POLY.L Regulatory News (POLY)

Polymetal International plc

Q1 2013 production results

Polymetal International plc (LSE: POLY) (together with its subsidiaries, including JSC "Polymetal" - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's production results for the first quarter ended March 31, 2013.

HIGHLIGHTS

·; The Company continued to deliver a stable operational performance in the first quarter of the year. Total gold equivalent production was 235 Koz, up 16% compared to the first quarter of 2012.

·; Metal sales lagged production due to the increase in metals at refineries during public holidays in Russia during the quarter. Total sales were US$ 341 million, with an average realised gold price of US$ 1,629/oz (down 4% year-on-year) and silver price of US$29/oz (down 7% year-on-year).

·; Quarterly gold production was 121 Koz, up 20% year-on-year driven mainly by additional contribution of gold production at the Amursk POX plant of 13 Koz during the period. Quarterly silver production was 6.4 Moz, up 14% year-on-year as a result of continuous improvement in grades and recoveries at Dukat.

·; The Company is making good progress on the implementation of corrective measures at the Amursk POX plant. While daily concentrate throughput continues to be limited before the planned 6-week shutdown in May-June 2013, a gradual increase in recoveries has been achieved, with the current performance in April of 81-82% compared to 75% in Q1 on average. In the meantime, Polymetal has successfully renewed the Albazino concentrate off-take agreement and will resume sales to 3rd-party off-takers in May.

·; Polymetal re-confirms its 1.2 Moz production guidance, after having significantly de-risked the achievement of the 2013 targets on the back of the timely start-up of the Mayskoye concentrator in April, successful renewal of the off-take agreement for Albazino, and Amursk POX ramp-up and remedial action plan progressing in accordance with schedule.

·; In response to material declines in gold and silver prices the Company has initiated the review of all discretionary capital spending including exploration projects. The results of this review will be published together with the Q2 production results. The projects likely to be delayed and/or re-engineered include Kutyn, Maminskoye, and the heap leach facility at Sopka.

"Thanks to an excellent performance at Dukat and the timely launch of the Mayskoye concentrator, we are on track to achieve our annual production guidance", said Vitaly Nesis, CEO of Polymetal, commenting on the results. "Polymetal is well positioned to withstand the current adverse metal price movements given our strategic preference for higher grade assets and intense management focus on cost control and efficient capital allocation".

CONFERENCE CALL AND WEBCAST

Polymetal will hold a conference call and webcast on Thursday, April 25, 2013 at 2:30 pm London time (5:30 pm Moscow time).

To participate in the call, please dial:

+7 495 221 6523, pin code 227004# (free from Moscow), or

+44 (0) 20 3043 2439 (free from the UK), or

+1 866 907 5925 (toll-free from the US), or

any of the above numbers (from outside the UK, the US and Russia), or follow the link:

http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=1977

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

Webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=1977 . A recording of the call will be available immediately after the call at +44 (0) 20 3367 9460 and +1 86 6907 5925, access code 281464#, from 6:30 pm Moscow time Thursday, April 25, till 6:30 pm Moscow time Thursday, May 2, 2013.

Enquiries

FORWARD-LOOKING STATEMENTS

THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED

DUKAT OPERATIONS

Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory (concentrate, precipitate)

Quarterly silver production at Dukat increased by 21% compared to prior year period ("year-on-year") driven by further improvement in throughput, grades and recoveries at the Omsukchan concentrator. Silver production was also up 18% compared to previous quarter ("quarter-on-quarter") mainly as a result of increased average grades mined at Goltsovoye.

Open-pit mining at Dukat has been fully completed. At Dukat underground mine, development accelerated by 32% year-on-year to nearly 8 thousand metres, and ore mined in Q1 grew by 4% year-on-year and 12% quarter-on-quarter, along with a further improvement in average grades.

At Goltsovoye, underground development accelerated and grew by 65% year-on-year, while ore mined grew more than six-fold due to successful implementation of drift-and-fill mining method, which has also resulted in meaningful reduction in dilution and, hence, improved average grades in ore mined.

At Lunnoye, ore mined in FY 2012 increased by 56% year-on-year, and by 33% quarter-on-quarter as the mining works are progressing at ore zone 7. At Arylakh, open-pit mining works are nearing completion with the result being lower stripping ratio and relatively high grades in ore mined. Underground development at Arylakh is expected to start in Q2 2013.

Ore processed at the main Omsukchan concentrator grew by 7% year-on-year and by 13% quarter-on-quarter, while silver recoveries stayed at a high level of 85.2%. This, combined with further improvement in grade profile in the feed from both Goltsovoye and Dukat, led to 25% growth in silver production year-on-year to 4.6 Moz. At Lunnoye plant, throughput was stable while average grade processed grew 12% quarter-on-quarter, resulting in an increase in silver production to 1.1 Moz, a 36% growth quarter-on-quarter.

KHAKANJA

Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory (precipitate)

Quarterly gold production at Khakanja was essentially flat while quarterly silver production decreased by 26%, and production in both gold and silver declined quarter-on-quarter, mainly as a result of the scheduled decrease in silver grades in pit 3 at Khakanja.

The last 5 Kt of ore was mined at Yurievskoye during the quarter and the decommissioning of the deposit has started. At Khakanja, open-pit mining continued at pit 3 at a declining pace due to depletion of the pit, with a slight decrease in average grades mined.

Ore mining at Ozerny has intensified, with stripping volumes and ore mined growing by 125% and 98% respectively quarter-on-quarter and stabilization of average grades. At Avlayakan, a growth of 76% was achieved for ore mined year-on-year, and the preparation for ore shipping in the navigation season is ongoing.

Throughput at the Khakanja mill remained stable at 150 Kt, while average grades continued to decline by 30% for gold and by 24% for silver quarter-on-quarter due to the lower grade ore from Khakanja and completion of processing of Yurievskoye ore, slightly offset by higher gold grade in ore processed from Ozerny.

VORO

Notes: (1) Heap leach recoveries are meaningful for full year only due to the influence of seasonality

(2) Including the effect of rounding

Quarterly gold production at Voro was up 18% year-on-year at 38 Koz, driven by the improved grade profile at the CIP plant and stable throughput. The average recoveries improved to above 80% due to more homogeneous ore feed after completion of processing of ore from Degtyarskoye.

The open-pit mine at Voro demonstrated stable performance in terms of both volume and grade. Mining in the first quarter traditionally focused on primary ore, with a solid improvement in average grade mined allowing to increase the average grade processed to 6.0 g/t.

VARVARA

Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory

At Varvara, gold production in Q1 was 25 Koz, flat at year-on-year, while copper production declined by 13% to 1,355 t driven by decline in average copper grade processed. The decline was partially compensated by a 10% increase in total volume of ore processed at the flotation circuit.

Stripping at Varvara accelerated by 37% year-on-year and by 21% quarter-on-quarter due to the commissioning of a new dragline to pre-stripping works at the southern pit. The volumes of ore mined for both float and leach circuits in the period were reduced in order to allow draw down from the stockpiles accumulated in prior periods.

OMOLON OPERATIONS

Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory

At Omolon, the quarterly gold increased by 2% year-on-year driven mainly by an 8% increase in throughput at the Kubaka mill.

At Birkachan, ore mined decreased by 17% quarter-on-quarter due to low temperatures in January limiting the mining equipment capacity. However, stockpiles accumulated to date allowed for the stability of the ore feed to the processing plant.

At Sopka, trucking of ore by winter road was successfully completed by the end of the quarter (with 320 Kt of high-grade ore trucked). Mining works at Sopka during the quarter were accordingly concentrated on high-grade ore, with ore mined growing 33% quarter-on-quarter.

At Tsokol, ore mined grew to 50 Kt, up 9% quarter-on-quarter, and the stripping ratios continued to decline.

ALBAZINO-AMURSK

Notes: (1) To concentrate

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production

(3) Included in total production upon sale to off-taker

Gold production at Albazino/Amursk was 13 Koz and is fully represented by the production of dore bars at the Amursk POX plant.

The amount of ore mined at Albazino grew 8% quarter-on-quarter. A total of 59 Koz of gold in concentrate was produced, up 86% year-on-year. The Company has successfully renewed the off-take contract, and the first shipments of concentrate to China are scheduled for May, with approximately half of the annual production to be derived from the 3rd-party concentrate sales.

The POX facility was successfully restarted in mid-January and the plant continues the implementation of remedial actions to improve throughput and recoveries. Throughput during the quarter was 21 Kt of concentrate and was limited by the unscheduled shutdown in January and further limitations imposed by frequent checks of corrosion in order to avoid equipment breakage. Average recoveries were 75% in Q1 on average, but with a tendency to improve by the end of the quarter to exceed 80%.

Arrival of new pipes and valves made of titanium is expected in mid-May, which will then be followed by a 6-week planned shutdown required to perform the replacement of the corrosion-prone parts made of Inconel. After the POX facility resumes operations in late June, Polymetal expects normalization of throughput to the design levels. The Company continues to target steady-state operation of the facility at design throughput and recovery in Q4 of this year.

MAYSKOYE

Full-scale stoping commenced at Mayskoye resulting in a big jump in ore mined during the quarter to 145 Kt.

The construction of the Mayskoye concentrator was completed in accordance with the amended schedule, and the full plant flowsheet was started up in the beginning of April. The ramp-up is progressing as planned and design parameters are expected to be fully achieved in October.

Polymetal is considering several options for concentrate off-take agreements. Final contracts are expected to be signed in the second quarter of 2013 with the first shipment occurring in the third quarter.