Reserve and Resource update as at 1 January 2017

RNS Number : 3698Z
Polymetal International PLC
14 March 2017
 

Release time

IMMEDIATE

Date

14 March 2017

 

 

Polymetal International plc

Ore Reserves, Mineral Resources and Exploration update as at 1 January 2017

 

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to provide an Exploration update for the year ended 31 December 2016, and report its Ore Reserves and Mineral Resources as at 1 January 2017 in accordance with the JORC Code (2012).

2016 HIGHLIGHTS 

·      Polymetal's Ore Reserves decreased by 5% to 19.8 Moz of gold equivalent (GE) mainly due to mining depletion and a downgrade at Varvara which were partially offset by reserve additions from the new acquisition at Komar, Dolinnoye and an upgrade at Svetloye;

·      Mineral Resources (additional to Ore Reserves) increased by 29% to 16.5 Moz of GE, mainly driven by the acquisitions of Kapan and Komar, as well as the initial Mineral Resources estimates at Levoberezhny and Lichkvaz;

·      Mineral Resources (inclusive of Ore Reserves) at gold equivalent grew by 5% to 36.4 Moz;

·      The average grade in Ore Reserves decreased by 8% to 3.8 g/t GE mainly due to additions from Komar. The average grade for Mineral Resources decreased by 11% to 4.2 g/t GE, mainly as a result of additions from Kapan; 

·      In 2016, we continued to use conservative gold and silver price assumptions in our reserve and resource estimates, US$1,200/oz and US$16/oz, respectively (2015: US$1,100/oz and US$15/oz);

·      Exploration drilling volumes increased by 40% year-on-year to 324 km, as the Company expanded its scope of exploration to include newly acquired assets and joint ventures;

·      9 new licences were obtained over the course of 2016, bringing the total number to 86, of which 47 currently involve active exploration activities.                                                                                                                       

"In the course of 2016 we significantly strengthened the resource base of our operating mines and successfully advanced our long-term growth strategy." - said Vitaly Nesis, Group CEO of Polymetal, commenting on the results. "In 2017, we plan to focus on converting resource additions into reserves growth. The key elements of this plan involve initial reserve estimates at Nezhda and Kapan as well as material resource-to-reserve conversion at Kapan, Lichkvaz, Omolon and Komar." 

 

Ore Reserves and Mineral Resources summary(1)

1 January 2017

1 January 2016

Change



 


Ore Reserves (Proved + Probable), gold equivalent Moz

19.8

20.8

-5%

Gold, Moz

17.6

17.7

-1%

Silver, Moz

163.0

207.2

-21%

Copper, Kt

65.4

85.4

-23%





Mineral Resources (Measured + Indicated + Inferred), gold equivalent Moz

16.5

12.8

+29%

Gold, Moz

14.4

11.3

+28%

Silver, Moz

87.5

48.6

+80%

Copper, Kt

206.7

132.0

+57%

 

1)         Mineral Resources are additional to Ore Reserves. Mineral Resources and Ore Reserves of Lead and Zinc are not presented due to the immateriality and are not included in the calculation of the gold equivalent. PGM Mineral Resources are presented separately and are not included in the calculation of the gold equivalent.

Differences are due to rounding.

FY2017 OUTLOOK

In 2017, Polymetal will continue to invest in exploration with the goal to expand the pace and scope of drilling, as well as prospect evaluation. The key objectives are as follows:

·      To achieve resource-to-reserve conversions and resource upgrades at our brownfield projects with particular focus on shorter life-of-mine assets. At Omolon the focus will be on Irbychan and Yolochka; at Voro - on Saum and Tamunier; at Okhotsk - on Levoberezhny, Gyrbykan, and Maimakan-Kundumi; at Dukat - on Primorskoye;

·      To initiate a comprehensive exploration campaign at the deeper levels of Dukat with a goal to extend the scope of resource estimates at least 300 meters below current underground workings;

·      To produce an initial JORC reserve and resource estimate at Nezhda JV's Zone 1 and continue drilling on smaller, potentially mineralised zones;

·      To complete at least 25 km of diamond drilling at the Prognoz silver deposit;

·      To publish a JORC-compliant reserve estimate and a combined LOM plan for Kapan and Lichkvaz;

·      To complete a step-out drilling campaign at Komar and update the reserve and resource estimates for the deposit;

·      To continue step-out and deep-level drilling at Kyzyl.

 

Ore Reserves and Mineral Resources by metal, 1 January 2017

 

Ore Reserves

Mineral Resources




Gold

89%

87%

Silver

9%

7%

Copper

2%

6%

Total

100%

100%

 

 

Ore Reserves reconciliation, gold equivalent, Moz

 

Ore Reserves, 01.01.2016

Gold/silver price ratio change1

Depletion

Revaluation

Initial reserve estimates

Ore Reserves, 01.01.2017

20.8

-0.2

-1.5

-0.3

1.0

19.8

 

1)         Please refer to the Appendix for the gold equivalent conversion ratios and applicable methodology.

Mineral Resources and Ore Reserves as at 1 January 2017(1) 

Tonnage

          Grade

Content


Mt

         GE, g/t

GE, Moz

Mineral Resources





Measured

8.0

1.9

0.5

Indicated

34.6

3.4

3.8

Measured + Indicated

42.7

3.1

4.3

Inferred

78.2

4.9

12.2

Measured + Indicated + Inferred

120.9

4.2

16.5






 

Ore Reserves





 

Proved

61.5

2.6

5.2

Probable

98.9

4.6

14.6

Proved + Probable

160.5

3.8

19.8

 

1)         Mineral Resources and Ore Reserves in accordance with the JORC Code (2012). Mineral Resources are additional to Ore Reserves. Mineral Resources and Ore Reserves of Lead and Zinc are not presented due to the immateriality and are not included in the calculation of the gold equivalent.  PGM Mineral Resources are presented separately and are not included in the calculation of the gold equivalent.

Discrepancies in calculations are due to rounding.

 

 

 

Exploration areas and volumes (mine site exploration excluded) (1)

Drilling, km


2016

2015

Brownfield



Voro

13.7

17.5

North Kaluga

-

5.2

Voro flanks

1.9

3.1

Tamunier

6.2

6.9

Other

5.6

2.3




Varvara

75.8

62.1

Varvara

23.6

32.3

Tarutin

0.9

5.5

Dolinnoye

6.7

24.3

Komar

44.6

-




Dukat hub

51.3

38.2

    Dukat flanks

17.2

19.6

    Lunnoye flanks

13.8

-

    Primorskoye

11.0

5.0

Perevalnoye

-

10.0

Terem

4.7

1.5

Other

4.5

2.1




Albazino

27.9

16.0




Okhotsk hub

28.2

11.9

Khotorchan/Gyrbykan

7.0

2.8

Svetloye

0.6

3.6

Kirankan

1.6

2.3

Maimakan-Kundumi

2.5

-

Levoberezhny

8.3

0.2

Other

8.2

3.0




Omolon hub

32.8

16.3

Olcha

-

0.7

Oroch

1.7

-

Burgali

-

1.6

Yolochka

5.9

4.7

Irbychan

11.6

5.7

Nevenrekan

8.4

-

Other

5.1

3.6




Kyzyl project

10.5

45.6

Bakyrchik

5.7

36.1

    Bolshevik

4.9

9.5

Subtotal

240.1

207.6




Greenfield



Urals

6.2

8.3

Svetlobor (PGM)

0.1

2.4

Urals regional

6.1

5.9




North-West

12.8

-

Karelian PGM (inc. Viksha)

10.0

-

Other

2.9

-




Nezhda

39.4

-

Nezhda

39.4

-




Armenia

25.2

15.8

 Lichkvaz

24.0

15.8

    Other

1.2

-

Subtotal

83.6

24.1

Total

323.7

231.7

1)         Discrepancies in calculations are due to rounding.

 

 

EXPLORATION RESULTS

Dukat hub

·      17 km have been drilled at the near flanks of the Dukat property at the Khrustalny, Mglystiy and Smeliy ore zones. Following on from last year's exploration, additional ore bodies have been traced to the north at Khrustalny. In 2017, we plan to carry out prospecting activities at the deeper levels of Dukat to confirm the presence of a second horizon of mineralisation and other targets around the Dukat hub area.

·      At the Primorskoye property (250 km from the Omsukchan concentrator), 11 km of exploration drilling was carried out in ore zones 1 and 3, along with detailed metallurgical and geomechanical studies. A bonanza section with anomalous high grade content was identified (17.9 g/t for gold, 4700 g/t for silver), holding more than 60% of all resources of ore zone 1. Mineral resource estimate comprised 311 Koz GE at 19.6 g/t GE. In 2017, we plan to continue drilling in order to expand the resources and produce a JORC-compliant reserve estimate for the property in 2018.

Omolon

·      An increased reserve estimate of 213 Koz GE at 2.3 g/t GE at Sopka (180 km from Kubaka mill) was a result of revaluation which made feasible the restart of open-pit mining, now scheduled for 2017.

·      A resource estimate at the Central, Northern and Eastern zones of the Irbychan deposit (veinlet-disseminated mineralisation type) has been completed, with the feasibility study being prepared. We plan to issue an initial reserve estimate in 2017 with the goal to start open-pit mining at the property in 2H 2019.

·      At Yolochka (veined and veinlet-disseminated ore bodies of low-sulphide gold-silver formation), as a result of infill drilling (6 km), new rich ore zones were discovered on the western flank. Core drilling will continue in 2017 with an aim to expand the resource base and prepare for the reserve and resource estimate in 2017.

·      At Nevenrekan, 8 km of drilling was completed at ore zone 2, as well as zones 1 and 5. In ore zone 1, high-grade ore sections were discovered, which, with further exploration, are expected to increase the resource base of the property. Drilling will continue in 2017 with a goal to upgrade resources into higher categories and prepare for the reserve estimate in 2018.

Okhotsk

·      At Maimakan-Kundumi (a new property approx. 30 km from Avlayakan), as a result of 2.5 km of prospecting drilling, 3 ore bodies containing high-grade gold and silver mineralisation were identified. An initial mineral resource estimate for the property has been prepared and comprises 106 Koz of GE at an average grade of 13.7 g/t GE with further mineral potential estimated at 100-500 Koz of gold at an average grade of 6-15 g/t. In 2017, prospecting and evaluation activities will continue with 13 km of planned drilling.

·      Polymetal will continue exploration at areas adjacent to the Khakanja plant with the goal to expand its mine life. Further exploration potential is associated with Khotorchan and Gyrbykan (180 km from the Khakanja mill), where new ore intercepts have been identified. The anticipated mineral potential for the properties is estimated at 100-200 Koz of gold at average grades of 10-15 g/t. In 2017, prospecting and evaluation activities are set to continue.

·      At Svetloye, advanced exploration activities yielded an increase in reserves for the second consecutive year, adding 157 Koz of GE through positive mine-to-model reconciliation and additional step-out drilling.

·      Evaluation activities at Levoberezhny (35 km from Svetloye) yielded positive results, confirming its future prospects. An initial mineral resource estimate at the property comprises 378 Koz of GE at 4.2 g/t GE. Further metallurgical testing and exploration activities are set to continue in 2017 with a goal to gain approval on the feasibility study and prepare an ore reserve estimate.

Albazino

·      Exploration drilling at the Farida and Ekaterina 1 & 2 ore zones was mainly focused on the deposit to prepare ore bodies for open-pit mining. The Company continues to work on outlining ore bodies and on upgrading resource categories. In 2017, we will continue exploration works within the license area in order to establish new prospective ore bodies.

Voro hub

·      At the recently acquired Saum property with VMS-style mineralisation, we plan to perform metallurgical studies and near-deposit geophysics in 2017.

·      6 km of drilling has been completed at Tamunier, identifying 38 ore intercepts that meet the project targets. The traced mineralisation along strike is between 120 m to 800 m with the thickness varying between 0.5 m - 9.6 m, explored at a depth of 30-320 m. The average grade traced through the ore bodies varies from 1.02 - 23.0 g/t. In 2017, drilling aimed at outlining ore bodies will continue. A reserve estimate is expected in 2017.

Varvara hub

·      At the newly acquired Komar (187 km from Varvara plant), detailed in-fill and step-out exploration drilling (45 km) at the flanks of the deposit have been finished, leading to initial reserve and resource estimate in 2016. As at 1 January 2017 ore reserves and mineral resources comprise 873 Koz of gold at 1.8 g/t and 517 Koz of gold at 2.2 g/t, respectively. Additional prospecting activities aimed at the discovery of new ore bodies and the expansion of the resource base around the property are set to continue in 2017.

·      Additional exploration drilling totalling 7 km was conducted at the North-Eastern and Northern areas of the Dolinnoye deposit within the optimised pit outline that was established based on exploration results from 2015. An initial reserve and resource estimate was prepared by CSA Global based on Polymetal's share in the deposit, amounting to 101 Koz of GE at 2.4 g/t GE in reserves and 247 Koz of GE at of 2.5 g/t GE in resources.

·      Exploration activities at Tarutin (150 km from Varvara plant) have been finalised. The feasibility study for the property has been completed and the deposit has now a clear path to production as another component of the hub strategy at Varvara. 

Kapan/Lichkvaz

·      At Kapan, a revised JORC-compliant resource estimate was prepared by Polymetal and as at 1 January 2017 mineral resources comprise 1,928 Koz of GE (excludes zinc) at an average GE grade of 4.0 g/t.

·      An initial resource estimate for Lichkvaz (70 km from Kapan plant) prepared by CSA Global Pty Ltd. comprises 582 Koz of GE at 4.2 g/t GE. 24 km of further in-fill and step-out drilling aimed at identifying and delineating ore bodies has been completed in 2016 with a goal to establish an additional resources upgrade of existing resources into a higher category.

·      Polymetal plans to conduct additional drilling in 2017 to produce a JORC-compliant ore reserve estimate and combined life-of-mine plan for Lichkvaz and Kapan in Q3 2017.

Kyzyl

·      At Bakyrchik, drill testing of several targets near the main deposit (Promezhutochny and Gluboky) have yielded positive results. Out of 35 drill holes completed in 2016, 26 have ore intercepts with an average thickness varying from 0.5 m to 6.75 m, and gold content varying between 2.4 g/t to 24.2 g/t. In 2017, step-out drilling of existing ore bodies will continue to prepare the property for mining.

·      At Bolshevik, a satellite deposit to Bakyrchik, we completed drilling and sampling assessments paving the way for the preparation of a feasibility study, which is expected to be translated into an initial resource estimate in 2017.

PGM's

·      The exploration licence for the Viksha project has been successfully converted into a mining licence effective from July 18, 2016. An initial Mineral Resource estimate for the PGM Viksha project in Karelia comprises 9.5Moz of PdEq, making Viksha one of the largest open-pittable PGM resources in the world. The depth of the open-pit is 150 m below surface with an average thickness of 7 m. In 2017, we will proceed with further exploration program. A feasibility study for an ore reserve estimate is planned for Q3 2019.

·      Prospecting drilling activities at Kuolisma property, a new ore licenсe area, totalled 9 km as a result of which platinum and palladium mineralisation zones were identified. 

Prognoz

·      Polymetal acquired a 5% indirect interest in Prognoz in 2017. It is the largest undeveloped primary silver deposit in Russia, estimated to hold 292 Moz of silver at 586 g/t in JORC mineral resources as estimated by Micon (not included in the statement as of 1 January 2017). Polymetal plans to undertake 25 km of diamond drilling, and complete a technical study resulting in an externally audited JORC-compliant reserves estimate for the property before 31 March 2019. Preparations are already underway for the 2017 drilling campaign.

 

Nezhda

·      During the year, Polymetal performed an extensive exploration campaign at Nezhda JV obtaining significant additional comfort on the geology and metallurgy of the deposit.

·      Diamond drilling totaling 39 km was completed at ore zone 1 of the Nezhda deposit in 2016. 141 ore intercepts have been traced in the southeast part of ore zone 1 with an average thickness of 5.3 m, and average grades from 2.3 g/t to 74.5 g/t for gold and 1.7 g/t to 54.6 g/t for silver. At the northwestern part of ore zone 1, 121 ore intercepts have been identified with an average thickness of 20.9 m, and grades from 1.1 g/t to 18.7 g/t for gold and 1.4 to 49.6 g/t for silver. In 2017 further exploration of ore zone 1 and adjacent areas is planned to expand open-pittable resources.

 

Ore Reserves as at 1 January 2017(1)

 


Tonnage

Grade

Content

 


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

 

Proved









 

Standalone Mines










 

Albazino

2,660

3.9

-

-

3.9

336

-

-

336

 

Mayskoye

3,530

6.9

-

-

6.9

783

-

-

783

 











 

Dukat hub

7,870




4.3

189

74,565

-

1,091

 

Dukat

5,100

0.5

280

-

3.9

89

45,892

-

635

 

Lunnoye

2,060

1.4

283

-

4.9

90

18,725

-

321

 

Goltsovoye

260

-

434

-

5.6

-

3,723

-

48

 

Arylakh

450

0.7

424

-

5.9

10

6,225

-

87

 











 

Varvara hub

20,310




1.2

753

-

11.2

807

 

Varvara (3)

13,470

0.9

-

0.41

1.0

385

-

11.2

438

 

Komar (4)

2,030

1.1

-

-

1.1

74

-

-

74

 

Maminskoye (5)

4,810

1.9

-

-

1.9

295

-

-

295

 











 

Omolon hub

10,450




2.7

771

12,378

-

911

 

Birkachan

4,940

1.8

6

-

1.9

289

882

-

299

 

Sopka Kvartsevaya

2,780

1.4

64

-

2.1

129

5,696

-

190

 

Oroch

810

3.7

163

-

5.9

96

4,198

-

151

 

Olcha

190

8.0

21

-

8.2

46

124

-

48

 

Dalneye (8)

1,120

1.9

28

-

2.2

70

1,018

-

78

 

Tsokol Kubaka

230

6.4

12

-

6.6

46

86

-

47

 

Burgali (9)

380

7.9

31

-

8.2

95

375

-

98

 











 

Voro hub

9,000




1.7

484

863

-

491

 

Voro

9,000

1.7

3

-

1.7

484

863

-

491

 











 

Okhotsk hub

5,970




3.2

589

3,287

-

617

 

Svetloye

4,870

2.8

4

-

2.9

446

586

-

447

 

Avlayakan

230

14.8

122

-

16.2

108

886

-

118

 

Ozerny (11)

290

1.8

28

-

2.0

17

258

-

19

 

Khakanja (12)

580

1.0

83

-

1.8

18

1,556

-

34

 











 

Development and exploration projects










 

Veduga (14)

170

2.6

-

-

2.6

14

-

-

14

 

Kutyn (15)

1,580

3.3

-

-

3.3

169

-

-

169

 

Total Proved

61,540




2.6

4,089

91,094

11.2

5,221

 

 

Probable










 

Standalone Mines










 

Albazino

12,280

4.3

-

-

4.3

1,696

-

-

1,696

 

Mayskoye

2,940

6.9

-

-

6.9

646

-

-

646

 











 

Dukat hub

5,680




5.3

140

67,822

-

963

 

Dukat

3,980

0.7

394

-

5.4

90

50,384

-

690

 

Lunnoye

910

1.4

276

-

4.8

42

8,117

-

143

 

Goltsovoye

200

 -

363

-

4.7

-

2,315

-

30

 

Arylakh

240

1.0

276

-

4.4

8

2,147

-

34


Tonnage

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

Perevalnoye (2)

350

-

428

-

5.9

-

4,860

-

67











Varvara hub

37,230




1.8

1,928

269

35.4

2,114

Varvara (3)

12,400

1.0

-

0.52

1.3

408

-

24.6

526

Komar (4)

12,970

1.9

-

-

1.9

799

-

-

799

Maminskoye (5)

9,890

1.9

-

-

1.9

618

-

-

618

Tarutin (6)

660

0.1

13

1.62

3.3

2

269

10.8

70

Dolinnoye (7)

1,310

2.4

-

-

2.4

101

-

-

101











Omolon hub

1,950




8.9

529

2,159

-

555

Birkachan

970

9.8

36

-

10.3

305

1,101

-

318

Sopka Kvartsevaya

120

4.0

137

-

5.8

16

545

-

23

Oroch

10

2.5

178

-

4.8

1

78

-

2

Olcha

230

9.1

22

-

9.4

66

163

-

68

Tsokol Kubaka

460

8.0

9

-

8.1

117

128

-

119

Burgali (9)

160

4.7

28

-

5.0

24

144

-

25











Voro hub

1,840




6.3

267

1,267

18.9

370

Voro

1,520

4.1

4

-

4.1

197

211

-

199

North Kaluga (10)

320

6.7

101

5.81

16.4

70

1,056

18.9

171











Okhotsk hub

2,590




3.1

256

368

-

258

Svetloye

2,510

2.8

3

-

2.8

227

240

-

228

Avlayakan

80

11.2

50

-

11.8

29

129

-

30











Development and exploration projects










Kyzyl project (Bakyrchik) (13)

29,150

7.7

-

-

7.7

7,254

-

-

7,254

Veduga (14)

3,200

5.2

-

-

5.2

535

-

-

535

Kutyn (15)

2,070

3.3

-

-

3.3

217

-

-

217

Total Probable

98,930




4.6

13,469

71,887

54.3

14,608










Proved + Probable










Standalone Mines










Albazino

14,940

4.2

-

-

4.2

2,032

-

-

2,032

Mayskoye

6,470

6.9

-

-

6.9

1,429

-

-

1,429











Dukat hub

13,550




4.7

329

142,388

-

2,054

Dukat

9,080

0.6

330

-

4.5

178

96,276

-

1,325

Lunnoye

2,970

1.4

281

-

4.8

132

26,843

-

464

Goltsovoye

460

-

404

-

5.2

-

6,038

-

77

Arylakh

690

0.8

373

-

5.4

18

8,372

-

122

Perevalnoye (2)

350

-

428

-

5.9

-

4,860

-

67











Varvara hub

57,540




1.6

2,681

269

46.6

2,921

Varvara (3)

25,870

1.0

-

0.48

1.2

792

-

35.8

964

Komar (4)

15,000

1.8

-

-

1.8

873

-

-

873

Maminskoye (5)

14,700

1.9

-

-

1.9

913

-

-

913

Tarutin (6)

660

0.1

13

1.62

3.3

2

269

10.8

70


 

Tonnage

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

Dolinnoye (7)

1,310

2.4

-

-

2.4

101

-

-

101











Omolon hub

12,400




3.7

1,300

14,537

-

1,466

Birkachan

5,910

3.1

10

-

3.2

594

1,983

-

617

Sopka Kvartsevaya

2,900

1.5

67

-

2.3

145

6,242

-

213

Oroch

820

3.7

163

-

5.8

97

4,276

-

154

Olcha

420

8.6

22

-

8.8

113

286

-

116

Dalneye (8)

1,120

1.9

28

-

2.2

70

1,018

-

78

Tsokol Kubaka

690

7.5

10

-

7.6

164

214

-

166

Burgali (9)

540

7.0

30

-

7.2

119

519

-

123











Voro hub

10,840




2.5

751

2,131

18.9

861

Voro

10,520

2.0

3

-

2.0

681

1,075

-

690

North Kaluga (10)

320

6.7

101

5.81

16.4

70

1,056

18.9

171











Okhotsk hub

8,560




3.2

845

3,655

-

876

Svetloye

7,380

2.8

3

-

2.8

674

826

-

675

Avlayakan

310

13.8

103

-

15.0

137

1,015

-

148

Ozerny (11)

290

1.8

28

-

2.0

17

258

-

19

Khakanja (12)

580

1.0

83

-

1.8

18

1,556

-

34











Development and exploration projects










Kyzyl project (Bakyrchik) (13)

29,150

7.7

-

-

7.7

7,254

-

-

7,254

Veduga (14)

3,370

5.0

-

-

5.0

549

-

-

549

Kutyn (15)

3,650

3.3

-

-

3.3

386

-

-

386

Total Proved + Probable

160,470




3.8

17,558

162,980

65.4

19,829

 

1)         Ore Reserves are reported in accordance with the JORC Code (2012). Discrepancies in calculations are due to rounding.

2)         Initial estimate prepared by Polymetal as at 01.01.2016. Price: Ag = US$15/oz, Pb = US$1,700/t. Revised estimate was not performed due to lack of material changes.

3)         Cu grade in Ore Reserves only represents average grade of Float feed. Ore Reserves of Float feed: 2.7 Mt Proved and 4.7 Mt Probable.

4)         Initial estimate prepared by Polymetal as at 01.07.2016. Price: Au= US$1,100/oz. Revised estimate as at 01.01.2017.

5)         Estimate prepared by Polymetal as at 01.01.2014. Price: Au= US$1,300/oz. Revised estimate was not performed due to lack of material changes.

6)         Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au= US$1,100/oz, Ag = US$15/oz, Cu = US$5,000/t. Revised estimate was not performed due to lack of material changes. Ore Reserves are presented in accordance with the Company's ownership equal to 75%.

7)         Initial estimate prepared by CSA as at 28.07.2016. Price: Au= US$1,100/oz. Revised estimate prepared by Polymetal as at 01.01.2017 (only stoping). Ore Reserves are presented in accordance with the Company's ownership equal to 25%.

8)         Stockpiled Ore Reserves.

9)         Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au= US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

10)       Initial estimate prepared by Polymetal as at 01.07.2014. Price: Au= US$1,300/oz, Ag = US$20/oz, Cu = US$7,000/t, Zn = US$1,700/t. Revised estimate was not performed due to lack of material changes.

11)       Stockpiled Ore Reserves.

12)       Stockpiled Ore Reserves.

13)       Estimate prepared by RPA Inc. as at 01.01.2015. Price: Au = US$1,200/oz. Revised estimate was not performed due to lack of material changes.

14)       Initial estimate prepared by Snowden as at 01.01.2014. Price: Au= US$1,300/oz. Revised estimate prepared by Polymetal as at 01.01.2017 (only stoping without Au price change). Ore Reserves are presented in accordance with the Company's ownership equal to 42.65%.

15)       Initial estimate prepared by Snowden as at 01.01.2015. Price: Au= US$1,300/oz (only Ore Reserves estimate for Heap Leach). Revised estimate was not performed due to lack of material changes.

 

Mineral Resources as at 1 January 2017(1)

 

 

Tonnage 

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

Measured










Standalone Mines










Albazino

30

4.3

-

-

4.3

5

-

-

5











Dukat hub

100




13.8

-

3,310

-

42

Goltsovoye

100

-

1,075

-

13.8

-

3,310

-

42











Varvara hub

6,860




1.4

198

-

21.1

299

Varvara (4)

5,880

0.8

-

0.40

1.3

154

-

21.1

255

Maminskoye (6)

980

1.4

-

-

1.4

44

-

-

44











Omolon hub

230




4.6

22

1,055

-

34

Sopka Kvartsevaya

200

2.7

136

-

4.3

17

856

-

27

Oroch

30

4.9

198

-

7.5

5

199

-

8











Voro hub

80




2.1

6

11

-

6

Voro

80

2.1

4

-

2.1

6

11

-

6











Development and exploration projects










Kutyn (22)

740

4.1

-

-

4.1

97

-

-

97

Total Measured

8,040




1.9

327

4,375

21.1

483











Indicated










Standalone Mines










Albazino

2,220

5.1

-

-

5.1

361

-

-

361











Dukat hub

510




19.4

62

19,887

-

317

Goltsovoye

40

-

1,025

-

13.1

-

1,277

-

16

Primorskoye (3)

470

4.2

1,238

-

20.0

62

18,610

-

301











Varvara hub

18,310




1.6

772

90

33.5

941

Varvara (4)

12,630

1.1

-

0.57

1.4

447

-

27.8

581

Komar (5)

3,540

2.1

-

-

2.1

238

-

-

238

Maminskoye (6)

1,150

1.5

-

-

1.5

55

-

-

55

Tarutin (7)

450

0.1

6

1.25

2.5

1

90

5.7

37

Dolinnoye (8)

540

1.8

-

-

1.8

31

-

-

31











Omolon hub

600




9.8

121

5,671

-

189

Sopka Kvartsevaya

110

4.4

161

-

6.3

16

589

-

23

Oroch

180

3.5

314

-

7.7

21

1,840

-

45

Irbychan (10)

240

8.9

189

-

11.3

68

1,439

-

86

Nevenrekan (12)

70

7.1

784

-

15.1

16

1,803

-

35











Voro hub

1,690




5.6

196

1,984

16.1

305

Voro

30

1.9

5

-

2.0

2

4

-

2

Tamunier (13)

870

4.6

23

-

4.8

130

655

-

133

Saum (14)

790

2.5

52

2.04

6.7

65

1,325

16.1

171












Tonnage

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

Armenia

6,480




4.1

640

7,545

 26.6

858

Kapan (18)

3,650

3.1

52

0.52

4.5

361

6,079

18.9

522

Lichkvaz (19)

2,830

3.1

16

0.27

3.7

279

1,466

 7.7

336











Development and exploration projects










Kyzyl project (Bakyrchik) (20)

2,740

6.2

-

-

6.2

545

-

-

545

Kutyn (22)

2,070

4.2

-

-

4.2

279

-

-

279

Total Indicated

34,620




3.4

2,977

35,178

76.3

3,796











Measured + Indicated









Standalone Mines










Albazino

2,250

5.1

-

-

5.1

366

-

-

366











Dukat hub

610




18.4

62

23,197

-

360

Goltsovoye

140

-

1,060

-

13.6

-

4,587

-

59

Primorskoye (3)

470

4.2

1,238

-

20.0

62

18,610

-

301











Varvara hub

25,170




1.5

970

90

54.6

1,241

Varvara (4)

18,510

1.0

-

0.48

1.4

601

-

48.9

836

Komar (5)

3,540

2.1

-

-

2.1

238

-

-

238

Maminskoye (6)

2,130

1.4

-

-

1.4

99

-

-

99

Tarutin (7)

450

0.1

6

1.25

2.5

1

90

5.7

37

Dolinnoye (8)

540

1.8

-

-

1.8

31

-

-

31











Omolon hub

830




8.4

143

6,726

-

223

Sopka Kvartsevaya

310

3.3

145

-

5.0

33

1,445

-

50

Oroch

210

3.7

297

-

7.6

26

2,039

-

52

Irbychan (10)

240

8.9

189

-

11.3

68

1,439

-

86

Nevenrekan (12)

70

7.1

784

-

15.1

16

1,803

-

35











Voro hub

1,770




5.5

202

1,995

16.1

311

Voro

110

2.1

4

-

2.1

7

14

-

7

Tamunier (13)

870

4.6

23

-

4.8

130

655

-

133

Saum (14)

790

2.5

52

2.04

6.7

65

1,325

16.1

171











Armenia

6,480




4.1

640

7,545

 26.6

858

Kapan (18)

3,650

3.1

52

0.52

4.5

361

6,079

18.9

522

Lichkvaz (19)

2,830

3.1

16

0.27

3.7

279

1,466

 7.7

336











Development and exploration projects










Kyzyl project (Bakyrchik) (20)

2,740

6.2

-

-

6.2

545

-

-

545

Kutyn (22)

2,810

4.2

-

-

4.2

376

-

-

376

Total Measured + Indicated

42,660




3.1

3,304

39,553

97.3

4,279











Inferred










Standalone Mines










Albazino

7,610

5.3

-

-

5.3

1,300

-

-

1,300


Tonnage

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu, Kt

GE, Koz

Mayskoye

8,450

11.9

-

-

11.9

3,239

-

-

3,239











Dukat hub

900




9.9

44

19,835

-

286

Dukat

450

1.9

833

-

11.8

27

11,933

-

169

Lunnoye

230

1.8

346

-

6.0

13

2,629

-

46

Goltsovoye

80

-

940

-

12.1

-

2,484

-

32

Arylakh

90

0.9

639

-

8.7

2

1,782

-

24

Perevalnoye (2)

20

-

564

-

7.7

-

379

-

5

Primorskoye (3)

30

1.8

787

-

11.8

1

629

-

9











Varvara hub

26,230




1.7

1,223

125

43.3

1,439

Varvara (4)

19,720

1.1

-

0.61

1.4

726

-

37.4

906

Komar (5)

3,670

2.4

-

-

2.4

279

-

-

279

Tarutin (7)

350

0.1

11

1.71

3.5

1

125

5.9

39

Dolinnoye (8)

2,490

2.7

-

-

2.7

216

-

-

216











Omolon hub

920




12.1

271

7,510

-

359

Sopka Kvartsevaya

50

2.3

98

-

3.7

4

150

-

5

Oroch

210

6.2

509

-

12.9

42

3,489

-

88

Olcha

160

10.0

44

-

10.5

53

236

-

56

Tsokol Kubaka

70

9.3

17

-

9.5

22

40

-

22

Burgali (9)

50

11.9

15

-

12.0

21

26

-

21

Irbychan (10)

20

19.3

265

-

22.6

10

141

-

12

Yolochka (11)

240

11.1

10

-

11.2

85

73

-

86

Nevenrekan (12)

120

8.6

861

-

17.3

33

3,355

-

68











Voro hub

3,930




4.0

490

1,096

1.0

502

Tamunier (13)

3,880

3.9

8

-

3.9

488

1,041

-

493

Saum (14)

50

1.4

33

1.82

4.9

2

55

1.0

8











Okhotsk hub

3,202




5.2

518

1,477

-

534

Avlayakan

20

32.7

133

-

34.3

19

77

-

20

Levoberezhny (15)

2,800

4.0

13

-

4.2

365

1,208

-

378

Kirankan (16)

142

6.5

8

-

6.7

30

39

-

30

Maimakan-Kundumi (17)

240

13.5

20

-

13.7

105

154

-

106











Armenia

12,860




4.0

1,128

17,845

65.2

1,651

Kapan (18)

11,390

2.6

47

0.50

3.8

934

17,253

57.0

1,406

Lichkvaz (19)

1,470

4.1

13

0.55

5.2

194

622

8.2

245











Development and exploration projects










Kyzyl project (Bakyrchik) (20)

11,420

7.0

-

-

7.0

2,562

-

-

2,562

Veduga (21)

580

4.1

-

-

4.1

77

-

-

77

Kutyn (22)

2,110

4.0

-

-

4.0

273

-

-

273

Total Inferred

78,212




4.9

11,124

47,918

109.4

12,221











Measured + Indicated + Inferred






Standalone Mines










Albazino

9,860

5.3

-

-

5.3

1,665

-

-

1,665


Tonnage

Grade

Content


Kt

Au, g/t

Ag, g/t

Cu, %

GE, g/t

Au, Koz

Ag, Koz

Cu,

Kt

GE, Koz

Mayskoye

8,450

11.9

-

-

11.9

3,239

-

-

3,239











Dukat hub

1,510




13.3

106

43,032

-

645

Dukat

450

1.9

833

-

11.8

27

11,933

-

169

Lunnoye

230

1.8

346

-

6.0

13

2,629

-

46

Goltsovoye

220

-

1,015

-

13.0

-

7,071

-

91

Arylakh

90

0.9

639

-

8.7

2

1,782

-

24

Perevalnoye (2)

20

-

564

-

7.7

-

379

-

5

Primorskoye (3)

500

4.0

1,216

-

19.6

64

19,239

-

311











Varvara hub

51,400




1.6

2,193

215

97.8

2,680

Varvara (4)

38,230

1.1

-

0.53

1.4

1,327

-

86.2

1,742

Komar (5)

7,210

2.2

-

-

2.2

517

-

-

517

Maminskoye (6)

2,130

1.4

-

-

1.4

99

-

-

99

Tarutin (7)

800

0.1

8

1.45

2.9

3

215

11.6

76

Dolinnoye (8)

3,030

2.5

-

-

2.5

247

-

-

247











Omolon hub

1,750




10.3

414

14,235

-

582

Sopka Kvartsevaya

360

3.2

139

-

4.8

37

1,595

-

55

Oroch

420

4.9

403

-

10.2

68

5,528

-

141

Olcha

160

10.0

44

-

10.5

53

236

-

56

Tsokol Kubaka

70

9.3

17

-

9.5

22

40

-

22

Burgali (9)

50

11.9

15

-

12.0

21

26

-

21

Irbychan (10)

260

9.6

194

-

12.0

78

1,580

-

98

Yolochka (11)

240

11.1

10

-

11.2

85

73

-

86

Nevenrekan (12)

190

8.0

832

-

16.5

50

5,157

-

102











Voro hub

5,700




4.4

692

3,091

17.1

812

Voro

110

2.1

4

-

2.1

7

14

-

7

Tamunier (13)

4,750

4.0

11

-

4.1

618

1,696

-

626

Saum (14)

840

2.5

51

2.03

6.6

67

1,380

17.1

179











Okhotsk hub

3,202




5.2

518

1,477

-

534

Avlayakan

20

32.7

133

-

34.3

19

77

-

20

Levoberezhny (15)

2,800

4.0

13

-

4.2

365

1,208

-

378

Kirankan (16)

142

6.5

8

-

6.7

30

39

-

30

Maimakan-Kundumi (17)

240

13.5

20

-

13.7

105

154

-

106











Armenia

19,340




4.0

1,769

25,422

91.8

2,510

Kapan (18)

15,040

2.7

48

0.50

4.0

1,295

23,333

75.9

1,928

Lichkvaz (19)

4,300

3.4

15

0.37

4.2

474

2,089

15.9

582











Development and exploration projects










Kyzyl project (Bakyrchik) (20)

14,160

6.8

-

-

6.8

3,107

-

-

3,107

Veduga (21)

580

4.1

-

-

4.1

77

-

-

77

Kutyn (22)

4,920

4.1

-

-

4.1

649

-

-

649

Total Measured + Indicated + Inferred

120,872




4.2

14,429

87,472

206.7

16,501

1)         Мineral Resources are reported in accordance with the JORC Code (2012). Mineral Resources are additional to Ore Reserves. Discrepancies in calculations are due to rounding.

2)         Initial estimate prepared by Polymetal as at 01.01.2016. Price: Ag = US$15/oz, Pb = US$1,700/t. Revised estimate was not performed due to lack of material changes.

3)         Estimate prepared by CSA Global Pty Ltd as at 01.01.2017. Price: Au = US$1,250/oz, Ag = US$16 /oz.

4)         Cu estimate is listed for fresh ore and powder ore that has high Cu grade (total Mineral Resources for fresh ore and powder ore with high Cu grade of 10.5 and 5.7 Mt of ore respectively).

5)         Initial estimate prepared by Polymetal as at 01.07.2016. Price: Au = US$1,100/oz. Revised estimate as at 01.01.2017.

6)         Estimate prepared by Polymetal as at 01.01.2014. Price: Au = US$1,300/oz. Revised estimate was not performed due to lack of material changes.

7)         Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au= US$1,100/oz, Ag = US$15/oz, Cu = US$5,000/t. Revised estimate was not performed due to lack of material changes. Мineral Resources are presented in accordance with the Company's ownership equal to 75%.

8)         Initial estimate prepared by CSA as at 28.07.2016. Price: Au= US$1,100/oz. Revised estimate prepared by Polymetal as at 01.01.2017 (only stoping). Мineral Resources are presented in accordance with the Company's ownership equal to 25%.

9)         Estimate prepared by Polymetal as at 01.01.2016. Price: Au = US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

10)       Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au = US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

11)       Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au = US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

12)       Initial estimate prepared by Polymetal as at 01.01.2016. Price: Au = US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

13)       Estimate prepared by Polymetal as at 01.01.2016. Price: Au = US$1,100/oz, Ag = US$15/oz. Revised estimate was not performed due to lack of material changes.

14)       Initial estimate prepared by Polymetal as at 01.01.2017. Мineral Resources are presented in accordance with the Company's ownership equal to 80%.

15)       Initial estimate prepared by Polymetal as at 01.01.2017.

16)       Estimate prepared by Snowsden as at 01.07.2011. Price: Au = US$1,150/oz, Ag = US$18.5/oz. Revised estimate was not performed due to lack of material changes.

17)       Initial estimate prepared by Polymetal as at 01.01.2017.

18)       Initial estimate prepared by CSA as at 31.12.2014. Price: Au= US$1,300/oz, Ag = US$20/oz, Cu = US$6,600/t, Zn = US$2,200/t. Revised estimate prepared by Polymetal as at 01.01.2017 (only stoping). Zinc in the amount of 263 kt is not included in GE calculation.

19)       Initial estimate prepared by CSA as at 01.01.2016. Price: Au= US$1,100/oz, Ag = US$15/oz, Cu = US$5,000/t. Revised estimate was not performed due to lack of material changes.

20)       Estimate prepared by RPA Inc. as at 01.01.2015. Price: Au = US$1,200/oz. Revised estimate was not performed due to lack of material changes.

21)       Initial estimate prepared by Snowden as at 01.01.2014. Price: Au= US$1,300/oz. Revised estimate prepared by Polymetal as at 01.01.2017. Mineral Resources are presented in accordance with the Company's ownership equal to 42.65%.

22)       Initial estimate for open pit prepared by Snowden, for underground by CSA Global Pty Ltd as at 01.01.2015. Price: Au = US$1,300/oz. Revised estimate was not performed due to lack of material changes.

 

PGM Mineral Resources as at 1 January 2017(1)

 

 

Tonnage

Grade

Content


Mt

Pd, g/t

Pt, g/t

Au, g/t

Cu,

%

PdEq(2), g/t

Pd, Moz

Pt, Moz

Au,

Moz

Cu,

Kt

PdEq, Moz

Indicated












Viksha project(3)












Viksha

27

0.6

0.2

0.1

0.10

1.4

0.5

0.1

0.1

29.6

1.3

Kenti

-

-

-

-

-

-

-

-

-

-

-

Shargi

-

-

-

-

-

-

-

-

-

-

-

Total Indicated

27

0.6

0.2

0.1

0.10

1.4

0.5

0.1

0.1

29.6

1.3













Inferred












Viksha project(3)












Viksha

52

0.6

0.2

0.1

0.09

1.3

1.0

0.3

0.2

49.5

2.3

Kenti

98

0.6

0.2

0.1

0.11

1.3

1.9

0.6

0.4

109.6

4.3

Shargi

36

0.6

0.2

0.1

0.08

1.3

0.7

0.2

0.1

31.7

1.5

Total Inferred

186

0.6

0.2

0.1

0.10

1.3

3.6

1.1

0.7

190.8

8.1













Indicated + Inferred










Viksha project(3)












Viksha

79

0.6

0.2

0.1

0.10

1.4

1.5

0.4

0.3

79.1

3.6

Kenti

98

0.6

0.2

0.1

0.11

1.3

1.9

0.6

0.4

109.6

4.3

Shargi

36

0.6

0.2

0.1

0.08

1.3

0.7

0.2

0.1

31.7

1.5

Total Indicated + Inferred

213

0.6

0.2

0.1

0.10

1.3

4.2

1.4

0.9

220.6

9.5

1)         Мineral Resources are reported in accordance with the JORC Code (2012). Mineral Resources are additional to Ore Reserves. Discrepancies in calculations are due to rounding.

2)         PdEq is calculated using the following formula: PdEq = Pd(g/t) + Pt(g/t) *1.57 + Au(g/t) * 1.61 + Cu(%) * 2.33.

3)         Initial estimate prepared by AMC Consultants as at 01.03.2015 using COG (PdEq) = 0.5 g/t/. Revised estimate was not performed due to lack of material changes.

 

This estimate was prepared by employees of JSC Polymetal Management Company and JSC Polymetal Engineering, subsidiaries of the Company, led by Mr. Valery Tsyplakov, who assumes overall responsibility for the Mineral Resources and Ore Reserves Report.

Mr. Tsyplakov is the employed full-time as the Managing Director of JSC Polymetal Engineering and has more than 16 years' experience in gold, silver and polymetallic mining. He is a Member of the Institute of Materials, Minerals & Mining (MIMMM), London, and a Competent Person under the JORC Code.

Listed below are other Competent Persons employed by the Company that are responsible for relevant research on which the Mineral Resources and Ore Reserves estimate is based:

·        Geology and Mineral Resources - Roman Govorukha, Head of Geologic Modelling and Monitoring Department, MIMMM, with 16 years' relevant experience;

·        Mining and Ore Reserves - Igor Epshteyn, Head of Mining Process Department, MIMMM, with 35 years' relevant experience;

·        Concentration and Metals - Igor Agapov, Deputy Director of Science and Technology, MIMMM, with 19 years' relevant experience;

·        Environmental issues - Tatiana Kuleshova, Director for Ecology, MIMMM, with 26 years' relevant experience.

All the above mentioned Competent Persons have sufficient experience that is relevant to the style of mineralisation and types of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code).

All Competent Persons have given their consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Metals prices used in estimating Mineral Resources and Ore Reserves are listed below (unless otherwise indicated in the footnotes):

Au = US$1,200/oz;

Ag = US$16.0/oz;

Cu = US$4,500/t;

Gold equivalent data is based on "Conversion ratios of metals into gold equivalent" provided in the Appendix below. Lead and zinc Ore Reserves and Mineral resources have not been assessed due to immateriality and are not included in the calculation of the gold equivalent.

 

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.

 

Appendix

Reporting of Metal Equivalents

Gold equivalent conversion ratio

AuEqv=Me/k

Where Me is the evaluated metal content (silver g/t, copper %)

Where k is the silver to gold equivalent conversion rate that is calculated considering the difference in metals value issuing the following formula:

For silver: k=((Au price/31.1035 - (Au price /31.1035 - treatment charge Au)*(Royalty Au)/100 - (treatment charge Au))*(recovery Au)/((Ag price/31.1035 - (Ag price/31.1035 - treatment charge Ag)*(Royalty Ag)/100 - (treatment charge Ag))*(recovery Ag)),

for copper (%): k = 100*((Au price/31.1035-treatment charge Au)*(1-royalty Au%/recovery Au%)*(recovery Au%))/((Cu price-treatment charge Cu)*(1-royalty Cu%/recovery Cu%)*(recovery Cu%)),

where Royalty is the mineral extraction tax at applicable rate, recovery - the life-of-mine expected recovery of the respective metal in the processing technology applied.

Silver/gold equivalent and copper/gold equivalent conversion ratios:

Deposit

Ore processing technology

k

Ag

Cu

Dukat

Conventional flotation

84


Lunnoye

Cyanidation+Merrill Crowe process

81


Goltsovoye

Conventional flotation

78


Arylakh

Cyanidation+Merrill Crowe process

81


Perevalnoye

Conventional flotation

73


Primorskoye

Conventional flotation

78


Varvara

Powder ore with high copper content (1)


0.67

Primary ore with high copper content - conventional flotation


0.67

Tarutin

Primary ore - conventional flotation

94

0.53

Oxidised ore - conventional flotation

94

0.53

Birkachan

Cyanidation сarbon-in-pulp

81


Heap leaching+сarbon-in-colon

106


Sopka Kvartsevaya

Cyanidation+Merrill Crowe process

76


Heap leaching+Merrill Crowe process

110


Oroch

Cyanidation+Merrill Crowe process

76


Olcha

Cyanidation+Merrill Crowe process

86


Dalneye

Cyanidation+Merrill Crowe process

99


Heap leaching+Merrill Crowe process

130


Tsokol Kubaka

Cyanidation сarbon-in-pulp

92


Burgali

Cyanidation+Merrill Crowe process

115


Irbychan

Cyanidation+Merrill Crowe process

80


Yolochka

Cyanidation сarbon-in-pulp

91


Nevenrekan

Cyanidation+Merrill Crowe process

98


Voro

Heap leaching+Merrill Crowe process

233


Cyanidation сarbon-in-pulp

117


North Kaluga

Conventional flotation

91

0.68

Tamunier

Conventional flotation

199


Saum

Conventional flotation

67

0.60

Svetloye

Heap leaching+Merrill Crowe process

639


Avlayakan

Cyanidation+Merrill Crowe process

86


Ozerny

Cyanidation+Merrill Crowe process

107


Khakanja

Cyanidation+Merrill Crowe process

102


Levoberezhnoye

Cyanidation сarbon-in-pulp

88


Kirankan (2)

Cyanidation+Merrill Crowe process

60


Maimakan-Kundumi

Cyanidation+Merrill Crowe process

86


Kapan

Conventional flotation

82

0.70

Lichkvaz

Conventional flotation

100

0.59

1)         This type of ore is currently not being processed, it is stockpiled and reflected only in Mineral Resources.

2)         Silver to gold equivalent conversion ratios were not recalculated to deposits that were evaluated in 2011-2012.

 

 


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