Slide 1: Corporate Presentation October 2020
¥= POLYUS > » CORPORATE PRESENTATION OCTOBER 2020 VES a .
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 portfolio and production history
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 29.4 (MEDIUM RISK) DELIVERY ON PROMISES 6 VEARS AHEAD OF PROD
Slide 6: COVID-19 response
All operating assets sufficiently equipped with RUB 1 bln fund established in a partnership with the protection devices and sanitizers Far East Development Fund (FEDF) to finance the Daily medical checks and disinfection at all business fight against COVID-19 in the Russian Far East. Polyus un
Slide 7: Macro assumptions
*Macro assumptions: USD/RUB of 60, a gold price of $1,200/oz
Slide 8: Polyus
ys POLYUS see
Slide 9: Safety and key ESG risks
Coronavirus: outbreak at Olimpiada contained; almost all external medical staff has left, only a small number remains there to help keep the situation under control Permafrost: unscheduled company-wide risk analysis of fuel and acids tanks safety performed in June Climate change: development o
Slide 10: ESG ratings and recognition
“Polyus's overall “A very strong “Robust “The company is “The only ICMM ESG‐related health and safety initiatives to noted for member and disclosure follows management address showing global top 25 best practice, system“ environmental particular mining signaling strong impacts from air, strength in
Slide 11: Climate risk assessment
In late 2019, we have launched pilot climate risk assessment of total gold output project. 35% produced in permafrost areas The project will include the mapping of climate risks, (except Olimpiada and Blagodatnoye) scenario analysis and capacity building, quantitative risk analysis. The project
Slide 12: Board of Directors and shareholders
In August 2020, the Board of Directors has established the new position of Senior Independent Director on the Board and has approved the appointment of Maria Gordon to this position. Edward Dowling was re-elected as the Chairman of the Board All of the Board Committees are chaired by Independe
Slide 13: Free float, GDS placements and indices
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 MOzZ 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 guidance delivery
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: 2Q 2020 production highlights
Volumes of ore mined amounted to 17,364 kt, down 5% on the previous quarter, driven by lower ore volumes mined at Blagodatnoye. Volumes of ore processed increased 10% q-o-q to 11,753kt, reflecting the start of heap leaching operations at Kuranakh and higher processing volumes at Natalka. Recov
Slide 18: 2Q 2020 financial highlights
Revenue totalled $1,157 mln, up 33% q-o-q. This was driven by higher volumes of refined gold output from almost all hard rock deposits, as well as the start of the washing season at Alluvials. At the same time, the average realised refined gold price was 8% higher q-o-q, at $1,723/oz. TCC decrea
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Slide 20: Open-pit operator with large reserves
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 and free cash flow per ounce
1,305 1,389 881 963 984 598 669 703 421 442 452 456 481 519 548 556 334 340 405 Detour Lihir Tarkwa Veladero Kalgoorlie Blagodatnoye Kumtor Sukari Porgera Olimpiada Fekola Goldstrike Canadian Carlin Cortez Natalka Boddington Pueblo Cerro Negro Malartic Super Pit Viejo Lake 1,600 1,400 Olimpiada 1,20
Slide 22: Gold production peer comparison
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: Ore processed and recovery by asset
1,378 1,241 1,302 1,334 1,335 964 1,017 1,075 1,093 1,088 1,102 1,6 00 1,213 1,218 110 939 1,066 1,122 853 855 1,4 00 110 1,0 00 100 1,2 00 100 800 1,0 00 90 90 800 600 85.4 88.2 88.7 88.5 80 81.0 82.4 84.8 88 87.9 88 87.8 87.5 87.8 80 80.1 80.7 600 75.9 79.3 70 400 73.6 70 400 60 200 60 200 0 50 0
Slide 24: Mining fleet and truck size
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 IRR and capital efficiency
Spot gold Gold price in Jan-17 Gold price in Jan-19 price IRR, % 25 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 projects results
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: Olimpiada expansion generations
completed 1st generation 2nd generation 3rd generation execution
Slide 28: Olimpiada debottlenecking
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, Natalka and Verninskoye 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 with Mill-5
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 scoping 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 32: Olimpiada processing and bio-oxidation
In 2020, Polyus continued expanding its processing capacities at Olimpiada, which resulted in higher ore processing volumes. 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 result, t
Slide 33: Capex guidance revision 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 investments
$8mln $5mln Other BT project $25mln Other BT project $29mln ERP $7mln ERP Data transmission networks $6mln Data transmission networks $9mln Equipment and software for workstations $6mln Equipment and software for workstations $2mln $9mln IT infrastructure 1MES/LIMS/ 1MES/LIMS/ IT infrastructure Main
Slide 35: Wireless communication infrastructure
Polyus is establishing wireless communication infrastructure at Olimpiada, Natalka and Kuranakh to enable reliable data transfer from operating vehicles to the dispatch management system in control rooms. Bulldozer with wireless equipment
Slide 36: Drones and remote control equipment
Polyus is actively introducing drones to improve efficiency of its mining operations. Drone applications include: Aerial surveying & 3D mapping Drill & blast planning Infrastructure inspection Mining equipment tracking Remote control mining equipment allows to enhance safety of Polyus’ opera
Slide 37: Exploration expenditure
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 38: Polyus
POLYUS
Slide 39: Natalka quarterly operating performance
5,768 5,849 5,823 3,960 4,191 4,534 2,564 942 1,436 1,998 663 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 71.7% 71.4% 71.6% 72.3% 70.7% 70.5% 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 2Q'20 1,533 1,563 1,527 1,484 1,430 1,306 4,5
Slide 40: Natalka mill improvements
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 41: 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) Main construction activities completed Pol
Slide 42: Sukhoi Log
a Ses? an ee POLYUS tS
Slide 43: Sukhoi Log 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 44: 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 45: Largest 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 46: Largest gold mines by reserves
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 47: Development timelines of large gold 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 48: Sukhoi Log drilling programme
Geotechnical 10.5 km Hydrogeology 7.5 km Exploration 204 km In-fill drilling, Drilled flanks samples In-fill drilling 26 33.7 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 33.7 km of i
Slide 49: Sukhoi Log PFS and process flowsheet
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 50: 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 51: 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 52: 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 53: Absolute cost leadership
ABSOLUTE COST LEADERSHIP
Slide 54: Financial results 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 55: Cost curve position and margins
110% 100% 100% 90% 80% 81% 70% 59% 60% 50% 48% 40% 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 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
Slide 56: Total cash cost structure
17% 24% Other Consumables and spares 707 5% 585 Power Below 424 450 389 394 9% 364 348 365 340 Fuel 400 18% 28% MET Labour FY13 FY14 FY15 FY16 FY17 FY18 FY19 1Q'20 2Q'20 Initial Revised guidance guidance for 2020 for 2020 (Mar-18) (Feb-20) Consumables and spare parts split roughly equally on USD-
Slide 57: Cost inflation in Russia
2018 2019 2020F 30% 18% 16% 16% 13% 14% 12% 9% 10% 7% 7% 4.3% 3.0% 3.7% 5% 4% 1% 2% 0% -5% -7% CPI Labor Diesel Sulfuric acid Tyres Calcium Sodium cyanide Russia fuel Hypochlorite According to the latest CBR forecast, 2020 inflation in Russia is expected to be in the range of 3.7% - 4.2%. Tight
Slide 58: Mineral extraction tax changes
The Russian Finance Ministry has recently announced initiatives to boost taxation on the non-oil mining sector Alrosa 8.0% (excluding gold). Polyus 6.0% Polymetal 6.0% The key rationale (as officially announced by the Finance Diamonds Norilsk Nickel 1.7% Ministry) is to “normalise payments made
Slide 59: 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 60: Polyus
POLYUS
Slide 61: Dividend policy and payments
Payout: 30% of EBITDA Threshold for dividend policy: Net Debt/EBITDA < 2.5x 500 $462 mln 10. 00% $435 mln 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
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Slide 63: Gross debt and maturity profile
Gross debt, decreased to $4,160 mln, compared to $4,934 mln in the 2,076 previous quarter. 3071 The estimated net debt position, 1,061 1 11 decreased to $2,506 mln 690 499 454 1 (31-Mar-2020: $3,056 mln). 56 31 2020 2021 2022 2023 2024 2025 The group’s liabilities under cross currency and
Slide 64: Debt structure
31% 53% 42% 45% Bank loans Eurobonds Bank loans Eurobonds $4,934 mln $4,160 mln 4% Convertibles 10% 13% RUB bonds RUB bonds 69% 31% 58% 42% Public debt Private debt Public debt Private debt 3% 4% Floating rate Floating rate $4,934 mln $4,160 mln 97% 96% Fixed rate Fixed rate 4.6% 4.7% Gross debt inc
Slide 65: 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 66: Appendix
APPENDIX ye POLYUS
Slide 67: Peer production guidance
Newmont 6.4 Newmont 6.0 Barrick 5.1 5.6 Barrick 4.6 5.0 Polyus ca. 2.8 Polyus ca. 2.8 confirmed Anglogold 2.65 2.87 Anglogold 2.8 2.86 confirmed Kinross 2.4 Kinross 2.4 confirmed Newcrest 2.38 2.54 Newcrest 1.95 2.15 Gold Fields 2.28 2.32 Gold Fields 2.20 2.25 Agnico Eagle 1.88 Agnico Eagle 1.68 1.7
Slide 68: Operating data by asset
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