Q3 2021 production results

Polymetal reports solid production results for the third quarter of 2021.

“Start of production at Nezhda capped a solid Q3 performance. Polymetal’s portfolio of mines delivered results in line with the budget with the company firmly on track to meet its full-year production guidance”, said Vitaly Nesis, Group CEO of Polymetal.

HIGHLIGHTS

• There have been no fatal accidents during the first nine months of 2021 among Polymetal’s workforce (similar to 9M 2020). As reported previously, on July 18 a drilling contractor lost his life at the Saum open-pit mine. Accident response details can be found in the Health & Safety section of this announcement. There were no lost-time injuries in Q3.

• Q3 gold equivalent (“GE”) production decreased by 8% y-o-y to 437 Koz as results reverted to the mean from the all-time quarterly production record set in Q3 2020. GE output for nine months was down by 4% to 1,151 Koz driven by planned grade declines at Kyzyl, Svetloye and Voro.

• Russia is going through the fourth wave of the COVID pandemic with multiple daily highs set recently for both new cases and deaths. At Polymetal, the number of active cases rose to 72 as of the date of this press release. The epidemiological situation remains under control with operations and projects continuing undisrupted despite several localised outbreaks.

• COVID-related transportation restrictions at railway and seaports in China persist. However, the Company successfully shortened concentrate transit times by switching from bulk (boxcar) to container shipping. The lag between sales and production as well as excess working capital decreased significantly and are expected to be eliminated by the year-end.

• Revenue for the quarter declined by 7% y-o-y to US$ 819 million driven by lower gold and silver prices. 9M revenue reached US$ 2,093 million, up 4% y-o-y. Net debt marginally increased for the quarter to US$ 1.90 billion as the Company generated substantial free cash flows and paid an interim dividend of US$ 0.2 billion (45 cents per share).

• Nezhda produced first concentrate on October 16, two weeks ahead of the previously announced target date (November 1^st). The Company expects to reach the plant’s nameplate capacity and full design recovery by April 2022. POX-2 construction is progressing on schedule. All heavy equipment arrived on site and has been installed.

• In October, Polymetal received an ESG Risk Rating of 15.9¹ and was assessed by Sustainalytics to be at low risk of experiencing material financial impact from ESG factors. This is an improvement from the prior year rating of 20.3 (medium risk). Polymetal is now ranked by Sustainalytics within top 3 precious metals companies globally.

• The Company is on track to meet its full-year 2021 production guidance of 1,500 GE Koz. TCC and AISC guidance of US$ 700-750/GE oz and US$ 925-975/GE oz respectively is maintained. The cost guidance remains contingent on the RUB/USD and KZT/USD exchange rates.

• Polymetal will host its Analyst & Investor Day on November 8 in the format of a video webcast and conference call. The management will provide updates on mid-term production and CAPEX guidance as well as on the key development projects.

Note:
(1) https://www.sustainalytics.com/esg-ratings

OPERATING HIGHLIGHTS

Notes:
(1) % 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.
(2) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 31 June 2021 (for the three months period) and 31 December 2020 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.

PRODUCTION BY MINE

Notes:
(1) Based on 120:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2020 restated accordingly.

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CONFERENCE CALL AND WEBCAST

The Company will hold a conference call and webcast on Tuesday, 26 October 2021 at 10:00 London time (12:00 Moscow time).

To participate in the call, please dial:

From the UK:
+44 203 984 9844 (local access)
+44 800 011 9129 (toll free)

From the US:
+1 718 866 4614 (local access)
+1 888 686 3653 (toll free)

From Russia:
+7 495 283 9858 (local access)

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

Conference code: 785872

To participate in the webcast follow the link: https://mm.closir.com/slides?id=785872.

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

A recording of the call will be available at the same numbers and webcast link listed above within an hour after the call and until 2 November 2021.