Sale of North Kaluga

11 May 2020

Polymetal announces that it has agreed to sell North Kaluga property for US$ 13.5 million in cash and debt assumption plus royalty, which together represents a total transaction value of approximately US$ 27 million.

“We continue to advance our non-core asset disposals. The North Kaluga deal brings us some cash and retains exposure to commodity prices”, said Vitaly Nesis, Group CEO of Polymetal.

Polymetal has entered into a legally binding agreement to sell North Kaluga to North Kaluga Mining Limited. The transaction consideration consists of a US$ 10.7 million fixed upfront cash payment, 5% NSR and 50% royalty on excess revenue. Excess revenue is defined as actual revenue less base revenue, where the latter is potential revenue calculated based on actual grades and the following metal prices: Cu = US$ 5,500/t, Zn = US$ 2,310/t, Au = US$ 1,650/oz, Ag = US$ 18.7/oz. The fair value of the royalties is estimated at US$ 13.5 million1 as of the date of the agreement. Both NSR and the excess revenue royalty are capped at US$ 300 million. The new owner will also repay all debt owed by the North Kaluga’s license holder to Polymetal as at transaction completion date (US$ 2.8 million as of the date of the agreement).

ABOUT NORTH KALUGA

North Kaluga is a polymetallic deposit located in the Sverdlovsk region of Russia. The property’s mineral resources comprise copper, gold, zinc and silver, with most of the value attributable to copper and gold.

JORC-compliant reserves for underground mining stand at 212 Koz of GE at 12.9 g/t as at 01.06.2018. The asset was marked as non-core due to its small size, short life-of-mine and lack of spare capacity at the future flotation circuit at Voro.

(1) The Company’s estimate at 15% discount rate.

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Polymetal International plc (together with its subsidiaries — “Polymetal”, the “Company”, or the “Group”) is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan. The Company combines strong growth with a robust dividend yield.
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2019