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Investor proposition

Why invest in polymetal

We aim to generate superior total shareholder returns by

  • Growing our business without diluting its quality by investing in projects offering both high returns and optionality
  • Paying substantial dividends through the commodity and investment cycles

Since our IPO in 2011, Polymetal has managed to provide positive returns to shareholders, outperforming the vast majority of our peers and the FTSE Gold Miners Index and payingout more than US$ 1 billion in dividends.

Polymetal today
One of the industry’s highest reserve grades of 3.8 g/t and low cash costs
Industry-leading dividend yield of 4%
Highest production growth rates among EMEA gold peers in the next 3 years with an outstanding pipeline of growth projects
3-year average ROIC of 20% and 6-year average ROIC of 16%
Highest standards of corporate governance and sustainable development

The 5 differentiators

We have high-grade assets

Return on investment and the level of risk in the precious metals industry is widely reliant on reserve grades and mining conditions:

  • We apply high thresholds on head grade and focus on open-pit mining
  • We have one of the industry’s highest reserve grades of 3.8 g/t, ensuring resilience to commodity price fluctuations.
  • We keep our cash cost levels at the lower end of the cost curve
Average reserve grade (2P reserves)
g/t GE

Source: Company data. Gold, silver, copper proved and probable reserves as of 01.01.2017 GE at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios.

We have a proven track record of delivering on targets

Our success is a direct outcome of our operational excellence and a remarkable management team and a great reflection of our fundamentals:

  • We have delivered superior returns on capital (20% 3-year ROIC)
  • We have generated free cash flow in each year since our IPO in 2011
  • We have delivered an exceptional growth rate in the mining sector, increasing production twofold from 0.7 Moz of GE in 2011 to 1.4 Moz of GE in 2017 while meeting our production targets (CAGR of 10%)
Annual production based on 80:1 Ag/Au ratio
(Koz of GE)*

* Company historical gold equivalent guidance recalculated using 80:1 Ag oz/Au oz conversion ratio.

We impose strong capital discipline

With an overarching goal of delivering value to our shareholders, we impose strong capital discipline on all investment and financial decisions across the business.

  • We apply high IRR hurdle rates
  • We minimise our capital costs by employing a centralised hub-based system that handles ores from different high-grade sources.
  • We maintain comfortable leverage levels while directing FCF towards dividends and projects with high returns on invested capital
Pre-M&A free cash flow in 2012-2016,
US$ bn
Polymetal
Randgold
Fresnillo

Notes: Company data. Free cash flow (pre-M&A)

We grow our business without diluting is quality

Growth is an indispensable part of long-term value creation for our business:

  • We target 1.8 Moz of GE by 2020 by delivering the Kyzyl project in Q3 2018 — a unique 7-Moz high-grade deposit with 6.7 g/t gold reserve grade and a 22-year LOM
  • We have built an excellent portfolio of development projects in Russia with an average resource grade of XX that will drive our production growth beyond 2020
  • We continue to expand through exploration and the pursuit of high-optionality M&A targets
Gold production,
Koz of GE

Notes: GE at 80:1 Ag oz/Au oz, 1:5 Cu mt/Au oz and 1:2 Zn mt/Au oz conversion ratios.

We have best-in-class corporate governance

We strongly believe that maintaining high standards of corporate governance and sustainable development is essential in creating sustainable shareholder value:

  • Polymetal adheres to the highest standards of corporate governance since its original listing on London’s Main Market in 2007
  • We perform well on most ESG metrics and are part of FTSE4Good and STOXX ESG Leaders indices