Polymetal International

Polymetal International plc is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan listed on the London Stock Exchange, Moscow Stock Exchange and Astana International Exchange. The company is a member of FTSE 100, FTSE Gold Mines and MSCI Russia. Polymetal has a portfolio of nine producing gold and silver mines and an impressive pipeline of future growth projects.

Polymetal continued to deliver on its strategy of building the long-term future of the Company, while generating significant free cash flow and creating value for its stakeholders.

Polymetal is a leading gold and silver producer with a high-quality, low-cost asset base.

Our portfolio comprises 9 producing assets and 3 major development projects across Russia and Kazakhstan. Our investments coupled with a rigorous approach to M&A activity are primarily focused on the turnaround of distressed assets, as well as under-explored near-mine areas with high potential that will contribute to significant long-term growth.

1998

Founded by the ICT Group (Alexander Nesis) in 1998 in Saint Petersburg, Polymetal was formed with an objective to build a highly professional Russian mining company that will capitalise on the opportunity to revive a series of inactive assets left over from Soviet era exploration using state-of-the-art technology at all stages, from exploration to bullion production. In the same year, Polymetal completes its first major acquisitions with the Voro, Khakanja and Yurievskoye gold and silver deposits.

1999-2002

During this period, on the back of preparations for the launch of our existing operations, Polymetal continues to grow its portfolio across Russia and acquires the Lunnoye silver mine in 1999 and the abandoned Dukat silver mine and concentrator in 2000. Open-pit mining commences at Voro (1999), one of our first greenfield projects, followed by the launch of a heap leaching circuit in 2000 and start of mining operations at Lunnoye (2000), Dukat (2001) and Khakanja (2002) deposits.

2003

Polymetal starts the year by launching the Voro expansion project followed by commissioning of the Khakanja processing plant in the fourth quarter. With this success, the company enters a new stage in its development. Meanwhile, Vitaly Nesis is appointed as our new CEO.

2004

Polymetal becomes the first Russian gold and silver producer to begin direct export of precious metals in line with obtained licenses from the Russian Ministry of Economic Development and Trade. In the same year, Polymetal records a prominent increase in production (gold production up 55% and silver 47%, compared with 2003) and a decrease in total cash costs below the global average. As a result, the company joins the ranks as a top Russian gold producer and one of the world’s leading silver producers.

2005-2006

Polymetal completes the construction and commissioning of the first generation of assets by forming base production units in key regions of operations. The company then proceeds with the formation of a new growth portfolio with a second generation of assets and acquires the Albazino exploration licence and enters into a Joint Venture with Ashanti Gold for the exploration of Veduga.

In November 2005, control over Polymetal was acquired by Nafta Moskva and 2006 Polymetal starts preparing to go public with an IPO on the Russian and international markets.

2007

Polymetal goes public with 24.8% of its shares on the London and Russian Stock Exchanges an important turning point which serves as proof of compliance with international standards of corporate governance, placing a quality mark on its portfolio of assets.

In addition, Polymetal fully meets its forecasted production for the year and maintains its position as the leading primary silver producer in Russia. The company launches expansion projects and the Dukat and Voro processing plants and continues to grow its portfolio of exploration licenses. A JORC-compliant reserve estimate is published and comprises 3.7 Moz of gold and 416 Moz of silver (9 GE Moz).

Business model

Focus on high-grade assets

Return on investment in the precious metals industry is reliant on grades and mining conditions. We achieve better returns and lower risks from our project portfolio by setting appropriate thresholds on head grades and largely focusing on open-pit mines.

Strong capital discipline

We engender a strong focus on capital discipline throughout the business; maximising risk-adjusted return on capital is our priority in all investment decisions. We do not retain excess cash and return free cash flow to shareholders through substantial dividend payments while retaining a safe leverage level.

Investing in exploration

Investment in both greenfield and near-mine exploration provides us with a cost-effective increase in our reserve base and, along with successful acquisitions, is the key source of our long-term growth.

Hub-based system

Our centralised hub-based system handles ores from different sources, achieving economies of scale by minimising processing and logistics costs, as well as capital spending per ounce. This facilitates production at otherwise uneconomical medium- and small-sized near-plant deposits.

Exemplary governance

We engender a strong focus on capital discipline throughout the business; maximising risk-adjusted return on capital is our priority in all investment decisions. We do not retain excess cash and return free cash flow to shareholders through substantial dividend payments while retaining a safe leverage level.

Operational excellence

We pride ourselves on our operational excellence and delivering on our promises to shareholders. Despite difficult trading conditions, we beat our production guidance for the fourth consecutive year.