Slide 1: Corporate Presentation April 2020
¥= POLYUS > » CORPORATE PRESENTATION APRIL aean) 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 overview
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 64MOZ 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: ys POLYUS see
ys POLYUS see
Slide 7: ESG performance and safety
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 8: ESG ratings
71, “Outperformer” “outperformer on ESG issues compared to industry peers“ ESG Rating – “А” “a very strong [health and safety] management system“ Constituent of MSCI EM ESG “Lower rate of safety incidents than peers“ Leaders Index “Detailed ethics policies and extensive anti-bribery pr
Slide 9: Board and shareholder structure
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 Said Kerimov Free float 1 via PGIL
Slide 10: Share placements and investor base
Ca 9.0% of share capital sold PGIL sold ca 3.84% of interest 3 Eurobonds issues 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 11: Recent results
, RECENT RESULTS 6 ee ,
Slide 12: 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 13: 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 14: 1Q 2020 operating 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 15: FY2019 financial results
A 37% y-o-y increase in revenue was driven by higher gold sales volumes and higher gold price during the year. TCC increased 5% y-o-y to $365/oz mainly due to a decline in average grades in ore processed at Olimpiada and lower by-product credit from sales of antimony-rich flotation concentrate.
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Slide 17: Open-pit operator with high grades
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 1.7 2.0 1.0 1.2 0.8 1.0 120 0.7 100 96 0.0 71 64 80 -1.0 60 52 48 44 -2.0 40 24 24 21 -3.0 20 0 -4.0 Newmont Barrick Polyus Newcrest Gold Fields
Slide 18: Asset quality vs global peers
1,315 1,389 871 881 983 813 589 620 636 686 464 481 491 528 548 556 563 405 413 421 427 Natalka Kalgoorlie Negro Yanacocha Detour Kibali Lihir Pueblo Paracatu Blagodatnoye Olimpiada Ahafo Valley Veladero Goldstrike Boddington Herradura Sukari Tarkwa Carlin Tanami Cadia Cerro Viejo Lake La 1,200 1,00
Slide 19: Production vs peers
Newmont Barrick 7.2 6.3 Newmont 6.4 Goldcorp Newmont 5.1 Barrick 5.5 Barrick 5.1 5.6 Anglogold 4.1 Anglogold 3.3 Anglogold 3.25 3.45 Goldcorp 2.7 Polyus 2.84 Polyus ca. 2.8 Kinross 2.6 Kinross 2.5 Kinross 2.4 1 Newcrest 2.4 Newcrest 2.3 Newcrest 2.38 2.54 Gold Fields 2.0 Gold Fields 2.20 Gold Fields
Slide 20: Operating performance 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 21: 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 22: Project returns (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 23: Results of completed expansions
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 24: Generations of expansion projects
completed 1st generation 2nd generation 3rd generation execution
Slide 25: Olimpiada 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 26: Growth projects: Blagodatnoye, BIO and Chertovo Koryto
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 1H 2020 BIO-4 unit demonstrates higher recovery, throughput and decreased reagent consumption, compared to BIO 1,2,3 units BIO-3 moderni
Slide 27: Blagodatnoye expansion
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 28: Chertovo Koryto resources and pre-feasibility study
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 29: Olimpiada bio-oxidation and throughput
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 30: 2020 capex guidance
The introduction of new development projects. Other $120-135mln Verninskoye Mill expansion to 3.5 mtpa. KBU Further debottlenecking of the Natalka Mill. Sukhoi Log $250-260mln New stage of BIO facilities upgrade at Olimpiada. $35mln Engineering design works on Mill-5 at Blagodatnoye. Alluv
Slide 31: Digitalization and IT investment
Other Other Data transmission $5mln $8mln networks Data transmission $6mln networks Equipment and software ERP ERP $6mln for workstations $25mln $32mln Equipment and software $6mln for workstations $6mln IT infrastructure IT infrastructure $13 mln $2 mln 1 MES/LIMS/MMP MES/LIMS/MMP 1 $7mln $9mln G
Slide 32: 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 33: Exploration spending
2017 5 264 269 2018 122 391 513 2019 93 461 554 2020F 45 310 355 Sukhoi Log Other assets $64mln $63mln The Company anticipates to provide the update $47mln on Ore Reserves and Mineral Resources in 2020 $25mln 2017 2018 2019 2020F
Slide 34: POLYUS
POLYUS
Slide 35: Natalka ramp-up
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 36: Natalka mill debottlenecking
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 37: Natalka infrastructure
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 38: Ses?
a Ses? an ee POLYUS tS
Slide 39: Proximity to other 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 40: Russian gold production growth
120 111 113 111 Russian gold mine production saw 109 110 106 an 8% increase y-o-y in 2019. 103 100 The ramp up of Polyus’ Natalka (405koz in 2019) contributed to this 90 y-o-y growth. 2014 2015 2016 2017 2018 2019 10.3 8.1 2014 2019 Other gold producers 48% Polyus 52% Polyus has been the key d
Slide 41: Reserve and grade profile of Russian mines
30,000 1.6 1.31 1.34 1.30 1.30 1.28 1.26 1.24 1.22 1.20 1.18 1.16 1.14 1.12 1.09 1.06 25,000 1.1 Gold Grade (g/t) 20,000 17,614 Reserve (Mt) 17,415 15,000 17,046 0.6 15,899 10,000 14,681 13,470 12,272 11,116 0.1 5,000 9,986 9,022 8,161 7,385 6,687 6,057 5,510 0 -0.4 2016 2017 2018 2019 2020 2021 202
Slide 42: Sukhoi Log vs greenfield gold 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 43: Sukhoi Log vs large gold mines
63 66 48 50 50 42 31 33 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 Olimpiada 32 Olimpiada 2.8 Natalka 31 Muruntau 2.5 Mponeng 29 Lihir 2.3 Li
Slide 44: Development timelines of large gold projects
(MI resources at 50 moz of gold; PP reserves at 23 moz) 1980s 2006 2011 2017 2018 Evaluation of First Start of Casale Project Approval of the Casale and economic viability explorations Caspiche entered to RCA of Casale Caspiche came of the project explorations Environmental Project together into Ass
Slide 45: 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 46: Sukhoi Log processing flowsheet and study
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 1H 2020, followed by FS The estimates are based on the scoping study completed in 2018 which is
Slide 47: Sukhoi Log infrastructure: airport and power
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 48: Power grid infrastructure
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 49: Sukhoi Log pre-feasibility study
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 50: Absolute cost leadership
ABSOLUTE COST LEADERSHIP
Slide 51: Financial performance and cost comparison
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 52: Cost curve position
110% 100% 90% 82% 80% 80% 70% 73% 60% 49% 50% 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 53: Cost structure and currency exposure
Other Power 10% Labour 5% 30% 707 585 Fuel Below 11% 424 450 389 450 364 348 365 400 Tax on mining Consumables and spares FY13 FY14 FY15 FY16 FY17 FY18 FY19 Initial guidance Revised guidance 16% for 2020 for 2020 28% (Mar-18) (Feb-20) Consumables and spare parts split roughly equally on USD- USD U
Slide 54: Inflation in Russia
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 3.5%-4.0%. Tight control ove
Slide 55: POLYUS
POLYUS
Slide 56: Dividend policy
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 58: Debt maturity profile
Gross debt decreased to $4,565 2,118 million, compared to $5,086 million 1 31 as at the end of 4Q 2019. 1,251 1 Gross debt, including liabilities under 5 697 503 cross-currency and interest rate 459 swaps decreased to $4,938 million, compared to $5,054 million in the 2020 2021 2022 2023
Slide 59: Debt structure
Eurobonds Eurobonds 47% Bank loans 50% Bank loans 34% 38% $5,054 mln $4,938 mln Convertibles Convertibles 4% RUB bonds RUB bonds 4% 11% 12% 62% 38% 66% 34% Public debt Private debt Public debt Private debt Floating rate Floating rate 3% 4% $5,054 mln $4,938 mln Fixed rate Fixed rate 97% 96% 4.7% 4.6
Slide 60: 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 61: Guidance
Slide 62: Guidance overview
GUIDANCE OVERVIEW POLYUS ¢, ‘ 2019 2020F GOLD PRODUCTION 2.841 MOZ CA. 2.8 MOZ TCC OZ S365/ $400/0Z - S$450/0Z NEW CAPEX $630 MLN $700 MLN - $750 MLN) NEW 62
Slide 63: Appendix
APPENDIX ye POLYUS
Slide 64: 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 65: Operating data
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