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Polus — Polyus Gold International — Renaissance Capital 16th Annual Investor Conference 2012
26 slides from Polus's conference presentation, Jun 26, 2012
Slide 1: Polyus Gold International
Polyus Gold International Renaissance Capital 16th Annual Investor Conference Moscow, 25–26 June 2012
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared using information available to Polyus Gold International Limited (“PGIL”) at the time of preparation of the presentation. External or other factors may have impacted on the business of PGIL and the content of this presentation, since its
Slide 3: Introduction: Key investment highlights
Introduction Key investment highlights 1 Established gold producer One of the top 10 gold producers globally Largest London-listed and CIS gold producer, Enhanced 6 Corporate Governance by production, reserve base and market 2 Extensive resource base capitalisation (US$9.6 bln1) 9 producing mi
Slide 4: Established gold producer
1 Established gold producer A major global gold producer and the largest producer in CIS Polyus Gold International – leading gold producer Primary CIS gold producers (2011 production) Largest Russian and London-listed pure gold producer moz Clear CIS leadership with the closest peer at only 54%
Slide 5: Established gold producer: Producing assets
1 Established gold producer Producing assets Olimpiada mine 38% Russia/ Krasnoyarsk region Titimukhta mine 7% Flotation-Bioleach process Blagodatnoye mine 24% Capacity: 8.0 mtpa Russia/ Krasnoyarsk region 2011 production: 566 koz Russia/ Krasnoyarsk region RIP cyanide leaching process CIP cyanide le
Slide 6: Extensive resource base: world's third largest gold reserves
2 Extensive resource base The world’s third largest gold reserves Recent reserve and resources update The world’s largest gold reserves1 Demonstrated track record to repeatedly upgrade reserve base moz 140 Recent MER reports further strengthen PGIL’s reserve base, 140 99 90 80 78 76 bolstering i
Slide 7: Extensive resource base: Top quality reserves
2 Extensive resource base Top quality reserves Average Au grade top 10 gold miners1 PGIL’s quality of reserves 2011 P&P g/t 2.4 53% of reserves were below 1.5 g/t 2.5 2.1 2.0 1.8 Weighted average below 1.5 - 2.0 2.0 - 2.5 2.5 - 3.0 over 1.5 1.2 global Top-10 P&P 1.5 g/t g/t g/t g/t 3.0 g/t total 1
Slide 8: Aim to double production by 2015
3 Sector-leading production growth profile Aim to double production by 2015 Significant production growth potential Strong production pipeline Gold Production (moz) moz PGIL production pipeline, 2011 – 20201 8.0 5.0 7.0 New projects 4.0 Panimba 6.0 Chertovo Koryto 3.0 Natalka² 5.0 Verninskoye 2.0 Ex
Slide 9: Demonstrated growth track record
3 Sector-leading production growth profile Demonstrated growth track record Fourth consecutive year of increased production 4 Large scale projects delivered successfully Commissioned in July 2007 at the Olimpiada mine Uses bio-oxidation technology to process sulphide ore Gold Production (koz)
Slide 10: Recent operational improvements supportive of growth ambition
3 Sector-leading production growth profile Recent operational improvements supportive of PGIL’s growth ambition Implementation of efficiency measures Ramp-up period completed between resulted in improvement in Feb and Jun 2010 and by Q3 2010 the recovery rate and increasing plant plant reached i
Slide 11: Key growth projects - Verninskoye: a new mine launched
3 Sector-leading production growth profile Key growth projects - Verninskoye: a new mine launched in Irkutsk region Commissioned in 4Q 2011 on plan Current status and future developments 1. Commissioned in 4Q 2011, on plan, delivering a large- 1 Plant commissioned on time, utilizing part of total
Slide 12: Key growth projects – Natalka: a world class mining asset
3 Sector-leading production growth profile Key growth projects – Natalka: a world class mining asset Capacity: 10 mtpa Phase 1 (approved) Au production: 0.5 mozpa 2014 – Grade: 2.1 g/t 2015 CapEx: US$1.1 bln in 2012 – 20131 Capacity: 20 mtpa Phase 2 Au production: 1 mozpa 2016 – Grade:
Slide 13: Natalka procurement schedule
3 Sector-leading production growth profile Natalka procurement schedule 2012 2013 As of 30 April 2012, the following mining 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q equipment has been procured: 1. Mining fleet Mining and transportation Bulldozers 9 Trucks 16 Drilling rigs Drilling rigs 22 Loaders 7 Crushing and conv
Slide 14: Natalka construction schedule
3 Sector-leading production growth profile Natalka construction schedule 2011 2012 2013 As of 30 April 2012, the following 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q construction equipment was already on site: Design and documentation 1. Bulldozers 23 2. Excavators 20 Procurement of materials and equipment
Slide 15: Clear path to deliver growth
3 Sector-leading production growth profile Clear path to deliver growth Total Natalka1 Chertovo Koryto Panimba/Razdolinskaya Impact: ~ 1.9 2014 2017 2016-2018 moz Unmatched 2014 Production: 500 koz pa Pre-feasibility study stage Pre-Feasibility study stage development 2016 Production: 1.0
Slide 16: FY 2011 results – increased recovery and gold output
4 Strong operational performance FY 2011 results – increased recovery and gold output Increasing recovery rates and gold output of 1,495 koz, 8% higher than in 2010 Recovery rate, % +7.8 pct -0.3 pct -0.1 pct +0.4 pct +4.0 pct +2.8 pct 1 84.5 84.1 83.8 85.2 85.1 83.4 83.8 76.7 73.6 77.6 90.0 66.4 69
Slide 17: 1Q 2012 results – improving recovery and increasing gold output
4 Strong operational performance 1Q 2012 results – improving recovery and increasing gold output Improving recovery rates and gold output of 328 koz, 27% higher than in 1Q 2011 Recovery rate, % +1.0 pct +1.1 pct +0.9 pct +13.7 pct +2.0 pct +3.8 pct1 -2.8 pct 84.5 85.5 85.8 86.9 86.8 100 84.7 85.6 83
Slide 18: Strong financial performance continued in 2011
5 Robust financial position Strong financial performance continued in 2011 Financial performance and policy Gold revenue and sales¹ Gold sales amounted to US$2,341 mln in 2011, up 37% US$ mln 2010 2011 Sales, koz compared to 2010 resulting from a combination of increased sales volumes and higher r
Slide 19: One of the highest dividend pay-out ratios among peers
5 Robust financial position One of the highest dividend pay-out ratios among gold mining peers Pay-out ratios of the global gold majors in 2011 50% 40% 34% 30% 25% 24% 23% 22% Average = 21% 18% 17% 16% 14% 13% 20% 10% 0% PGIL AngloGold Goldcorp Kinross Newcrest¹ Yamana Newmont Barrick Gold Fields Bu
Slide 20: Corporate actions
6 Enhanced Corporate Governance Corporate actions On 3 May 2012, PGIL announced that the dividend policy had been approved by the Board of Directors Dividend policy approved by the Since 2012 PGIL aims to pay annual dividends in the aggregate amount of a minimum of 20% of PGIL's net profit Board
Slide 21: Admission to premium listing on LSE
6 Enhanced Corporate Governance Admission to premium listing on LSE Rationale for obtaining Premium Listing Shareholder structure Raise PGIL’s global profile ONEXIM Free Float Nafta Listing platform for top international mining companies 40.22% 37.78% 22.00% Broadest and most extensive listed se
Slide 22: High profile, UK Corporate Governance Code compliant board
6 Enhanced Corporate Governance High profile, UK Corporate Governance Code compliant board Independent Ex-Chairman and CEO of Kinross Gold Corp, Non-Executive Robert Buchan Chairman and CEO of Elgin Mining Inc., Chairman Executive Chairman of Allied Nevada Corporation Senior Audit Committee; Nominat
Slide 23: Enhanced Corporate Governance: Management
6 Enhanced Corporate Governance Mr. Pikhoya was first appointed to PGIL’s Board of Directors in August 2009 German He has 17 years of industry experience and has held numerous positions including: Pikhoya General Director of OJSC Polyus Gold and CJSC Polyus; Deputy General Director for Strategy
Slide 24: Conclusion: Key investment highlights
Conclusion Key investment highlights 1 Established gold producer One of the top 10 gold producers globally Largest London-listed and CIS gold producer, Enhanced 6 Corporate Governance by production, reserve base and market 2 Extensive resource base capitalisation (US$9.6 bln1) 9 producing mine
Slide 25: Appendix
Appendix 25
Slide 26: 2011 results – financial highlights
Appendix 2011 results – financial highlights US$’000 2011 2010 Change, % Gold sales 2,340,650 1,711,298 37 Operating profit 838,654 582,144 44 1 Operating profit margin 35% 33% - Profit for the year 558,015 391,641 42 Earnings per share – basic and diluted (US cents) 16 12 33 Capital expenditure, ne
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