POG.L Regulatory News (POG)

20 February 2019

Petropavlovsk PLC

Update on Temporary Bridge Loan to IRC

Petropavlovsk PLC (the "Company") wishes to notify that IRC Limited ("IRC"), a producer and developer of industrial commodities in which the Company is a significant shareholder (31.1%), has today made an announcement in connection with the temporary bridge loan provided by Petropavlovsk to IRC.

As set out in IRC's announcements made on 13 June 2018, 19 October 2018 and 19 December 2018 and its circular to shareholders, dated 23 July 2018, JSC Pokrovskiy Mine (the "Lender") entered into a temporary bridge loan with IRC on 13 June 2018 for the purposes of facilitating the repayment obligations of K&S under the ICBC Facility (the "Bridge Loan").

Further to IRC's announcement dated 19 December 2018, providing an update on the K&S refinancing arrangements, IRC expects to draw down on the Gazprombank Facility in March 2019 and will not be in a position to repay the Bridge Loan on 20 February 2019.

As set out in IRC's announcement dated 19 December 2018, the Lender's parent company, Petropavlovsk, is also participating in the refinancing in connection with the release of its obligations as guarantor of IRC's borrowings under the ICBC Facility.

Accordingly, Petropavlovsk has confirmed that it will not take any action or exercise its right to demand repayment of the Bridge Loan on 20 February 2019 provided that all amounts owing under the Bridge Loan are repaid in full by 21 March 2019 and provided also that IRC pays all related interest owing under the Bridge Loan and a fee in Russian Roubles equivalent to US$100,000 to the Lender in consideration for the waiver of the Lender's rights as set out above.

The independent directors of IRC consider that the terms of the waiver proposed by the Lender are fair and reasonable and on normal commercial terms or better and it would be in the best interests of IRC and its shareholders as a whole to comply with the terms of the waiver.

The full text of the announcement may be found on the website of IRC at www.ircgroup.com.hk

Enquiries

For more information, please visit www.petropavlovsk.net and www.ircgroup.com.hk or contact:

Cautionary note on forward-looking statements

This release may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this release and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the future price of gold, the Group's results of operations, financial position, liquidity, prospects, growth, estimation of mineral reserves and resources and strategies, and exchange rates and the expectations of the industry. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances [outside the control of the Group. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates may differ materially from those described in, or suggested by, any forward- looking statements contained in this release. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward looking statements contained in this release, those developments may not be indicative of developments in subsequent periods. A number of factors could cause results and/or developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, demand, supply and prices for gold and other long-term commodity price assumptions (and their effect on the timing and feasibility of future projects and developments), trends in the gold mining industry and conditions of the international gold markets, competition, actions and activities of governmental authorities (including changes in laws, regulations or taxation), currency fluctuations (including as between the US Dollar and Rouble), the Group's ability to recover its reserves or develop new reserves, changes in its business strategy, any litigation, and political and economic uncertainty. Except as required by applicable law, rule or regulation (including the Listing and Disclosure Guidance and Transparency Rules), the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Past performance cannot be relied on as a guide to future performance. The content of websites referred to in this announcement does not form part of this announcement.