REG-Polymetal International plc Polymetal: Prognoz fast-track development approval

Polymetal International PKAnnouncement

26/08/2021 07:05

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   Polymetal International plc (POLY)
   Polymetal: Prognoz fast-track development approval

   26-Aug-2021 / 09:02 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 IMMEDIATE                                                        
   time    LSE, MOEX, AIX: POLY / ADR: AUCOY
   Date    26 August 2021

    

    

   Polymetal International plc

   Prognoz fast-track development approval

   Polymetal  announces  that  the  Board   of  Directors  has  approved   an
   accelerated  development  of  the  open-pit  mine  at  Prognoz  with   ore
   processing  at  the   Nezhda  concentrator.   First  payable   concentrate
   production is expected in Q3 2023.

   "The decision  to  process ore  from  Prognoz at  Nezhda  ensures  optimal
   allocation of  human and  financial capital  within Polymetal.  Fast-track
   development significantly reduces CAPEX requirements and project execution
   risks, while  bringing  cash  flows  forward  and  lowering  environmental
   footprint", said Vitaly Nesis, Group CEO of Polymetal.

   PROJECT HIGHLIGHTS

     • Conventional open-pit mining  will commence with  pre-stripping in  Q3
       2022, with first ore mined in  Q1 2023. The annual mine capacity  will
       amount to 250 Kt  of ore with average  grade of approximately 600  g/t
       silver (Ag).
     • Ore will be processed through the 2.2 Nezhda concentrator. Ag recovery
       to high-grade  clean silver-lead  concentrate is  expected to  average
       89%. Ore  will  be trucked  by  winter  road from  Prognoz  to  Nezhda
       production site (675 km) using contractors.
     • LOM payable  Ag  equivalent  (AgEq)  in  concentrate  is  expected  to
       comprise 120 Moz. Average annual payable AgEq production in  2023-2041
       is estimated at roughly 6.5 Moz with an average AISC of US$  13.8/AgEq
       oz.
     • The project's upfront  CAPEX to be  incurred is estimated  at US$  105
       million comprising US$ 20 million spending in 2021 for engineering and
       mine preparation  and  US$ 85  million  in 2022-2024,  which  includes
       investment in  mining fleet,  remote site  infrastructure, roads,  and
       pre-stripping.
     • Project  NPV 1  1   and  IRR  stand   at  US$  154  million  and   35%
       respectively at US$ 20/oz silver price  rising to US$ 323 million  and
       60% at US$ 25/oz price.

   RATIONALE BEHIND  PROCESSING AT  NEZHDA RATHER  THAN BUILIDING  PROCESSING
   FACILITY ON SITE

     • Moving first payable production at least three years earlier  enabling
       Polymetal to benefit from the favorable silver market.
     • Reducing project execution risks given remote location, harsh  climate
       conditions, and  likely acute  deficit  of personnel  and  contractors
       during the construction stage.
     • Lowering initial CAPEX  while maintaining attractive  unit cash  costs
       and thus driving higher returns and faster free cash flows.
     • Materially reducing environmental footprint:  20% lower GHG  intensity
       due to grid connection at Nezhda, 50% lower fresh water intensity.

    

   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.

   Enquiries

       Media                          Investor Relations
                                  Polymetal
                                              2 ir@polymetalinternational.com
   FTI Consulting                 Evgeny
                          +44 20  Monakhov   +44 20 7887 1475 (UK)
   Leonid Fink            3727
                          1000    Timofey     
   Viktor Pomichal                Kulakov
                                             +7 812 334 3666 (Russia)
                                  Kirill
                                  Kuznetsov
       Joint Corporate Brokers         
                          +44 20
   Morgan Stanley & Co.   7425
   International plc      8000

   Andrew Foster                  RBC Europe
                                  Limited
   Richard Brown           
                                  Marcus     +44 20 7653 4000
   Panmure Gordon                 Jackson

   John Prior                     Jamil Miah

   Rupert Dearden         +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  At 10% WACC.

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   ISIN:           JE00B6T5S470
   Category Code:  MSCM
   TIDM:           POLY
   LEI Code:       213800JKJ5HJWYS4GR61
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   120783
   EQS News ID:    1228968


    
   End of Announcement EQS News Service

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References

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