POLY.L Regulatory News (POLY)

Polymetal International plc

Board approves special dividend of US$0.20 per share and refines dividend policy

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce that on 3 December 2014 the Board of Directors of the Company approved a special dividend of US$0.20 per share for the year ending 31 December 2014 and refined the policy for payment of regular dividends.

In accordance with the Company's dividend policy, the Directors of Polymetal, having considered the performance of the Group during the year to date, available free cash flows and future investment requirements, have resolved to pay a special dividend of US$0.20 per ordinary share, representing approximately US$84 million, which brings total declared dividends for the year to US$0.28 per share or US$118 million (representing an annual dividend yield of 3.0%1).

The Board determined that it is appropriate to return excess cash to shareholders and reinforce the Company's commitment to capital discipline. The decision was taken against the backdrop of continued significant devaluation of the Russian Rouble against the US Dollar and a strong operating performance across all mines which together have resulted in the increased free cash flow generation of the Group. The Board decision is also underpinned by the Company's robust liquidity position and comfortable leverage, which is expected to remain below 2.0x Net debt/ Adjusted EBITDA after payment of the proposed special dividend. Polymetal's projected capital spending in 2015 will be light and the Board has sufficient comfort that the Company has the requisite flexibility to finance the investment projects (including Kyzyl) going forward.

The special dividend will be paid on 23 January 2015 in US Dollars, with an option for shareholders to elect to receive the dividend in pounds sterling. Such election should be made not later than 22 December 2014. Payments in pounds sterling will be based on the US$/GBP exchange rate determined by the Company on 23 December 2014 and announced immediately thereafter.

EX DIV DATE: 18 December 2014

RECORD DATE: 19 December 2014

LAST DATE FOR CURRENCY ELECTION: 22 December 2014

PAYMENT DATE: 23 January 2015

The Company's issued share capital includes 420,819,943 ordinary shares.

The Company's current dividend policy is to pay out regular dividends in the amount of 30% of the Company's net earnings provided that Net debt / adjusted EBITDA is below 1.75x. The Board has re-emphasised that it remains at the Board's full discretion to act flexibly with regards to shareholder dividends should the self-imposed leverage covenant of 1.75x Net debt / adjusted EBITDA be exceeded.

Due to the significant movement in currency markets, the Board has decided that the target payout ratio of 30% of the Company's net earnings should be adjusted for non-cash foreign exchange gains/losses and impairment charges ("Underlying net earnings").

The amount of the final dividend for the year will be reviewed by the Board in due course in accordance with the refined policy and recommended to shareholders for their approval at the Annual General Meeting in 2015.

Hedging policy

The Board reviewed the Company's hedging policy and approved the continued application of the existing no-hedge approach going forward.

"We are pleased to declare the second special dividend in the Company's history which reaffirms our commitment to capital discipline and is a result of the solid operating and financial results of the Group achieved to date despite macroeconomic headwinds. We remain fully committed to the delivery of our development projects, while the refinement of our dividend payout ratio underscores our commitment to regular and sustainable cash distributions to our shareholders", said Vitaly Nesis, CEO of Polymetal

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1 Include the interim dividend of US$0.08 per share for 1H 2014 and the special dividend of US$0.20 per share. Based on average share price for the eleven months of 2014.

Enquiries

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