Investor proposition

Why invest in polymetal

We aim to generate superior total shareholder returns by

  • investing in projects offering both high returns and optionality with the aim of growing our business without diluting its quality
  • paying substantial dividends through the commodity and investment cycles

Since our IPO in 2011, Polymetal has generated competitive returns for our shareholders, paying out more than US$ 1 billion in dividends. At the same time, Polymetal grew from an intermediate to a leading gold producer with more than 1.5 Moz of GE production. With a portfolio of high quality, long-lived assets and vast exploration upside potential, the Company is well positioned to deliver on long-term sustainable growth.

Polymetal today
Exposure to both near-term and long-term growth
One of the industry’s highest reserve grades of 3.9 g/t
Leading dividend yield in the gold sector of 5% in 2018
3-year average ROIC of 19% and 6-year average ROIC of 16%
Highest standards of corporate governance and sustainable development

The 5 differentiators

We aim to grow our business without diluting its quality

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

  • We target production of 1.85 Moz of GE by 2023 that will be mainly driven by Nezhda, a world-class deposit with 12.4 gold resources at 4.5 g/t and > 25-year LOM
  • We have an excellent portfolio of high-quality development projects in Russia containing resources of more than 18 Moz of gold equivalent that will drive our production growth beyond 2020
  • We continue to expand and unlock value through exploration, as well as high-optionality M&A targets
Gold production,
Koz of GE

1) Cold equivalent (GE) at 80:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios
* Includes recovery improvement and long-term 3rd party contracts

We pay competitive dividends

A key element of our strategy is the dividend, which we have consistently paid out since our 2011 IPO, returning more than US$ 1 billion to our shareholders.

  • Regular payout ratio of at least 50% of underlying net earnings on a semi-annual basis with a special dividend at the discretion of the Board
  • Leading dividend yield of 3.7% in 2017 among gold producers
Dividends per gold equivalent oz. for 2013-2017,

Source: Company data and Bloomberg.

We have disciplined capital allocation

With a goal of delivering high returns on investment , we impose strong capital discipline on all investment and financial decisions across the business.

  • We apply high thresholds on head grade and focus on open-pit mining
  • We apply high IRR hurdle rates
  • We minimise our capital costs by employing a centralised hub-based structure that allows us to process ores from various high-grade sources
  • We maintain comfortable leverage levels while directing all of our FCF towards dividend payouts and projects with high returns on invested capital
Pre-M&A free cash flow in 2012-2017,
US$ bn

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

We have a proven track record of delivering on targets

Our success and excellent track record of meeting our production targets is a direct outcome of our operational excellence and a remarkable management team:

  • We have delivered superior returns on capital (19% 3-year ROIC)
  • We have generated meaningful free cash flows in each year since our IPO in 2011
  • We have delivered an exceptional growth rate in the mining sector with a two-fold production increase from 0.7 Moz of GE in 2011 to 1.4 Moz of GE in 2017 (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 have transparent and effective governance

Polymetal strongly believes that a commitment to the highest standards of corporate governance and sustainability practices is essential in creating sustainable long-term shareholder value:

  • We have been operating in line with the highest standards of corporate governance since its original listing on London’s Main Market in 2007
  • We have a strong set of policies that commit us to leading environmental and social practices
  • We have improved substantially on all ESG metrics and have been included in the FTSE4Good and STOXX ESG Leaders indices
  • We are actively engaged with the communities around our operations and work hard to get their full support for our business