Polus · RUS:PLZL
Polus — Polyus Gold International — Investor Presentation (June 2014)
32 slides from Polus's investor presentation, June 2014
Slide 1: Polyus Gold International Investor presentation June 2014
Polyus Gold International Investor presentation June 2014
Slide 2: Investments highlight
Established Gold Producer Investments highlight 1 Established gold producer Strong corporate 6 Governance Polyus – largest gold producer in 2 Extensive resource base CIS (1.65 moz in FY13) Premium Listed on LSE 83 moz of P&P reserves (3rd in the 8th among Top-10 global gold world) with LOM o
Slide 3: A global major, largest in the CIS
Established Gold Producer A global major, largest in the CIS Leading gold producer Top-10 global gold producers in 2013, moz One of the leading gold producers globally 7.17 8th largest pure gold producer with 1.6 moz 5.07 production in 2013 4.11 2.67 2.63 2.36 4th highest production growth amo
Slide 4: Strategy targets
Established Gold Producer Strategy targets Strong operational profile Extensive reserve and resources base • Quality reserves development subject to Focus on the CIS as a home region which the leverage limits is rich in undeveloped resources • Remain a Top-10 global gold producer Focus on organic gr
Slide 5: Asset base and production contribution
Established Gold Producer Asset base and production contribution Polyus Gold headcount: 19.5 thousand people Russian Federation Natalka Blagodatnoye Titimukhta Olimpiada Kuranakh Verninskoye, 5% Titimukhta, 8% 89 koz Verninskoye 131 koz Alluvials Kuranakh, 8% 138 koz Olimpiada, 42% Alluvials, 12% 69
Slide 6: Sustainable Operating Approach
Sustainable Operating Approach Health, Safety, Environment and Community is a Board priority Strong framework established with external audit 33% improvement in LTIFR in 2013 PGIL BoD Committee established in 2011 with LTIFR1 Improvements from implementation of H&S management systems responsibil
Slide 7: Extensive Resource Base: Reserves and resources
Extensive Resource Base Top quality Reserves reserves and resources Recent reserve and resources update P&P reserves breakdown by mine Total: 83 moz, 2 g/t In June 2013 full JORC-compliant update of reserve base was completed Blagodatnoye, 9 moz, 2.2 g/t Total MI&I resources inclusive of P&P - 1
Slide 8: Financial Performance
Financial Performance
Slide 9: FY13 highlights
Financial Performance FY13 highlights 2013 2012 Change Gold production, koz 1,649 1,569 5% Average realised gold price, $/oz 1,385 1,666 -17% Total cash cost (TCC), $/oz 707 697 1% All-in-sustaining costs (AISC), $/oz 1,002 1,007 -1% Net debt/(cash), $mln 349 (680) N/A Net debt/EBITDA, x 0.4x (0.5x)
Slide 10: Gold market performance
Financial Performance Gold market performance Supply Global gold consumption in 2013, %1 Global gold production1 increased by 5% in 2013 to 3,019 t Strong production growth in Asia, Latin America and the CIS Central Banks net With an output of 220 t (up 1% y/y), Russia was 4th largest purchase
Slide 11: Mid-Term financial policy targets
Financial Performance Mid-Term financial policy targets Cost Position 1st quartile of the cost curve Prudent approach to capex allocation, aimed at Capex keeping balance between business growth and maximizing positive FCF Leverage Below 1x net debt/LTM EBITDA Free cash flow Commitment to FCF maximiz
Slide 12: Focus on maintaining conservative leverage
Financial Performance Focus on maintaining conservative leverage EOY13 net debt/EBITDA of 0.4x – one of the lowest Polyus and peers FY13 net debt/EBITDA, x in metals & mining universe 3.3 Internal target – to be below 1x ND/EBITDA 2.5 78% of debt portfolio is long-term debt 1.9 2.0 1.6 1.8 9
Slide 13: Competitive cost position
Financial Performance Competitive cost position Total cash costs in 2008 – 2013, $/oz All-in sustaining cash costs, $/oz, FY13 1,174 1,202 697 707 1,086 1,105 1,031 1,063 645 1,002 1,003 915 554 391 2009 2010 2011 2012 2013 Global gold majors’ impairments in FY13, $bln Polyus and peers 2013 EBITDA m
Slide 14: Operational Performance
Operational Performance 14
Slide 15: Key developments
Operational Performance Key developments Record annual gold production of 1,649 koz (+5% y/y) in 2013, production target achieved 6th consecutive year of organic growth in gold production Substantial y/y increase in gold production at Olimpiada (+6%), Titimukhta (+12%) and Verninskoye (+95%)
Slide 16: Olimpiada – the flagship mine
Operational Performance Olimpiada – the flagship mine Overview Location Krasnoyarsk region (Russia) Commissioned 1996 Mining/ Open pit, Flotation-Bioleach processing type Reserves 30.0 moz Processing 8.0 mtpa JORC Grade 3.3 g/t Life of mine 2060 The Olimpiada mine is the largest gold mine in Opera
Slide 17: Blagodatnoye – the lowest cost mine in the portfolio
Operational Performance Blagodatnoye – the lowest cost mine in the portfolio Overview Location Krasnoyarsk region (Russia) Commissioned 2010 Mining/ Open pit, gravity, flotation processing type cyanide leaching Reserves 9.2 moz Processing 6.0 mtpa JORC Grade 2.2 g/t Life of mine 2028 The ores of t
Slide 18: Titimukhta
Operational Performance Titimukhta Overview Location Krasnoyarsk region (Russia) Commissioned 2009 Mining/ Open pit, RIP cyanide leaching processing type Reserves 1.6 moz Processing 2.4 mtpa JORC Grade 2.2 g/t Life of mine 2022 The Titimukhta deposit contains quartz vein Operations 2011 2012 2013
Slide 19: Verninskoye: In full swing now
Operational Performance Verninskoye: In full swing now Overview Location Irkutsk region (Russia) Commissioned 2011 Mining/ Open pit, gravity, flotation and processing type cyanide leaching Reserves 4.4 moz Processing 2.2 mtpa JORC Grade 2.5 g/t Life of mine 2045 The mine was commissioned in Dec 20
Slide 20: Kuranakh: Optimizing production costs
Operational Performance Kuranakh: Optimizing production costs Overview Location Republic of Sakha (Russia) Commissioned 1965 Mining/ Open pit, RIP cyanide leaching processing type Reserves 2.7 moz Processing 3.8 mtpa JORC Grade 1.4 g/t Life of mine 2028 Ore is mined from numerous deposits in the K
Slide 21: Alluvials: The largest placer in Russia
Operational Performance Alluvials: The largest placer in Russia Overview Location Irkutsk region (Russia) Mining type Sands washing Reserves 1.3 moz Processing 10 mln m3 JORC Grade 0.7 g/t Life of mine 2033 Alluvial deposits are located in the Irkutsk Operations 2011 2012 2013 region near Bodaibo
Slide 22: Project Growth Profile
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Slide 23: Experience in delivering growth
Project Growth Profile Experience in delivering growth Continuing organic growth, koz 4 large scale projects delivered successfully Mill 3 commissioned in July 2007 Processing capacity: +5 mtpa Olimpiada expansion Commissioned in July 2010 Leveraged available infrastructure at Olimpiada 1,65
Slide 24: Natalka development
Project Growth Profile Natalka development Natalka deposit located in the Magadan region is the biggest gold deposit in Russia and 3rd largest globally. In 2011 Polyus obtained all the required approvals from local and federal authorities to commence construction of the mine. In 2013 5.317 mln m
Slide 25: Natalka geology
Project Growth Profile Natalka geology JORC audit conducted by Micon International in February 2012 Proven and probable reserves: o 613.8 mt o Average grade of 1.6 g/t o Contained gold 31.6 mln oz Measured and Indicated resources: o 773.3 mt o Average grade of 1.7 g/t o Contained gold 42.6 mln o
Slide 26: Natalka: reasons for re-sequence
Project Growth Profile Natalka: reasons for re-sequence Announcement and reasons to re-sequence Capacity: 10 mtpa throughput Stage 1 Gold production: 0.5 moz pa In Dec 2013 Polyus announced the decision to re- 2011–2015 Capex: $1.7-1.9 bln in 2011 – 2015 sequence the development of the Natal
Slide 27: Energy projects
Project Growth Profile Energy projects Peledui – Mamakan grid Razdolinskaya – Tayga grid Ust-Omchug – Omchak grid 2014 2014-2015 2016-2017 2014 2014-2015 2016-2017 Connects Viluyskie HPP with Connects Boguchanskaya HPP with The Grid is supposed to link Ust- Verninskoye and Chertovo koryto and
Slide 28: 2 brownfield expansions, exploration options
Project Growth Profile 2 brownfield expansions, exploration options Polyus obtains one of the richest resource bases globally with P&P Reserves of 83 moz (3rd in the industry) With Natalka to be commissioned in summer 2015 the company has optionality to develop further Polyus may consider 2 ma
Slide 29: Corporate Governance
Corporate Governance
Slide 30: Adherence to the highest standards
Corporate Governance Adherence to the highest standards The Board of Directors Shareholder and corporate structure Polyus Gold International Limited (Jersey) The Board of Directors acts in full compliance with the UK Corprorate Governance Code; Polyus Gold, as a UK Suleyman Kerimov premium listed
Slide 31: High profile, UK Corporate Governance Code compliant Board
Corporate Governance High profile, UK Corporate Governance Code compliant Board Ilya Yuzhanov Pavel Grachev Chairman of the Board and the Nomination Executive Director Committee Interim CEO Chairman of the Supervisory Board of OJSC Member of the Nomination Committee Alrosa Chairman of th
Slide 32: 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
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