POLY.L Regulatory News (POLY)

Polymetal International plc

Q1 2022 production results and guidance update

Polymetal reports solid production results for the first quarter of 2022 and updated production and cost guidance.

"Devastating war in Ukraine and immense sanctions put tremendous pressure on Polymetal in Q1. The Company continues to operate safely and profitably and is fully focused on ensuring business continuity and long-term viability. It is with these objectives in mind that the Board was forced to postpone dividend decision and rationalize investment plans", said Vitaly Nesis, Group CEO of Polymetal. "The Board and management continue to actively explore options to adjust company asset ownership structure to preserve shareholder value and address the needs of other stakeholders".

HIGHLIGHTS

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 80:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2021 restated accordingly (120:1 Au/Ag conversion ratio was used previously).

(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 December 2021.

(5) LTIFR = lost time injury frequency rate per 200,000 hours worked.

PRODUCTION BY MINE

Notes: (1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2021 restated accordingly 120:1 Au/Ag conversion ratio was used).

CONFERENCE CALL AND WEBCAST

The management will discuss Q1 production results during the Analyst & Investor Day today at 11:00 London time (13:00 Moscow time). Please follow the link to join https://www.webcast-eqs.com/polymetal20220425.

Enquiries

Forward-looking statements

DUE TO THE RECENT MASSIVE DDOS ATTACKS, OUR WEBSITE MAY BE TEMPORARILY UNAVAILABLE, THOUGH WE WILL CONTINUE DISTRIBUTION AND PUBLISHING ALL OUR ANNOUNCEMENTS THERE. THEY WILL BE FULLY AVAILABLE WHEN THE SITE RETURNS TO NORMAL OPERATION.

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.

KYZYL

Note: (1) For information only; not considered as gold produced and therefore not reflected in the table representing total production. It will be included in total production upon shipment to off-taker or dore production at Amursk POX.

(2) To be further processed at Amursk POX.

In Q1, gold production at Kyzyl contracted by 8% as the mining was focused on the eastern part of the pit with lower grade (where historical underground workings are located), and due to concentrate stockpiling to form batches with sufficiently low arsenic content to be shipped to China. The inventory is expected to be drawn down in the following quarters.

DUKAT OPERATIONS

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

Dukat Q1 gold production was above the plan as the Company reached high-grade ore blocks at the Dukat mine. Silver output was lower in line with the budget.

At Primorskoye, the Company will be stockpiling ore to ship it by sea to customers during the navigation period in H2 2022.

Waste mined jumped y-o-y due to mining of crown pillar at the Dukat open pit.

VARVARA

Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore.

At Varvara, gold recovery at the leaching circuit improved by 4 p.p. y-o-y following flowsheet improvements. At the flotation plant, grade and recoveries increased driven by larger volumes and better quality of third-party ore.

Mine's gold production contracted y-o-y on the back of high base of Q1 2021 when significant work-in-progress was released.

ALBAZINO

Notes: (1) To concentrate.

 (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production after Dore production at the Amursk POX.

At Albazino, production decreased by 28% y-o-y on the back of depletion of high-grade Anfisa pit as well as negative recovery rate dynamics attributable to the increase of share of oxidised ore from Ekaterina mine.

Waste and ore mining volumes were higher driven by Kutyn and Farida development. Underground development advanced due to ramping-up of Ekaterina and Anfisa underground mines.

Kutyn construction progressed on schedule, the project is 80% completed. The Company expects heap leaching to start-up in Q3 2022.

AMURSK POX

Notes: (1) Purchased concentrates which are included in reportable production in the Albazino segment.

(2) For information only. Already accounted for in production at operating mines.

POX production was stable. The plant processed the first test batch of Nezhda's gold flotation concentrate demonstrating sufficient recoveries.

OMOLON OPERATIONS

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

Gold production at Omolon decreased by 16% y-o-y on the back of the planned decline in grade processed.

Waste mine jumped as the development of Burgali open pit progressed, while ore mining there will recommence in Q3 2022. Underground ore mining was higher due to above-the-budget associated ore volumes.

NEZHDA

At Nezhda, first concentrate was shipped to off-takers. The concentrator achieved design throughput on planned grade. Recovery remained lower than design by 3-4 percentage points as the Company targeted higher improved market liquidity for its products against the backdrop of further tightening in Chinese arsenic restrictions

VORO

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

At Voro, quarterly gold production contracted due to lower volumes of third-party and Pesherny feedstocks as well as a decrease in volumes processed.

Voro flotation plant construction is 70% completed. Start-up is targeted for Q1 2023

SVETLOYE

Gold production at Svetloye recorded a 30% y-o-y decrease on the back of stacking of stockpiled low-grade ore from depleted Lyudmila main pit. Full-year grade is expected to normalize.

Waste mined increase is attributable to development of a new pit at Lyudmila (Nadezhda - launched in 2021), new pushback (Stage 3) at the Emmy pit.

MAYSKOYE

Notes: (1) To concentrate.

(2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon sale to off-taker or dore production at Amursk POX.

(3) Gold produced from carbon at Amursk POX.

Gold in concentrate production at Mayskoye decreased on the back the planned grade decline. Full-year average grade is expected to be roughly stable y-o-y.

Mayskoye haulage project (ore transportation by conveyor) is on track for launch in Q3 2022. Paste backfill plant construction is postponed by one year due to supply chain challenges.

POX-2

At POX-2, construction of metal frameworks at the autoclave servicing area and slurry cooling section as well as sandwich panels' construction at the high bay area is in progress. Concentrate preparation equipment and vessels at slurry mixing neutralization areas are being installed. Thickener installation is ongoing. Foundation works for the CIL equipment and preparation for technological pipelines installation at the downstream section are in progress. Construction of 16 MW boiler house completed.

POX-2 is likely to experience a 6 month slippage from the original schedule mostly due to supply chain challenges and now is expected to fully ramp-up in Q2 2024.

SUSTAINABILITY, HEALTH AND SAFETY

No fatal accidents occurred among Group employees and contractors in Q1 2022 (none did in Q1 2021). Group's lost time injury frequency rate (LTIFR) decreased by 60% y-o-y to 0.10 (0.25 in Q1 2021). Three incidents resulting in lost time injuries occurred among Group employees and another three - among contractors, with all of the injuries classified as minor. Each incident was followed by proper investigations aimed at improving safety of workplaces.

In Q1, Polymetal published its Sustainability Performance Data 2021 (GRI and SASB) and climate report in accordance with TCFD, which accompanied the Integrated Annual Report 2021 for the year ended 31 December 2021.

Following the recent geopolitical developments, Sustainalytics has increased Polymetal's ESG Risk Rating from 15.9 (Low Risk) to 21.9 (Medium Risk), while MSCI ESG Ratings has downgraded Polymetal's ESG Rating from AA to B.