natalka. Pilot plant Large scale of Natalka project coupled with low grades require extreme accuracy in technology • Exact model of an industrial-scale ore processing plant; • High reliability of results obtained in conditions identical to industrial; • Flexible design allows to use
Slide 14: Projects update: Chertovo Koryto – 2008 geological discovery
Projects update: Chertovo Koryto – 2008 geological discovery • Located in Irkutsk region, 185km from Bodaibo; Chertovo Koryto deposit: • Licence acquired in 2004, exploration began a part of Artemievo ore field in 2005; • 2007 – exploration programme completed, Artemievo ore field: reserves increase
Slide 15: Deal with KazakhGold: KazakhGold - basic information
Deal with KazakhGold: KazakhGold - basic information 9 KazakhGold is the largest mining market player in Kazakhstan. The company includes 3 mining factories (producing mines Aksu, Bestobe and Zholymbet) and more than 10 exploration projects. 9 KazakhGold owns some assets in Eastern Kazakhstan, Roman
Slide 16: Deal with KazakhGold: Overview
Deal with KazakhGold: Overview 9 With acquisition of KazakhGold, a mining leader of Kazakhstan, Polyus Gold gets an opportunity to create additional value for its shareholders, increase its mineral resources base; 9 The Company uniting two regional leaders, №1 in Russia and №1 in Kazakhstan, will be
Slide 17: Current macroeconomic situation
Current macroeconomic situation 2 new macroeconomic scenarios were presented by the Center for Macroeconomic Analysis and Short-term Forecasting: Soft landing Hard landing 2009 2010 2011 2009 2010 2011 Gold price (consensus-forecast) 930 900 860 930 900 860 RUR/ USD exchange rate 24.9 24.2 23.6 27.0
Slide 18: Conclusion
Conclusion The company shows record financials. Revenue and EBITDA, as well as profitability are on historically high levels; Polyus Gold continues to be one of the most profitable gold producers in the World; The Company successfully meets all the targets previously declared; Polyus is prep
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