Polus · RUS:PLZL
Polus — Polyus — RBC Capital Markets Gold Conference 2005
23 slides from Polus's conference presentation, Nov 10, 2005
Slide 1: Polyus: No 1 Gold Producer in Russia. Successful Strategy Implementation
POLYUS: No 1 GOLD PRODUCER IN RUSSIA. SUCCESSFUL STRATEGY IMPLEMENTATION. Evgueni Ivanov, CEO RBC Capital Markets Gold Conference 10 November 2005
Slide 2: Disclaimer
DISCLAIMER 9 The information contained herein has been prepared using information available to Polyus Group at the time of preparation of the presentation. External or other factors may have impacted on the business of Polyus Group and the content of this presentation, since its preparation. In addi
Slide 3: Polyus Today
POLYUS TODAY 9 The leading gold producer in Russia. 9 13.3 mln. oz of JORC reserves plus 51.1 oz of JORC resources. 9 2004 results: Gold production - 1 085 k oz Total cash costs - $ 175 per oz EBITDA - $ 208 mln.
Slide 4: Group Operations
GROUP OPERATIONS Natalka, , Vostochnaya, Olimpiada, Degdekan Blagodatnoye, Kyutchus Tyrada, Magadan Nezhdaninskoe Titimuhta, Olenye, Yakutsk Panimba Kuranakh n d Zapad noe, Alluv ia ls a Bamskoye HQ, Olimpiada, Irkutsk Blagovechshensk Moscow (HQ)M oscow Krasnoya rsk Irkutsk Krasnoyarsk Zapadnoye, Ve
Slide 5: Assets Portfolio
ASSETS PORTFOLIO Amur region Exploration Pre- Feasibility Development Production Bamskoe feasibility Krasnoyarsk region Olympiada / Tyrada Olenye Blagodatnoye / Titimuhta Panimba Irkutsk region Zapadnoe Pervenets / Verninskoe Chertovo Koryto Mukodek Magadan region Natalka Degdekan / Vostochnaya Yaku
Slide 6: Mission & Strategy
MISSION & STRATEGY Our mission is to reveal nature’s values and human wealth for the benefit of our shareholders, employees and the communities Strategic goal: to grow to a leading global gold producer by 2010 9 Market value – up to $8 bln. 9 Annual production in Russia – up to 3.2 mln. oz of gold.
Slide 7: Strategy Implementation
STRATEGY IMPLEMENTATION TO BECOME A LEADING GLOBAL GOLD PRODUCER BY 2010 WE WILL: Continue large-scale exploration works on existing fields Upgrade our production capacities Create an independent company Go on with proactive M&A
Slide 8: Exploration Projects & Reserves Replacement in 2005
Exploration Projects & Reserves Replacement In 2005
Slide 9: 2005 JORC Audit Results
2005 JORC AUDIT RESULTS 9 JORC reserves amount to 13.3 mln oz Proven Probable Proven & Probable Grade, g/t Gold, k oz Grade, g/t Gold, k oz reserves, k oz Olimpiada 4.6 3 100 3.8 8 700 11 800 Verninskoe - - 3.3 1 100 1 100 Zapadnoe - - 2.8 400 400 Total 3 100 10 200 13 300 9 JORC resources exceed 51
Slide 10: Blagodatnoye: Breakthrough Discovery in Krasnoyarsk
BLAGODATNOYE: BREAKTHROUGH DISCOVERY IN KRASNOYARSK Olympiada deposit area 9 Balance reserves in pit outline (Russian Blagodatnoye B+C1+C2) 7.15 mln oz at average grade 2.4 g/t 26 km 9 Cost of resources explored - $0.8 per oz (well bellow the world average $13.8 per oz) Olimpiada mine 9 The largest
Slide 11: Blagodatnoye: Production Estimates
BLAGODATNOYE: PRODUCTION ESTIMATES Annual Mill Project Capacity 5 mln. tons of ore Gold Recovery 89% Annual Gold Production 328 k oz Total Cash Costs $270 per oz Mine Life 20 years
Slide 12: Natalka: Successful Underground Drilling
NATALKA: SUCCESSFUL UNDERGROUND DRILLING 9 Discovered additional 18.51 mln. oz of mineral resources below 600 meters at a grade of 1.59 g/m. 9 Estimated total resources (Russian B+C1+C2) – 51.83 mln. oz. 9 Exploration cost for B+C1 reserves amounted to $2.5 per oz (well below world’s average) 9 A ne
Slide 13: Production Development in 2005
Production Development in 2005
Slide 14: Olimpiada: Ore Processing
OLIMPIADA: ORE PROCESSING Raising sulfide ore processing to increase gold production in spite of oxide ores depletion 8 9 Construction on Mill-3 will increase sulfide ore processing 7 from the current 3 mln. tons per year 6 to 8 mln. tons in 2008 5 9 Expansion of Vostochny and 4 Zapadny pits to enga
Slide 15: Olimpiada: Construction of Mill-3
OLIMPIADA: CONSTRUCTION OF MILL-3 9Mill capacity – 5 mln. tons of sulfide ore per year. 9Recovery rate – up to 88% 9Construction to be completed within 2 years 9Total investments - $337 mln. (including VAT)
Slide 16: Effective M&A in 2005
Effective M&A in 2005
Slide 17: Yakutia: New Assets
YAKUTIA: NEW ASSETS The ever largest acquisition in the Russian gold mining sector 9Completed on September 16, 2005. Kyutchus 9The total price of acquisition Nezhdaninskoe amounts to $285 mln. 9Total mineral resources of the YAKUTIA acquired assets – 28 135 k oz (comparable with of Sukhoi Kuranakh L
Slide 18: Yakutia: Investments Estimate
YAKUTIA: INVESTMENTS ESTIMATE Preparation of the feasibility study Kuranakh (production) for the mine fleet modernization and production facilities upgrade. $165 mln. Preparation of a new feasibility Nezhdaninskoe study (biooxidation technology to be (feasibility) applied). Construction of the mill.
Slide 19: Licenses Acquired in 2005
LICENSES ACQUIRED IN 2005 In 2005 Polyus acquired through auctions 6 mining and exploration licenses Krasnoyarsk Razdolinskaya area region Zyryanovskaya area Irkutsk region Mukodek area Amur region Bamskoe deposit, including Nevachansk prospective area Magadan region Degdekan area Vostochnaya (Tochi
Slide 20: Spin-off from NN: Unlocking Shareholders' Value
Spin-off from NN: Unlocking Shareholders’ Value
Slide 21: Independent Company: Advantages
INDEPENDENT COMPANY: ADVANTAGES 9Create a new gold major – undisputed Russian leader and one of the largest players in the international gold mining sector. 9Unlocking additional “gold” value for shareholders. 9Potential to increase the market value of the new company through: • High market premium
Slide 22: Ownership Structure
OWNERSHIP STRUCTURE CONTROLLING FREE FLOAT (ca 45%) SHAREHOLDERS (ca 55%) Inside NN Norilsk Nickel Polyus Russian Jenington (20% subsidiaries of Gold Fields) CONTROLLING New Company FREE FLOAT (ca 45%) SHAREHOLDERS (ca 55%) Polyus Gold Polyus Russian Jenington (20% subsidiaries of Gold Fields)
Slide 23: Key Transaction Dates
KEY TRANSACTION DATES ; Norilsk EGM unanimously voted for the spin-off 30 September of Polyus. 2005 Record date to receive Polyus Gold shares 1 January 2006 Organizational meeting of the new company - 3 March Polyus Gold 2006 State registration of Polyus Gold March 2006 Trading date for Polyus Gold