PLZL.L Regulatory News (PLZL)

Press Release 20 March 2018

PJSC Polyus

Capital Markets Day, Corporate Update

PJSC Polyus (LSE, MOEX - PLZL) ("Polyus", the "Company"), the largest gold producer in Russia, is today hosting a Capital Markets Day for investors and analysts in London.

At the event, Polyus will present its updated strategy for the coming years, as well as an overview of the Company's current financial and operational performance.

Presenters will include the Independent Directors and top managers of Polyus:

· Edward Dowling, Independent Board Chairman

· Kent Potter, Independent Director

· Pavel Grachev, Chief Executive Officer

· Mikhail Stiskin, Senior Vice President, Finance and Strategy

· Vladimir Polin, Senior Vice President, Operations

· The Company's senior operational management

Commenting on the Capital Markets Day, CEO Pavel Grachev said:

"Polyus is one of the largest publicly-listed gold producers globally, and it is important for us to be available and fully transparent for the global investment community. We are very glad to be holding today's event at the London Stock Exchange, for the first time in this format. We have a strong investment story to present and are looking forward to sharing it with the market."

Production, Cost Guidance, Capex Update

· Following the ramp-up of Natalka and the implementation of debottlenecking initiatives at other operating assets, Polyus reiterates its production guidance for 2018 at the level of 2.375-2.425 million ounces and 2.8 million ounces in 2019. The Company expects to produce 2.8 million ounces in 2020.

· In the coming years, the Company's flagship assets Olimpiada and Blagodatnoye are expected to continue operating at the lowest cash costs among Polyus' assets. Besides that, Polyus plans to partially offset cost inflation via ongoing operational improvements across all operating assets. As a result, the Company sets its total cash cost guidance at below $425 per ounce for 2018 and below $450 per ounce for 2019 and 2020.

· The Company's capex programme is expected to reach its peak at about $850 million in 2018, reflecting the ongoing debottlenecking of operations and the finalization of the Natalka project. The Company expects capex to gradually decrease to about $650 million in 2019 and $550 million in 2020. As previously highlighted, the planned capex for 2018 includes $150 million of capitalized operational and interest expenses related to Natalka.

Projects Update

Polyus' mid-term priorities are related to the development and debottlenecking of its main production assets, as well as the ramp-up of Natalka and the development of Sukhoi Log.

· Olimpiada

o Mills expansion: By the end of 2020, Polyus expects to increase the throughput capacity at Olimpiada processing complex to reach 13.4 million tonnes per annum. To achieve this, Polyus plans to implement a complex set of small and medium-scale initiatives at the major processing circuits, including ore feed optimization via Mine-to-Mill technology, equipment modernization, introduction of flash flotation technology, BIO modernization etc.

o Antimony project: Olimpiada's Vostochny pit has reserves of high-content antimony ore. Polyus plans to start selling Au-Sb flotation concentrate on the global market. By separating the processing of low content and high content antimony ore, Polyus plans to increase recovery at Olimpiada's Mill 2 and Mill 3.

· Blagodatnoye

o Mill expansion (stage 2): By the end of 2019, the Mill's capacity is expected to reach 9.0 million tonnes per annum. To achieve this, Polyus plans the full roll-out of the Mine-to-Mill technology, and modernization of grinding and gravitation/flotation equipment.

· Kuranakh

o Mill expansion (stage 3): By the end of 2019, the capacity of the Mill is expected to reach 5.8 million tonnes per annum. The project mainly consists of small-scale capex-light processing circuit debottlenecking initiatives.

· Natalka

o The entire processing flow sheet is fully operational.

o A 72-hour consecutive trial run was successfully carried out in January 2018.

o Natalka operates in a ramp-up mode at above 50% of design capacity, processing above 15 thousand tonnes of ore on a daily basis

o Production is expected to be fully ramped-up in the second half of 2018.

· Sukhoi Log

o Scoping study to be completed by mid-2018.

o Mineral resources estimate is expected in the fourth quarter of 2018.

o Updated mineral reserves number is expected in 2020.

o Pre-feasibility and feasibility studies to be completed by the end of 2020.

The Capital Markets Day presentation is available for downloading at Polyus' website www.polyus.com

A webcast of the event is available at http://www.polyus.com/en/investors/capital-markets-day/

Polyus

Polyus is the largest gold producer in Russia and one of the top 10 gold miners globally with the lowest cost position. Based on its 2017 Ore Reserves and Mineral Resources, the Polyus group ranks second by attributable gold reserves and gold resources among the world's largest gold mining companies.

The Polyus group's principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Sakha Republic (Yakutia).

Enquiries

Investor contact

Victor Drozdov, Director Investor Relations

+7 (495) 641 33 77

drozdovvi@polyus.com 

Media contact

Victoria Vasilyeva, Director Public Relations

+7 (495) 641 33 77

vasilevavs@polyus.com 

Forward looking statements

This announcement may contain "forward-looking statements" concerning Polyus and/or Polyus group. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus' and/or Polyus group's operations. Many of these risks and uncertainties relate to factors that are beyond Polyus' and/or Polyus group's ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.