REG-Polymetal International plc Polymetal: Far East and Arctic Development Fund and Credit Bank of Moscow will finance construction of grid power line for Nezhda project

Polymetal International PKAnnouncement

30/06/2020 07:00

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   Polymetal International plc (POLY)
   Polymetal: Far East and Arctic Development Fund and Credit Bank of Moscow
   will finance construction of grid power line for Nezhda project

   30-Jun-2020 / 09:00 MSK
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   Release time IMMEDIATE                         LSE, MOEX, AIX: POLY / ADR:
                AUCOY
   Date         30 June 2020

    

    

   Polymetal International plc

   Far East  and Arctic  Development  Fund and  Credit  Bank of  Moscow  will
   finance construction of grid power line for Nezhda project

   UVES LLC ("UVES"), an independent  grid management company, which will  be
   funded by Far East and Arctic Development Fund ("FEDF") and Credit Bank of
   Moscow ("CBoM"),  will  start construction  of  the grid  power  line  and
   substation for Polymetal's Nezhda project.

   THE PROJECT AND FINANCING STRUCTURE

   The power line will be built,  owned and operated by UVES, an  independent
   grid management company  led by an  experienced team with  a proven  track
   record  in  infrastructure  projects.  Upon  the  construction  completion
   scheduled for Q2  2022, the facility  will be leased  out to Polymetal  on
   pre-agreed terms.

   The project  CAPEX  to  be  incurred  by UVES  is  estimated  at  RUB  6.0
   billion 1  1  (approximately US$ 86 million, net of VAT), of which RUB 5.5
   billion will be  funded with the  FEDF's 10-year senior  loan and RUB  1.7
   billion with the CBoM's 5-year subordinated loan facility. Polymetal  will
   grant a guarantee for the FEDF  loan, as well as guarantee payments  under
   the lease agreement to UVES.

   The single-circuit 110 kV power line will run 254 km from Khandyga, 415 km
   east from Yakutsk,  to the Nezhda  production site. The  project is  fully
   permitted with construction set to start in July.

   STRATEGIC Rationale for the project

     • Cost savings:  grid  connection will  reduce  all-in power  cost  from
       approximately 16 to 10 RUB/Kw-h  compared to in-house generation  from
       diesel, which  translates  into  a  roughly  US$  40/oz  reduction  in
       Nezhda's TCC. Nezhda  annual energy  consumption is  estimated at  110
       GWh.
     • Meaningful decrease in environmental footprint:

          ◦ 75% reduction of equivalent Nezhda's CO2 emissions from 64 Kt to
            16 Kt per year, which implies a 4% decline in total Group's CO2
            emissions.
          ◦ Reduction of environmental accident risks related to
            transportation and storage of large diesel fuel volumes.

     • Benefits  from  further  down-the-line  power  intensive   improvement
       opportunities.

   "Grid power enhances the economics  of Nezhda and drastically reduces  its
   environmental footprint",  said  Vitaly  Nesis, Group  CEO  of  Polymetal.
   "Long-term project funding  from FEDF  supported by  a highly  experienced
   management team ensures successful execution of the project and allows  us
   to preserve our focus on the key business".

   "As one of the  largest Russian banks, we  fully understand our impact  on
   economic, social and environmental issues, and embrace responsibility that
   it implies. We are actively integrating sustainable development principles
   into  our  business,  prioritising  projects  that  generate  social   and
   environmental benefits,  such as  the  construction of  a power  line  for
   Nezhda, funded by the Far East  and Arctic Development Fund and us",  said
   Alexander Kaznacheev,  Deputy Chairman  of  the Board  of Credit  Bank  of
   Moscow.

   About Polymetal 

   Polymetal International plc (together with its subsidiaries - "Polymetal",
   the "Company", or the "Group") is a top-10 global gold producer and  top-5
   global silver producer with assets  in Russia and Kazakhstan. The  Company
   combines strong growth with a robust dividend yield.

    

    

   About FEDF 

   JSC "Far East and  Arctic Development Fund" is  a subsidiary of the  State
   Corporation "VEB.RF" (Bank for Development and Foreign Economic  Affairs).
   The fund implements prioritized  investment projects in  the Far East  and
   Arctic region by providing long-term preferential financing. On behalf  of
   the Russian Government, the fund  also develops digital services aimed  to
   increase promptness and transparency of interaction between the state  and
   business in  various  industries,  and  supports  small  and  medium-sized
   enterprises.

   Enquiries

       Media                          Investor Relations
                                  Polymetal   2 ir@polymetalinternational.com

   FTI Consulting                 Evgeny     +44 20 7887 1475 (UK)
                          +44 20  Monakhov
   Leonid Fink            3727                
                          1000    Timofey
   Viktor Pomichal                Kulakov    +7 812 334 3666 (Russia)

                                  Kirill      
                                  Kuznetsov
       Joint Corporate Brokers         
                          +44 20
                          7425
   Morgan Stanley & Co.   8000
   International plc
                                  RBC Europe
   Andrew Foster                  Limited
                           
   Richard Brown                  Marcus     +44 20 7653 4000
                                  Jackson
   Panmure Gordon
                                  Jamil Miah
   James Stearns
                          +44 20
                          7886
                          2500

   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.

    

    

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    3  1  Including G&A and contingency costs.

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   ISIN:          JE00B6T5S470
   Category Code: MSCM
   TIDM:          POLY
   Sequence No.:  72684
   EQS News ID:   1081829


    
   End of Announcement EQS News Service

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References

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