Preliminary results for the year ended 31 December 2020

In the light of recent developments, and in the interests of preserving shareholder value, the Board and the Special Committee have decided to consider all possible options available for divestment of JSC Polymetal and its subsidiaries.

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3 March 2021

Polymetal is pleased to announce the Group’s preliminary results for the year ended 31 December 2020.

“We are pleased to report record net earnings for the year amidst a challenging global backdrop. A strong operating performance, a favourable commodity price environment and stable cost performance underpinned a significant increase in the Group’s cash flow and dividends whilst achieving a material reduction in leverage. We also achieved our target of zero fatalities and have importantly been able to minimise the impact of the COVID-19 pandemic on our people, communities, and operations”, said Vitaly Nesis, Group CEO, commenting on the results.


  • In 2020, revenue increased by 28%, totalling US$ 2,865 million (2019: US$ 2,241 million). Average realised gold and silver prices tracked market dynamics and increased by 27% for both metals. Gold sales were 1,392 Koz, up 2% year-on-year, while silver sales were down 13% to 19.3 Moz, largely in line with production volume trends.

  • Group Total Cash Costs (“TCC”)1 for the full year were US$ 638/GE oz, down 3% year-on-year, and 2% below the lower end of the Company’s full year guidance of US$ 650-700/GE oz mostly due to a weakness in the Russian Rouble and the Kazakh Tenge which outweighed additional COVID-related costs and a price-driven increase in royalties.

  • All-in Sustaining Cash Costs (“AISC”)1 remained broadly unchanged from 2019 at US$ 874/GE oz, up 1% year-on-year and within the Company’s full year guidance of US$ 850-900/GE oz, as the Company has accelerated pre-stripping and mine fleet renewals against a backdrop of higher commodity prices.

  • Adjusted EBITDA1 was US$ 1,686 million, a 57% increase over 2019, driven by higher production volumes, higher commodity prices, and lower cash costs. Adjusted EBITDA margin increased by 11 p.p. and reached an all-time high of 59% (2019: 48%).

  • Net earnings2 were a record US$ 1,086 million (2019: US$ 483 million), with a basic EPS of US$ 2.30 per share (2019: US$ 1.02 per share), reflecting the increase in operating profit. Underlying net earnings1 increased by 82% to US$ 1,072 million (2019: US$ 586 million).

  • Capital expenditure was US$ 583 million3, up 34% compared to US$ 436 million in 2019 and 8% above guidance. As previously announced, the increase is mainly related to accelerated spending across the project portfolio in a bid to neutralise the impact of the pandemic on project schedules and an increase in capitalised underground development and pre-stripping, aimed at ensuring operational flexibility against the backdrop of heightened epidemiological risks. The Group is on track for development activities at both POX-2 and Nezhda.

  • Net debt1 decreased to US$ 1,351 million during the period (31 December 2019: US$ 1,479 million), representing a Net debt/Adjusted EBITDA ratio of 0.80x (2019: 1.38x), significantly below the Group’s target leverage ratio of 1.5x. The Company generated significant free cash flow1, which amounted to US$ 6101 million (2019: US$ 256 million), supported by a net cash operating inflow of US$ 1,192 million (2019: US$ 696 million).

  • In view of the strong balance sheet and underlying business performance in 2020, the Board has proposed a final dividend of US$ 0.89 per share (approx. US$ 419 million), which includes US$ 0.74 per share representing 50% of underlying net earnings for the 2H 2020 and a discretionary payment of US$ 0.15 per share adjusting the total dividend for 2020 for 100% of free cash flow for the FY 2020, in accordance with Polymetal’s revised dividend policy. This will bring the total dividend declared for FY 2020 to US$ 608 million (2019: US$ 385 million), which represents US$ 1.29 per share, up 57% compared to US$ 0.82 per share in 2019.

(1) The financial performance reported by the Group contains certain Alternative Performance Measures (APMs) disclosed to compliment measures that are defined or specified under International Financial Reporting Standards (IFRS). For more information on the APMs used by the Group, including justification for their use, please refer to the “Alternative performance measures” section below.
(2) Profit for the financial period.
(3) On a cash basis, representing cash outflow on purchases of property, plant and equipment in the consolidated statement of cash flows.

Financial highlights1



Change, %





Revenue, US$m




Total cash cost3, US$ /GE oz




All-in sustaining cash cost3, US$ /GE oz




Adjusted EBITDA3, US$m







Average realised gold price4, US$ /oz




Average realised silver price4, US$ /oz








Net earnings, US$m




Underlying net earnings3, US$m




Return on Assets3, %




Return on Equity (underlying) 3, %








Basic EPS, US$ /share




Underlying EPS 3, US$ /share




Dividend declared during the period5, US$ /share




Dividend proposed for the period6, US$ /share








Net debt3, US$m




Net debt/Adjusted EBITDA








Net operating cash flow, US$m




Capital expenditure, US$m




Free cash flow3, US$m




Free cash flow post-M&A3, US$m




(1) Totals may not correspond to the sum of the separate figures due to rounding. % changes can be different from zero even when absolute amounts are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. This note applies to all tables in this release.
(2) Excluding Kapan in 2019 (disposed in January 2019). This note applies to all tables in this release.
(3) Defined in the “Alternative performance measures” section below.
(4) In accordance with IFRS, revenue is presented net of treatment charges which are subtracted in calculating the amount to be invoiced. Average realised prices are calculated as revenue divided by gold and silver volumes sold, excluding effect of treatment charges deductions from revenue.
(5) FY 2020: special and final dividend for FY 2019 paid in 2020 and interim dividend for the 1H 2020 paid in September 2020. FY 2019: final dividend for FY 2018 paid in May 2019 and interim dividend for the 1H 2019 paid in September 2019.
(6) FY 2020: interim and final dividend for FY2020. FY 2019: interim, final and special dividend for FY2019.


  • There were 20 active cases of COVID-19 as at 1 March 2021 across the Group. We regret to report that five of our employees (four in 2020 and one in 2021) died of the COVID-19 or related consequences.

  • The epidemiological situation in the Company remains under control. Operations and development projects are unaffected so far.

  • Strict precautionary procedures which were previously implemented, including mandatory isolation of new arrivals and restrictions on meetings and travel, continue to be maintained at all production sites and offices. These restrictions are currently expected to continue into full year of 2021.

  • Polymetal provides comprehensive assistance in the voluntary vaccination of its employees and is currently awaiting for the Russian Sputnik-V vaccine to become widely available.

  • Polymetal continues to provide financial and operational support to healthcare facilities across all regions of its presence with US$ 3.4 million spent in 2020. The main areas of assistance include purchasing medical and diagnostic equipment and key supplies for local clinics.


  • There were no fatal accidents among the Group’s workforce or its contractors in 2020 (compared with two employee fatalities and one contractor fatality in 2019). Lost time injury frequency rate (LTIFR) among the Group’s employees decreased by 38% year-on-year to 0.12. In 2020, the Company started to use the DIS metric (days lost due to work-related injuries) as the main Health and Safety KPI. For the full year, DIS amounted to 1,583 days, a 10% decrease compared to 2019. Polymetal will also continue to report its LTIFR going forward.

  • The Company’s FY2020 gold equivalent output amounted to 1,559 Koz, a 4% increase y-o-y and 4% above the original production guidance of 1.5 Moz. Strong contribution from Kyzyl, Varvara and Albazino offset planned grade decline at Voro, as well as lower production at Svetloye.

  • Construction and development activities at Nezhda and POX-2 progressed on schedule despite significant challenges posed by COVID-related disruptions and slowdowns.

  • Our operational achievements are underpinned by the value that we place on environmental, social and governance (ESG) issues integrated into all areas of our business. In 2020, Polymetal was added to the Dow Jones World Sustainability Index (“DJSI”) for the first time and retained its place in DJSI Emerging Markets, as well as reaffirmed membership in FTSE4Good Index.

  • In 2020, as a part of our carbon transition strategy we have adopted Green Financing Framework and raised a US$ 125 million Green Loan with Société Générale to finance the transition. Our total green and sustainability-linked loan portfolio now reaches US$ 280 million, or 16% of the total outstanding debt.

  • In 2020, greenhouse gas emissions intensity reduced by 4%, attributing to energy efficiency initiatives, switching our mining fleet to electric vehicles, a shift from diesel to grid energy sources and green energy contracts.


  • In March 2020, Polymetal acquired a 9.1% stake in ThreeArc, 100% owner of the Tomtor project, through a US$ 20 million cash investment into newly issued share capital. The proceeds will be used to complete the Tomtor pre-feasibility study and initial JORC-compliant ore reserve and mineral resource estimate. Tomtor is one of the largest and highest grade rare earth elements (REE) projects in Russia and considered to be the highest grade development stage niobium (Nb) project globally.

  • In April 2020, VTB acquired 25.7% stake in Amikan from the existing minority shareholders for a cash consideration of US$ 36 million and invested US$ 35 million in cash in exchange for newly issued Amikan (Veduga) share capital resulting in VTB holding a 40.6% stake in the asset. These cash-in proceeds will be used to fund the Project’s ongoing exploration and development costs. As part of transaction VTB was granted a put option to sell its stake in Amikan to Polymetal under certain conditions, along with the similar call option granted to Polymetal. Both put and call options are to be settled in newly issued Polymetal shares.

  • In June 2020, Polymetal entered into a preliminary lease agreement to lease on pre-agreed terms the single-circuit 110 kV grid power line running from Khandyga to Nezhda production site and the related substation. The power line will be built, owned and operated by an independent grid management company. The construction will be funded with the Far East and Arctic Development Fund 10-year senior loan, guaranteed by the Group, and the Credit Bank of Moscow subordinated loan facility. The completion and commencement date of the lease is scheduled for second quarter 2022.

  • During 2020, the Group disposed of non-core assets (Irbychan Gold, PGGK and North Kaluga) with the total consideration amounting to US$ 32 million, including cash proceeds of US$ 23 million and deferred consideration of US$ 9 million.

  • Polymetal continued to further develop its cooperation with junior exploration companies in the regions of our presence. In 2020, the Group entered into four new strategic partnerships with total initial investment in joint ventures of US$ 10 million.


  • The Company reiterates its current production guidance of 1.5 Moz of GE for FY2021 and 1.6 Moz of GE for FY2022. Production will be weighted towards 2H due to seasonality.

  • TCC in 2021 is expected to be in the range of US$ 700-750/GE oz, while AISC is expected at US$ 925-975/GE oz. The expected increase over 2020 cost levels is driven by the assumed appreciation of the Russian rouble and Kazakhstan Tenge and increased domestic diesel fuel prices compared to 2020, as well as above-CPI inflation in the mining industry and full-year impact of COVID-related measures.

  • The Company will continue to prioritize timely project execution and stands ready to incur reasonable additional costs to avoid project schedule slippage. The guidance remains contingent on the Rouble/Dollar exchange rate and oil price.

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Polymetal will release the Group’s FY 2020 preliminary financial results on Wednesday, March 3.

The Company will hold a conference call and webcast on Wednesday, 3 March 2021 at 11:30 London time (14:30 Moscow time).

To participate in the call, please dial:

From the UK:
+44 (0) 330 336 9411 (local access)
0800 279 7204 (toll free)

From the US:
+1 929 477 0324 (local access)
800 458 4121 (toll free)

From Russia:
+7 495 646 9190 (local access)
8 10 8002 867 5011 (toll free)

To participate from other countries, please dial any of the local access numbers listed above.

Conference code: 9588333

To participate in the webcast follow the link:

Please be prepared to introduce yourself to the moderator or register.

A recording of the call will be available at 0 808 101 1153 (from the UK), 888 203 1112 (from the USA) and 8 10 800 2702 1012 (from Russia), access code 9588333, from 17:30 Moscow time Wednesday, 3 March, till 17:30 Moscow time Wednesday, 10 March 2021. Webcast replay will be available on Polymetal’s website ( and at

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