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Polymetal increases its interest in Tarutin to 100%

31 January 2017

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries – “Polymetal”, the “Company”, or the “Group”) is pleased to announce that it has fully consolidated its interest in LLC “Vostochny Basis” (licence holder for the Tarutinskoye copper deposit (“Tarutin”)) increasing its stake from 75% to 100%.

Polymetal has purchased an additional 25% from Gerosena Trading Ltd, the owner of the remaining stake in LLC “Vostochny Basis”, increasing the Company’s interest in Tarutin to 100%. The consideration comprises US$10 million payable by 893,575 newly issued Company shares (“Consideration Shares”, 0.2% of Polymetal’s issued ordinary share capital post this transaction). The

Consideration Shares quantum was calculated by dividing the consideration by Polymetal's closing share price on the day prior to completion.

Tarutin is a conventional copper-gold skarn deposit that is an excellent fit with Polymetal’s processing hub strategy. It is expected to provide an open-pittable and easily accessible ore feed for the Varvara flotation plant located in Kazakhstan, 150 km by road from the mine site.

A reserve estimate for the deposit is expected in Q3 2017, with mining planned to commence in 2018 with the goal to deliver and process up to 300Kt of ore at Varvara in order to produce 4-5 Kt of copper per annum in FY2018-2020. The initial investment is expected to be less than US$5 million as the mine fleet will be transferred from Polymetal’s existing operations.

The Tarutin licence plot covers an area of 1.8 km2 in the Chelyabinsk region, 28 km from the town of Chesma (population of approximately 7,000). The infrastructure in the region where the licence area is located is well developed with a railway station located 20 km from the deposit.

The Ore Reserves in accordance with the JORC Code (2012) are estimated as follows:

Tarutin Ore Reserve estimate, as at 1 January 2016

   Tonnage  Grade        Content  
 Ore Reserves  Kt  Au (g/t) Ag (g/t) Cu (%) GE (g/t)  Au (Koz) Ag (Koz) Cu (Kt) GE (Koz)
 Probable  890  0.1  13  1.62  3.3  3  359 14.4 93

Note: Ore Reserves in accordance with the Company's ownership equal to 100%. Metal prices used for the estimate: Au = US$1,100/oz, Ag = US15.0/oz, Cu = US$5,000/t

“We have decided to consolidate 100% ownership over Tarutin as it is a natural close fit for our Varvara hub and enhances its copper reserve base” – said Vitaly Nesis, Group CEO of Polymetal. “Tarutin is expected to start providing cash flows in the near term”.

Аn application has been made to the London Stock Exchange and UKLA on the official list and the Consideration Shares are expected to be admitted to trading on the London Stock Exchange on 2 February 2017. Following admission, the total issued share capital of the Company will comprise 429,155,913 ordinary shares of no par value, each carrying one vote.

Enquiries

Media

Investor Relations

FTI Consulting
Leonid Fink
Jenny Payne

+44 20 3727 1000

Polymetal
Maxim Nazimok
Evgenia Onuschenko
Maryana Nesis

ir@polymetalinternational.com

+7 812 313 5964 (Russia)

+44 20 7016 9503 (UK)

Joint Corporate Brokers

Morgan Stanley
Sam McLennan
Richard Brown

+44 20 7425 8000

RBC Europe Limited
Tristan Lovegrove
Marcus Jackson

+44 20 7653 4000

 

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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