Slide 1: Corporate Presentation June 2020
¥= POLYUS > » CORPORATE PRESENTATION JUNE One ' rs
Slide 2: Disclaimer
The information contained herein has been prepared using information available to PJSC Polyus at the time of preparation of the presentation. External or other factors may have impacted on the business of Polyus and the content of this presentation, since its preparation. In addition all relevant in
Slide 3: Polyus
POLYUS
Slide 4: Asset base and production
Alluvials Kuranakh 5% 8% 6 Verninskoye 5 9% 4 3 Olimpiada 1 49% 2 Natalka 3 1 14% 7 8 5 6 4 Blagodatnoye 2 15% 7 Sukhoi Log 8 Chertovo Koryto 329 44 2,841 50 301 50 3,0 00 00 45 38 2,440 224 1,968 2,160 40 2,5 00 50 35 26 29 1,652 1,696 1,763 30 22 24 25 2,0 00 141 147 144 00 50 125 25 20 1,5 00 1,0
Slide 5: Gold major of choice
GOLD MAJOR OF CHOICE ' %e POLYUS USUAL DISTINCTIVE FEATURES LT TIER 1 ASSET BASE 6IMOZ P&P OF RESERVES @ ti TRACK RECORD OF INDUSTRY LEADING OPERATIONAL ESG ACHIEVEMENTS FOOTPRINT 72% GROWTH IN SUSTAINALYTICS SCORE: GOLD OUTPUT SINCE 2013 7V"OUTPERFORMER" DELIVERY ON PROMISES 6 VEARS AHEAD OF PRODUC
Slide 6: COVID-19 response measures
All operating assets sufficiently equipped with protection devices and sanitizers Daily medical checks and disinfection at all business units and offices Regular testing of all the employees on-site and in the incoming shifts Quarantine zones established at all operating assets Large part
Slide 7: COVID-19 testing and operational impact
The Company completed a broad-based testing campaign for COVID-19. The employees and subcontractors at Olimpiada who received positive test results for the virus were: isolated on-site with no or minor symptoms, with temporary isolation centers set up; transferred to regional hospitals with
Slide 8: Macro assumptions
*Macro assumptions: USD/RUB of 60, a gold price of $1,200/oz
Slide 9: Polyus
ys POLYUS see
Slide 10: ESG ratings and safety performance
MSCI has upgraded the Company's MSCI ESG rating from BBB to A Polyus experts gave their input to the development of the Global Tailings Standard by ICMM, UNEP and RTI CDP: Polyus improves score in Climate Change and Water Security, named among “frontrunners” in biodiversity disclosure Polyus
Slide 11: ESG ratings and emissions
CO2-e per tonne of ore processed 0.120 “Polyus's overall ESG‐related disclosure follows best practice, signaling strong accountability to investors and the public“ 0.108 “A very strong health and safety management system“ 0.087 0.073 “Robust initiatives to address environmental impacts from air, wat
Slide 12: Board of directors and shareholders
4 Independent Directors (incl. Chairman) out of 9 All 4 committees headed by Independent Directors Independent Directors professional experience covers: Natural Resources (Metals & Mining; Oil & Gas) Investments and Business Development Capital Markets 76.84% Said Kerimov1 22.33% Free fl
Slide 13: Share placements and investor base
Ca 9.0% of share capital sold PGIL sold ca 3.84% of interest 3 Eurobonds issued of Priced at US$33.25 per GDS Priced at US$38 per GDS $1.8 bln combined since 2016 (ca. $879mln in total) (ca. $390mln in total) Convertible bond issue of Free float above 16% Free float above 20% $250 ml
Slide 14: Recent Results
, RECENT RESULTS 6 ee ,
Slide 15: FY2019 performance vs FY2019 guidance
FY2019 PERFORMANCE VS FY2019 GUIDANCE GOLD PRODUCTION Tcc CAPEX PRODUCTION 2.84 Moz GUIDANCE 1 i-e— CA. 2.8 MOzZ $365/0Z TCC GUIDANCE —— YY yy $375/0Z $425/0Z $650 MLN $700 MLN
Slide 16: Track record of beating guidance
Initial guidance Guidance Initial guidance revised Guidance Guidance Guidance revised in 4Q’14 surpassed by 6% 6% upward in 4Q’16 surpassed by 3% surpassed by 2% surpassed by 1.5% Initial guidance Initial guidance surpassed by 5% surpassed by 11% 2,841 2,425 2,440 ca. 2,125 2,160 2,8
Slide 17: 1Q 2020 production results
Volumes of ore mined amounted to 18,226 kt, down 4% q-o-q. Volumes of ore processed decreased 7% q-o-q to 10,698 kt, primarily driven by lower processing volumes at Natalka, Olimpiada and Blagodatnoye. Recovery rate rose to 83.6%, reflecting higher recoveries at Olimpiada and Blagodatnoye. D
Slide 18: 1Q 2020 financial results
Revenue totalled $872 mln, down 32% q-o-q, driven by lower volumes of refined gold output from Olimpiada, Blagodatnoye, Natalka and Kuranakh as well as a seasonal slowdown in production at Alluvials. TCC increased to $394/oz. This reflects the lower average grade in the ore processed at Olimpiad
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Slide 20: Reserves and open-pit profile versus peers
100% open-pit operator with grades typical for Weighted average grade in reserves @ 1.6 g/t underground mining 3.8 200 4.0 180 2.7 2.8 3.0 160 140 1.7 1.8 2.0 1.0 1.2 0.8 1.0 120 0.7 100 96 0.0 71 61 80 -1.0 60 52 52 27 -2.0 40 24 25 22 -3.0 20 0 -4.0 Newmont Barrick Polyus Newcrest Gold Fields
Slide 21: Tier 1 assets versus global peers
1,305 1,389 881 963 984 598 669 703 421 442 452 456 481 519 548 556 334 340 405 Lihir Tarkwa Blagodatnoye Detour Veladero Kumtor Sukari Porgera Olimpiada Goldstrike Kalgoorlie Fekola Canadian Carlin Cortez Natalka Boddington Pueblo Cerro Negro Malartic Super Pit Viejo Lake 1,600 1,400 Olimpiada 1,20
Slide 22: Gold production versus peers
Barrick 7.2 Newmont Goldcorp 6.3 Newmont 5.1 Barrick 5.5 Anglogold 4.1 Anglogold 3.3 Goldcorp 2.7 Polyus 2.84 Kinross 2.6 Kinross 2.5 1 Newcrest 2.4 Newcrest 2.3 Gold Fields 2.0 Gold Fields 2.20 Polyus 1.7 Agnico Eagle 1.8 Sibanye 1.4 Polymetal 1.6 Harmony 1.1 Harmony 1.4 Source: Companies data
Slide 23: Operating KPIs by asset
1,334 1,335 1,017 1,075 1,093 1,088 1,213 1,218 1,241 1,302 1,6 00 110 .0 939 964 1,4 00 1,066 1,122 100 .0 1,0 00 853 855 110 .0 1,2 00 100 .0 800 1,0 00 90. 0 90. 0 800 600 88.2 88.7 80. 0 81.0 82.4 84.8 88.0 87.9 88.0 87.8 87.5 87.8 80. 0 80.1 80.7 600 75.9 79.3 70. 0 400 73.6 70. 0 400 60. 0 200
Slide 24: Mining fleet efficiency
135,489 24,473 30,813 67,641 12,255 23,839 2013 2019 2013 2019 2013 2019 67,802 45,297 35,967 21,766 2013 2019 2017 2019 16.2 70% 14.6 16.0 60% 11.0 10.9 10.9 11.2 12.0 14.0 50% 45% 12.0 40% 37% 34% 10.0 25% 8.0 19% 18% 30% 14% 6.0 20% 9% 8% 8% 4.0 10% 3% 2.0 0% - 2013 2014 2015 2016 2017 2018 2019
Slide 25: Project returns and IRR
Gold price in Jan-17 Gold price in Jan-19 Spot gold IRR, % 25 price Newmont/Harmony/ 20 Anglogold Polyus (15% at $1,200/oz) (20% at $1,050/oz) 15 Kinross (15% at $1,250/oz) 10 Polymetal (12% at $1,200/oz) Gold price, $/oz 5 950 1,050 1,150 1,250 1,350 1,450 1,550 Completed projects Polyus focuses
Slide 26: Expansion results by asset
Ore processed 9.2 mt 13.9 mt1 (+51%) Expansion Production 822 koz 1,389 koz (+69%) to 13.4 mtpa1 TCC $706/oz $293/oz (-58%) Completion: 2020 Incl. by-product credit from antimony sales Ore processed 6.8 mt 9.0 mt (+32%) Expansion Production 396 koz 421 koz (+6%) to 9.0 mtpa completed TCC $479/
Slide 27: Generations of expansion projects
completed 1st generation 2nd generation 3rd generation execution
Slide 28: Olimpiada throughput expansion
Capex-light debottlenecking of crushing, grinding, flotation and hydrometallurgy circuits. Feasibility study has been completed. Equipment procurement is underway. The Company continues construction works at the extension to the main building, where an additional grinding circuit will be ins
Slide 29: Blagodatnoye, bio-oxidation and Chertovo Koryto projects
1 2 3 Construction of an additional 6 mtpa mill on site Processing capacity Increase from 9.0 mtpa to 15 mtpa. Feasibility study is ongoing Completion in 2H 2020 BIO-4 unit demonstrates higher recovery, throughput and decreased reagent consumption, compared to BIO 1,2,3 units BIO-3 moderni
Slide 30: Blagodatnoye expansion options
Current open pit surface -20m (9 mtpa) -70m (15 mtpa) Reserve base (LoM > 23 years) allows Polyus to evaluate further expansion options for Blagodatnoye, which current processing capacity has reached 9 mtpa. The Company is now considering a construction of a new 6 mtpa mill (Mill-5), bringing Bl
Slide 31: Chertovo Koryto resources and reserves
In late 2018 Polyus entered the Pre-feasibility Study stage, which will include: Open pit modelling and mine schedule Category Tonnes (mt) Grade (g/t) Gold (moz) Preliminary engineering of the crushing and grinding Indicated 67 1.5 3.3 circuits Inferred 7.8 1.3 0.33 Total Mineral Evaluation
Slide 32: Olimpiada bio-oxidation performance
In 2019, Polyus continued expanding its processing capacities at Olimpiada, which resulted in higher ore processing volumes. Also, high temperatures in Krasnoyarsk region in 3Q 2019 alongside greater pyrite ore content had a negative impact on bio- oxidation efficiency and throughput. As a res
Slide 33: Revised capex guidance for 2020
The introduction of new development projects. $120-135 $250-260 Verninskoye Mill expansion to 3.5 mtpa. Other KBU Further debottlenecking of the Natalka Mill. $35 Sukhoi Log New stage of BIO facilities upgrade at Olimpiada. Engineering design works on Mill-5 at Blagodatnoye. $20 Alluvials
Slide 34: Digitalization and IT spending
$8mln $5mln Other $25mln Other $32mln ERP $6mln ERP Data transmission networks $6mln Data transmission networks $6mln Equipment and software for workstations $6mln Equipment and software for workstations $2mln IT infrastructure $7mln $13mln $9mln MES/LIMS/MMP1 IT infrastructure MES/LIMS/MMP1 GPS
Slide 35: Wireless communication infrastructure
Polyus is establishing wireless communication infrastructure at Olimpiada and Natalka to enable reliable data transfer from operating vehicles to the dispatch management system in control rooms. Bulldozer with wireless equipment
Slide 36: Exploration spending and reserve updates
2017 5 264 269 2018 122 391 513 2019 93 461 554 2020F 45 310 355 Sukhoi Log Other assets $64mln $63mln In 1H 2021, the Company expects to report $47mln revisions to Mineral Resource and Ore Reserve estimates for existing operations incorporating $25mln the results of the ongoing drilling programme
Slide 37: Polyus
POLYUS
Slide 38: Natalka performance
5,768 5,849 3,960 4,191 4,534 1,998 2,564 942 1,436 663 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 71.7% 71.4% 71.6% 72.3% 70.7% 62.9% 65.5% 65.1% 55.1% 37.9% 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 1,533 1,563 1,527 1,430 1,306 4,5 00 160 0 1,127 1,149 4,0 00 3,
Slide 39: Natalka debottlenecking initiatives
Introduction of the 4th stage of gravity concentration Transition to new milling balls at SAG and ball mills Expansion of the 1st stage of gravity concentration Installation of enhanced heat exchangers at ball and sag mills’ engines Commissioning of an additional CIC column Installation
Slide 40: Natalka infrastructure and power grid
Polyus The Grid is supposed to link Ust- commissioned Srednekanskaya HPP with Natalka, the assay increasing available power laboratory in 1Q capacity 2019 Grid length: 120 km Capex: RUB 7.9 bln (ca. 85% of state subsidy / ca. 15% self financing) Completion of construction in 2020 Polyus
Slide 41: Sukhoi Log
a Ses? an ee POLYUS tS
Slide 42: Sukhoi Log location and proximity to Polyus assets
Close proximity to other Polyus assets creates opportunities for: Optimisation of processing facilities and potential economies of scale Utilisation of existing infrastructure (including the Peleduy – Mamakan grid) Amenable to mining via large-scale open- pit operations
Slide 43: Global and Russian gold supply and reserves
First annual decline in global mine supply since 2008, 103 106 109 111 113 111 against steady growth in Russia. With 405koz of gold produced, Natalka contributed to an 8% y-o-y increase in Russian gold mine production. 8.2 8.2 8.4 9.0 9.5 10.6 Polyus has been the key driver behind the Russian
Slide 44: Sukhoi Log versus greenfield projects
106 106 58 63 41 45 28 35 19 20 Rosia Montana Far Southeast La Colosa Snowfield Reko Diq Donlin Norte Abierto Sukhoi Log2 KSM Pebble Goldrush 9.4 KSM 51 Buritica 9.4 Pebble 45 Evander 8.1 Sukhoi Log3 40 Salares Norte 4.8 Donlin 27 Golden Highway 4.3 Livengood 23 Lone Star 2.5 Casino 22 Courageous La
Slide 45: Sukhoi Log versus operating mines
63 66 48 50 50 39 31 32 34 34 8 Evander Tujuh Bukit Natalka Cadia East Obuasi Olimpiada Muruntau Mponeng Lihir Sukhoi Log South Deep Mponeng 11.7 South Deep 75 Evander 8.1 Cadia East 45 Obuasi 7.3 Sukhoi Log 40 South Deep 5.4 Natalka 36 Olimpiada 2.9 Mponeng 29 Muruntau 2.5 Lihir 25 Lihir 2.3 Olimpi
Slide 46: Development timelines of comparable projects
(MI resources at 50 moz of gold; PP reserves at 23 moz) 1980s 2006 2011 2017 2018 No update on First Start of Casale Project Approval of the Casale and further progress explorations Caspiche entered to RCA of Casale Caspiche came explorations Environmental Project together into Assessment Norte Abie
Slide 47: Sukhoi Log drilling programme
Geotechnical 10.5 km Hydrogeology 7.5 km Exploration 204 km In-fill drilling, Drilled flanks samples In-fill drilling 5.4 30 Combined with 318 km of historical drilling (1961-1993), total drilling at Sukhoi Log amounted to ca. 541 km. In 2020, Polyus plans to complete an additional 30 km of in-f
Slide 48: Sukhoi Log PFS and scoping study parameters
Run-of-mine Crushing Milling (2 lines x 15 mtpa) Gold Extraction SAG mill Ball mill Gravity Flotation Cyanidation Carbon-in-leach Smelting Electrowinning pebble crusher (SABC) PFS will be finalized in 2H 2020, followed by FS The estimates are based on the scoping study completed in 2018 which is
Slide 49: Sukhoi Log airport and power infrastructure
Polyus owns a 60% stake in a local center Existing electricity facilities enable airport, Bodaybo. Polyus to launch the construction at Sukhoi Log. Bodaybo is located 145 km south-west of Sukhoi Log. Polyus has already signed a contract with Federal Grid Company (FGC) for Airport runaway i
Slide 50: Power grid projects
Razdolinskaya – Taiga (RT) grid Ust-Omchug – Omchak (UO) grid Capex: ca. $110 mln Capex: ca. $130 mln Financing: bought out by Financing: the Federal Grid Company (FGC) in 2017 ca. 85% of state subsidy / ca. 15% self financing (tranches over a 10-year period) Construction timeline: Construction time
Slide 51: Sukhoi Log pre-feasibility study progress
Polyus continues to work on the Pre-Feasibility Study jointly with international engineering consultants. Development of geological, geophysical, hydrometeorological surveys were completed. Trade-off studies on throughput capacity and comminution circuits design are being finalized. Mineral re
Slide 52: Absolute Cost Leadership
ABSOLUTE COST LEADERSHIP
Slide 53: Financial and cost metrics versus peers
Total cash costs, $/oz 585 424 389 364 348 365 5% EBITDA adjusted, $ mln 1,018 1,278 1,536 1,702 1,865 2,680 44% EBITDA adjusted, margin % 45% 58% 62% 63% 64% 67% 3 ppts Capex,$ mln 525 268 466 804 736 630 (14%) FCF1, $ mln 227 279 563 361 455 1,195 2.6x Net debt / EBITDA adjusted, “x” 0.3 0.3 2.1 1
Slide 54: Cost position versus peers
110% 100% 90% 82% 80% 80% 70% 57% 60% 50% 49% 40% 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 Petropavlovsk Polymetal Polyus Highland Gold $/oz 1,500 1,250 1,000 750 Polyus FY’2019 AISC @ $594/oz 500 Polyus FY’2019 TCC @ $365/oz 250 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Slide 55: TCC structure and currency exposure
10% Other 707 6% 585 Power 29% Labour Below 424 450 450 389 394 13% 364 348 365 Fuel 26% 400 Consumables and spares 16% Tax on mining FY13 FY14 FY15 FY16 FY17 FY18 FY191Q'20 Initial guidance Revised guidance for 2020 for 2020 (Mar-18) (Feb-20) Consumables and spare parts split roughly equally on U
Slide 56: Inflation and cost pressures
2018 2019 30% 18% 16% 13% 14% 11.7% 12% 9% 10% 7% 7% 4.3% 3.0% 5% 1% PPI CPI Labor Diesel Sulfuric acid Tyres Calcium Sodium cyanide Russia -4.3% Russia fuel Hypochlorite According to the latest CBR forecast, 2020 inflation in Russia is expected to be in the range of 3.8%-4.8%. Tight control ove
Slide 57: Polyus
POLYUS
Slide 58: Dividend policy and yield
Payout: 30% of EBITDA Threshold for dividend policy: Net Debt/EBITDA < 2.5x 500 $462 mln 10. 00% 450 9.0 0% If Net Debt/EBITDA > 2.5x, BoD will exercise discretion 400 8.0 0% on dividends $340 mln $342 mln 350 $311 mln $296 mln 7.0 0% Semi-annual dividend payments 300 $264 mln 6.0 0% 250 3.7
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Slide 60: Debt maturity profile and net debt
Gross debt, decreased to $4,934 mln, 2,118 compared to $5,054 mln in the 1 31 previous quarter. 1,251 1 The estimated net debt position, 5 697 503 decreased to $3,056 mln 459 (31 Dec. 2019: $3,253 mln). 2020 2021 2022 2023 2024 The group’s liabilities under cross currency and interest rate
Slide 61: Debt structure
38% 47% 34% 50% Bank loans Eurobonds Bank loans Eurobonds $5,054 mln $4,934 mln 4% 4% Convertibles Convertibles 11% 12% RUB bonds RUB bonds 62% 38% 66% 34% Public debt Private debt Public debt Private debt 3% 3% Floating rate Floating rate $5,054 mln $4,934 mln 97% 97% Fixed rate Fixed rate 4.7% 4.6
Slide 62: S&P credit rating outlook
In January 2020, S&P revised its outlook on Polyus to Positive from Stable and reaffirmed the Company’s 'BB' Rating. S&P highlighted: moderate financial policy improved credit metrics S&P also expects that Polyus will continue delivering strong operating performance in 2020-2021 on the bac
Slide 63: Appendix
APPENDIX ye POLYUS
Slide 64: Peer production guidance for 2020
Newmont 6.4 Newmont 6.0 Barrick 5.1 5.6 Barrick 4.6 5.0 Polyus ca. 2.8 Polyus ca. 2.8 modest downside risk to production guidance for 2020 Anglogold 2.65 2.87 Anglogold withdrawn Kinross 2.4 Kinross withdrawn Newcrest 2.38 2.54 Newcrest 2.1 2.2 Gold Fields 2.28 2.32 Gold Fields 2.20 2.25 Agnico Eagl
Slide 65: Regional Investment Project tax regime
% % 8 30 6.0 20 6 20 4 4.8 4.8 10 10 10 10 10 2.4 2.4 3.6 3.6 10 2 1.2 1.2 0.0 0.0 0 0 0 0 0 0 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 RIP regime Base rate Regional Investment Project is a special tax regime, which allows Lower MET rate is applied at Lower MET r
Slide 66: Operating data tables
Total rock moved 000 m3 49,474 50,759 48,477 55,610 53,466 66,703 66,351 71,239 64,505 58,073 88,418 116,987 127,952 Stripping 000 m3 44,255 47,543 40,991 46,878 45,317 57,256 54,552 59,448 55,628 46,326 73,420 99,481 101,563 Stripping ratio m3/t 4.7 7.2 2.3 2.2 2.2 2.4 1.6 2.0 2.5 1.6 1.9 2.3 1.5 O