Q3 2019 production results

Polymetal reports solid production results for the third quarter and nine months ended September 30, 2019.

“Continued strong performance at Kyzyl is driving our production dynamics. We now expect to exceed our full-year production guidance”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

• In Q3, the Company’s gold equivalent (“GE”) production grew by 7% year-on-year to 476 Koz driven by Kyzyl contributing 94 Koz. Following the successful completion of several improvement projects, Kyzyl concentrator achieved steady-state throughput of 2.0 Mtpa, 11% above the original design.

• Quarterly gold production gained 13% while silver output contracted by 20% on the back of 2018 asset disposals and planned grade decline at Dukat.

• GE production for the first nine months of 2019 increased 16% to 1,232 Koz. Polymetal is likely to exceed its full-year production guidance of 1,550 Koz by up to 50 Koz.

• Q3 revenue increased by 43% to US$ 656 million on the back of higher sales volumes and prices. The seasonal gap between production and sales has been closed.

• The Company notes cost increases from royalties driven by commodity prices yet maintains its cost guidance for 2019: TCC of US$ 600-650/GE oz and AISC of US$ 800-850/GE oz.

• Net Debt of US$ 1.7 billion as of 30 September 2019 remained largely unchanged compared to 30 June 2019. The Company generated significant free cash flow and paid a regular semi-annual dividend of US$ 94 million (US$ 0.20 per share).

• Construction and development activities at the Nezhda and the POX-2 projects continued on schedule.

• In Q3, Polymetal had its ESG ratings upgraded – MSCI ESG Ratings score improved from BBB to A, and ISS-Oekom Corporate Rating was raised to C+. Furthermore, the Company was reaffirmed as a member of the Dow Jones Sustainability Index and FTSE4Good Index Series.

Notes:     (1) Including discontinued operations.
               (2) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.
                (3) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au conversion ratios.
                (4) Calculated based on the unaudited consolidated management accounts.
(5) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2019 (for the three months period) and 31 December 2018 (for the nine months period).
                (6) LTIFR = lost time injury frequency rate per 200,000 hours worked.

PRODUCTION BY MINE

Notes:     (1) Based on 1:80 Ag/Au, 5:1 Cu/Au, 2:1 Pb/Au and 2:1 Zn/Au conversion ratios.

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Conference call and webcast

Polymetal will release the Group’s Q3 Production results on Thursday, October 24.

The company will hold a conference call and webcast on Thursday, 24 October 2019 at 12:00 London time (14:00 Moscow time).

To participate in the call, please dial:

From the UK:
44 330 336 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: 2360288

To participate in the webcast follow the link: https://webcasts.eqs.com/polymetal20191024. Please be prepared to introduce yourself to the moderator or register.

A recording of the call will be available immediately after the call at +44 20 7660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 8002 702 1012 (from Russia), access code 2360288, from 17:30 Moscow time Thursday, 24 October, till 17:30 Moscow time Thursday, 31 October, 2019.
Webcast replay will be available on Polymetal’s website (www.polymetalinternational.com) and at https://webcasts.eqs.com/polymetal20191024.