Polymetal: Q3 2020 production results

Polymetal International plc (POLY) Polymetal: Q3 2020 production results 22-Oct-2020 / 09:00 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY Date 22 October 2020 Polymetal International plc Q3 2020 production results Polymetal reports strong production results for the third quarter of 2020. "In Q3 the Group continued to exceed production budget and generated massive cash flows on the back of a seasonal release of working capital", said Vitaly Nesis, Group CEO of Polymetal. "We remain vigilant and focused to protect our employees, contractors, and local communities as the COVID-19 pandemic remains a crucial risk for Polymetal". HIGHLIGHTS There were no fatal accidents during the first nine months of 2020 either at Polymetal or at the Company's contractors. LTIFR among the Group's employees for the period stood at 0.10, a decrease of 47% year-on-year (y-o-y). There were 8 minor incidents in total in comparison with 15 incidents during 9M 2019. The Company's Q3 gold equivalent ("GE") production increased by 7% y-o-y to 477 Koz of GE driven by strong contributions from Omolon, Varvara, and Kyzyl. GE output for 9M 2020 months reached 1,200 Koz, an increase of 5% y-o-y. Q3 revenue jumped by 35% y-o-y to reach US$ 884 million on the back of higher gold and silver prices as well as increased sales volumes. 9M revenue amounted to US$ 2,019 million, up 26% y-o-y. The lag between gold production and sales, mainly at Varvara and Kyzyl, is expected to close in Q4 2020. Polymetal generated record quarterly free cash flow in Q3. Net debt was down by US$ 80 million to US$ 1.61 billion, even as the Company paid US$ 189 million of interim dividends (US$ 0.40 per share, a two-fold increase year-on-year). Construction and development activities at Nezhda and POX-2 progressed on schedule. COVID-related restrictions, precautionary measures and cases of the disease on site have not slowed down project execution. The Company is on track to meet its full-year 2020 production guidance of 1,500 Koz GE with COVID-related risks remaining the key source of uncertainty. TCC and AISC guidance of US$ 650-700/GE oz and US$ 850-900/GE oz respectively is also maintained. Production guidance for 2021 and 2022 of 1,500 Koz and 1,600 Koz GE respectively is reiterated.   COVID-19 UPDATE There were 112 active cases of COVID-19 as at 20.10.2020 across the Group. Strict precautionary procedures, previously implemented, including 14-day mandatory isolation of new shifts and limitations on meetings and travel, are maintained at all production sites and offices. These restrictions are expected to continue at least into Q2 2021. Mayskoye suffered a C-19 outbreak in September. All infected persons and their contacts were transferred to observatory facilities or hospitals. Currently 18 people remain isolated on site and 8 are in hospital with 1 person in a serious condition. All mining and processing activities continued at regular pace. In September, Olcha underground and open pit (part of Omolon hub) returned to production after a 5-week stoppage caused by the COVID-19 outbreak. All people infected (approximately 50) have recovered. The stoppage is not expected to result in any production or cost downgrades. Russia is undergoing a second wave of the pandemic with daily infections above the previous peak levels seen in May. Some regions partially re-introduced restrictive measures. Kazakhstan lifted most of the quarantine restrictions in August following significant drops in the number of infected and intensive care admissions. The infection rates remain stable so far. At the same time, governments have relaxed a number of cross-border travel restrictions allowing flights between Russia, Kazakhstan and Belarus to resume. This has facilitated bringing Kazakh employees to Dukat and Mayskoye. Polymetal continues to provide varied financial and operational support to healthcare facilities across all regions of its presence with US$ 2.9 million spent so far in 2020. The main areas of assistance include purchasing PPE, medical supplies, and specialized diagnostic equipment. The Company estimates additional COVID-related cash expenses at approximately US$ 3 million per month with the bulk recorded as operating costs. This translates into approximately US$ 20 per GE ounce produced in Q3. COVID-19 STATISTICS AS OF 20.10.2020 Employees Russia Kazakhstan Group Tests administered 17,491 8,108 25,599 C-19 positive tests 390 222 612 Active cases 99 13 112 In hospital 29 0 29 OPERATING HIGHLIGHTS 3 months ended Sep 30, % change1 9 months ended Sep 30, % change1 2020 2019 2020 2019 Waste mined, Mt 43.8 41.3 +6% 122.8 118.9 +3% Underground development, km 21.0 25.9 -19% 67.4 80.2 -16% Ore mined, Mt 4.2 4.5 -7% 12.2 13.0 -6% Open-pit 3.1 3.4 -10% 9.1 9.9 -8% Underground 1.1 1.1 +2% 3.1 3.1 -0% Ore processed, Mt 4.0 3.9 +2% 11.8 11.5 +3% Average GE grade processed, g/t 3.8 3.9 -2% 3.9 3.8 +3% Production Gold, Koz 438 402 +9% 1,080 1,005 +8% Silver, Moz 4.6 5.4 -13% 14.4 16.4 -12% Gold equivalent, Koz2 477 447 +7% 1,200 1,141 +5% Sales Gold, Koz 410 388 +6% 1,005 992 +1% Silver, Moz 4.2 6.1 -31% 14.1 16.4 -14% Revenue, US$m3 884 656 +35% 2,019 1,602 +26% Net debt, US$m4 1,610 1,690 -5% 1,610 1,479 +9% Safety5 LTIFR 0.15 0.11 +36% 0.10 0.19 -47% Fatalities 0 0 NA 0 2 -100% Notes: (1) % changes can be different from zero even when absolute numbers are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute numbers differ due to the same reason. This note applies to all tables in this release.  (2) Based on 120:1 Au/Ag conversion ratio (prior to Q2 2020, Polymetal used 80:1 Au/Ag ratio) and excluding base metals (previously were included). Historical comparative data restated accordingly. (3) Calculated based on the unaudited consolidated management accounts. (4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2020 (for the three months period) and 31 December 2019 (for the nine months period). (5) LTIFR = lost time injury frequency rate per 200,000 hours worked. PRODUCTION BY MINE 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 GOLD EQ. (KOZ)1 Kyzyl 102 94 +8% 314 253 +24% Mayskoye 77 72 +7% 78 76 +2% Albazino 65 75 -13% 204 211 -3% Omolon 65 47 +40% 153 142 +8% Dukat 48 51 -7% 152 159 -5% Varvara 46 34 +35% 130 104 +25% Svetloye 39 46 -15% 91 107 -15% Voro 35 28 +24% 77 84 -9% TOTAL (continuing operations) 477 447 +7% 1,200 1,138 +6% Kapan - - NA - 3 -100% TOTAL (including discontinued operations) 477 447 +7% 1,200 1,141 +5% Notes: (1) Based on 120:1 Au/Ag conversion ratio (prior to Q2 2020, Polymetal used 80:1 Au/Ag ratio) and excluding base metals (previously were included). Historical comparative data restated accordingly. CONFERENCE CALL AND WEBCAST Polymetal will hold a conference call and webcast on Thursday, 22 October 2020 at 11:00 London time (13:00 Moscow time). To participate in the call, please dial: From the UK: [phone] (local access) 0800 358 6377 (toll free) From the US: [phone] (local access) 800 289 0571 (toll free) From Russia: [phone] (local access) 8 800 500 9283 (toll free) To participate from other countries, please dial any of the local access numbers listed above. Conference code: 9476909 To participate in the webcast follow the link: https://webcasts.eqs.com/polymetal20201022. Please be prepared to introduce yourself to the moderator or register. A recording of the call will be available at [phone] (from the UK), [phone] (from the USA) and 8 10 800 2702 1012 (from Russia), access code 9476909, from 16:30 Moscow time Thursday, 22 October, till 16:30 Moscow time Thursday, 29 October 2020. Webcast replay will be available on Polymetal website (www.polymetalinternational.com) and at https://webcasts.eqs.com/polymetal20201022. 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 FTI Consulting Leonid Fink Viktor Pomichal [phone] Polymetal Evgeny Monakhov Timofey Kulakov Kirill Kuznetsov [e-mail] [phone] (UK) [phone] (Russia) Joint Corporate Brokers   Morgan Stanley & Co. International plc Andrew Foster Richard Brown Panmure Gordon Daniel Norman John Prior [phone] [phone] RBC Europe Limited Marcus Jackson Jamil Miah [phone] 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. KYZYL 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 20.0 17.5 +14% 58.0 49.9 +16% Ore mined (open-pit), Kt 513 527 -3% 1,555 1,560 -0% PROCESSING Ore processed, Kt 509 502 +1% 1,515 1,490 +2% Gold grade, g/t 7.4 7.5 -1% 8.0 7.0 +14% Gold recovery 89.0% 88.3% +1% 87.8% 87.7% +0% Concentrate produced, Kt 37.2 31.4 +18% 110.2 89.7 +23% Concentrate gold grade, g/t 90.6 104.8 -14% 96.4 101.7 -5% Gold in concentrate, Koz1 108.2 105.9 +2% 341.3 293.3 +16% Concentrate shipped, Kt 21.1 17.2 +22% 68.3 54.2 +26% Payable gold shipped, Koz 40 36 +11% 132 127 +4% Veduga ore toll processed, Kt2 - - NA 31 - NA Amursk POX Concentrate processed, Kt 15 15 -3% 44 35 +24% Gold grade, g/t 147.8 125.9 +17% 143.8 125.3 +15% Gold recovery 92.6% 91.7% +1% 92.1% 92.9% -1% Gold produced, Koz 62 58 +6% 183 126 +44% TOTAL PRODUCTION Gold, Koz 102 94 +8% 314 253 +24% Note: (1) For information only; not considered as gold produced and therefore not reflected in the table representing total production. It will be included in total production upon shipment to off-taker or dore production at Amursk POX. (2) To be further processed at Amursk POX. Kyzyl production for Q3 increased by 8% y-o-y to 102 Koz on the back of higher grades in the open pit. Grades will continue to normalize towards reserve average (6.7 g/t) as mining progresses to lower levels where small high-grade lenses are significantly less usual. Recoveries at the concentrator improved by 1 percentage point thanks to continuous optimization of reclaim water quality. Investment in additional thickening and drying capacity is expected to enable stable recoveries despite the introduction of higher-carbon, more refractory ore in 2021. MAYSKOYE 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 0.6 1.4 -55% 2.3 4.0 -41% Underground development, km 4.9 4.7 +3% 15.9 15.5 +2% Ore mined, Kt 289 199 +45% 855 638 +34% Open-pit 91 41 +123% 278 175 +59% Underground 197 159 +24% 578 463 +25% PROCESSING Ore processed, Kt 225 232 -3% 683 658 +4% Gold grade, g/t 7.9  6.3  +24% 6.8   6.2  +9% Gold recovery 70.9% 84.7% -16% 81.1% 79.5% +2% Gold in concentrate, Koz2 29 36 -21% 104 95 +10% Gold produced in dore from carbon, Koz3 2 1 +42% 3 6 -55% Payable gold in concentrate shipped to offtakers, Koz 75 70 +6% 75 70 +6% TOTAL PRODUCTION Gold, Koz 77 72 +7% 78 76 +2% Notes:  (1) To concentrate. (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production upon sale to off-taker or dore production at Amursk POX. (3) Gold produced from carbon at Amursk POX. At Mayskoye, larger volumes of oxide ore were processed in Q3 compared to the previous year which resulted in higher grades and lower recoveries. The Company decided to continue open-pit mining through another pushback at Zone 1. The management believes that the pushback will create substantial value in the current gold price environment. In addition, open-pit ore tonnage will reduce risks at the underground mine where development for the new material handling system (electric conveyor replacing diesel trucks) has started. Shipment of concentrate to China has commenced in August. Chinese off-take market remains strong with substantial demand from new customers. ALBAZINO 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 5.2 5.7 -8% 15.1 16.8 -10% Underground development, km 2.5 2.9 -12% 8.7 7.7 +13% Ore mined, Kt 421 571 -26% 1,401 1,596 -12% Open-pit 249 418 -40% 905 1,184 -24% Underground 172 153 +12% 497 412 +21% PROCESSING Albazino concentrator Ore processed, Kt 429 447 -4% 1,320 1,303 +1% Gold grade, g/t 4.7 4.8 -4% 4.6 4.4 +5% Gold recovery1 88.4% 86.9% +2% 86.8% 85.9% +1% Concentrate produced, Kt 34.9 36.8 -5% 107.6 106.0 +2% Concentrate gold grade, g/t 50.3 51.0 -1% 49.5 46.6 +6% Gold in concentrate, Koz2 56 60 -6% 171 159 +8% Amursk POX Concentrate processed, Kt 41 45 -9% 126 135 -6% Gold grade, g/t 49.2 51.2 -4% 51.5 50.5 +2% Gold recovery 96.5% 96.5% -0% 96.5% 95.2% +1% Gold produced, Koz 65 75 -13% 204 211 -3% TOTAL PRODUCTION Gold, Koz 65 75 -13% 204 211 -3% Notes: (1) To concentrate.  (2) For information only; not considered as gold produced and therefore not reflected in the table representing total production. Included in total production after Dore production at the Amursk POX. At Albazino, quarterly gold production was down 13% y-o-y to 65 Koz driven by lower grade and throughput. The Anfisa open pit, long the mainstay of ore production, is nearing its depletion in early 2022. Gold recovery at the concentrator improved by 2 p.p. y-o-y as the operating team tweaked the reagent addition rates to cope with higher quantities of complex ore from Ekaterina-2. Underground development declined significantly due to challenging geotechnical conditions at deeper levels of the Olga underground mine. Permanent downgrade to underground mine productivity led to the decision to cancel plans to double the size of the underground mine. Production shortfall will be compensated largely by the recently approved Kutyn heap leach project. Kutyn will be developed as part of the Albazino hub with first gold pour expected in Q2 2023. AMURSK POX 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 Concentrate processed, Kt 56 60 -7% 170 171 -0%   Albazino 40 41 -3% 119 122 -3%   Kyzyl 15 15 -3% 44 35 +24%   Veduga - 3 -100% 3 9 -67%   Other1 1 - NA 4 4 +17% Gold recovery 94.5% 94.3% +0% 94.3% 94.3% -0% Average gold grade, g/t 75.5 70.3 +7% 75.3 66.0 +14% Average sulphur grade 14.4% 12.5% +15% 14.1% 12.8% +10% Total gold produced2, Koz 127 133 -5% 387 338 +15%   Albazino 65 62 +3% 176 178 -2%   Kyzyl 62 58 +6% 183 126 +44%   Veduga - 12 -100% 19 28 -33%    Other1 0 0 -3% 10 5 +112% Notes: (1) Purchased concentrates which are included in reportable production in the Albazino segment.   (2) For information only. Already accounted for in production at operating mines. Gold production for the quarter at the Amursk POX decreased by 5% y-o-y to 127 Koz due to the absence of concentrate from Veduga ore. The facility successfully underwent a regular 2-week maintenance shutdown in early October. OMOLON OPERATIONS 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 0.7 1.9 -63% 2.8 5.1 -46% Underground development, Km 3.1 3.3 -7% 10.0 9.9 +2% Ore mined, Kt 607 805 -25% 2,171 2,183 -1%   Open-pit 497 690 -28% 1,828 1,849 -1%   Underground 110 115 -4% 344 334 +3% PROCESSING Kubaka Mill Ore processed, Kt 214 184 +16% 648 612 +6% Grade Gold, g/t 7.1 6.0 +19% 6.9 6.3 +8% Silver, g/t 28 132 -79% 22 90 -75% Recovery1 Gold 95.0% 95.8% -1% 93.8% 95.5% -2% Silver 73.0% 80.8% -10% 73.8% 79.5% -7% Gold production, Koz 49 33 +49% 132 119 +10% Silver production, Moz 0.1 0.6 -76% 0.3 1.4 -76% Birkachan Heap Leach Ore stacked, Kt 411 350 +17% 1,118 897 +25% Gold grade, g/t 1.6 1.2 +33% 2.0 1.2 +71% Gold production, Koz 15 9 +67% 18 11 +67% TOTAL PRODUCTION Gold, Koz 64 42 +53% 150 130 +15% Silver, Moz 0.2 0.6 -70% 0.4 1.4 -74% Note: (1) Technological recovery, includes gold and silver within work-in-progress inventory. At Omolon, gold output for the quarter jumped by 53% y-o-y while silver production was down 70%. Kubaka mill processed gold-rich ore from Birkachan underground and Yolochka through the CIP circuit as opposed to Sopka ore with higher silver content though the Merrill-Crowe circuit in 2019. Heap leach production positively contributed to the total output on the back of stacking of larger volumes of higher-grade ore stockpiles. Open-pit mining was down as Birkachan and Olcha pits are nearing end of mining in Q4 2020.  Preparations have started to commence open-pit mining at the new satellite deposit, Burgali, in Q2 2021. DUKAT OPERATIONS 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Underground development, km 10.6 15.0 -30% 32.8 45.0 -27% Ore mined, Kt 614 642 -4% 1,698 1,894 -10% PROCESSING Omsukchan concentrator Ore processed, Kt 493 506 -3% 1,502 1,535 -2% Grade Gold, g/t 0.5 0.5 -3% 0.5 0.5 -1% Silver, g/t 258 282 -9% 273 291 -6% Recovery1 Gold 84.7% 86.7% -2% 84.8% 86.1% -1% Silver 86.6% 86.8% -0% 86.6% 86.8% -0% Production Gold, Koz 7 7 -5% 21 22 -2% Silver, Moz 3.5 3.9 -9% 11.2 12.1 -8% Lunnoye plant Ore processed, Kt 116 116 +0% 348 348 +0% Grade Gold, g/t 1.3 1.4 -5% 1.4 1.4 +1% Silver, g/t 265 241 +10% 271 258 +5% Recovery1 Gold 88.3% 91.4% -3% 90.3% 87.6% +3% Silver 93.1% 94.5% -1% 92.4% 91.5% +1% Production Gold, Koz 4 5 -9% 14 14 +2% Silver, Moz 0.9 0.9 +4% 2.8 2.7 +3% TOTAL PRODUCTION Gold, Koz 11 12 -6% 35 36 -1% Silver, Moz 4.4 4.7 -7% 13.9 14.8 -6% Notes: (1) Technological recovery, includes gold and silver within work-in-progress inventory. At Dukat, silver grade decreased y-o-y resulting in production being down by 7% to 4.4 Moz. At the same time, the mine exceeded the budget grade on the back of lower than expected dilution enabled by expanding usage of smaller equipment and narrower mining widths. Underground development volumes declined materially following the decommissioning of the Goltsovoye underground mine. In response to material silver price growth, lower-grade areas at Dukat will be systematically re-evaluated to identify potentially economic stopes which were left behind in the period of lower silver prices.  VARVARA 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 10.1 11.4 -12% 30.3 34.1 -11% Ore mined, Kt 725 1,014 -29% 2,209 2,953 -25% PROCESSING Leaching Ore processed, Kt 773 733 +6% 2,303 2,268 +2% Gold grade, g/t 1.4 1.6 -12% 1.4 1.5 -2% Gold recovery1 88.1% 87.4% +1% 88.1% 86.8% +1% Gold production (in dore), Koz 32 31 +1% 99 97 +2% Flotation Ore processed, Kt 176 134 +31% 493 411 +20% Grade Gold, g/t 3.2 1.3 +139% 3.0 1.2 +150% Copper 0.33% 0.49% -33% 0.33% 0.53% -37% Recovery1 Gold 88.7% 69.5% +28% 87.4% 78.4% +11% Copper 84.2% 91.3% -8% 84.6% 91.4% -7% Production Gold (in concentrate), Koz 14 3 +418% 32 7 +340% Copper (in concentrate), Kt 0.5 0.6 -10% 1.3 1.8 -29% Veduga ore toll processed, Kt2 - 35 -100% 30 98 -70% Total ore processed, Kt 949 902 +5% 2,825 2,778 +2% TOTAL PRODUCTION Gold, Koz 46 34 +35% 130 104 +25% Copper, Kt 0.5 0.6 -10% 1.3 1.8 -29% Note: (1) Technological recovery, includes gold and copper within work-in-progress inventory. Does not include toll-treated ore. (2) To be further processed at Amursk POX. Varvara demonstrated strong gold production y-o-y increase of 35% to 46 Koz in Q3 and 25% to 130 Koz in 9M driven by larger volumes of high-grade third-party ore through the flotation circuit and better recoveries attributable to the flow sheet improvements. Average gold grade in ore processed at the leaching circuit was down 12% y-o-y on the back of planned decrease of gold grade at Komar. SVETLOYE 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 0.7 0.3 +115% 2.3 1.1 +108% Ore mined (open pit), Kt 547 406 +35% 1,454 1,273 +14% PROCESSING Ore stacked, Kt 395 369 +7% 1,021 968 +5% Gold grade, g/t 4.0 4.1 -4% 4.0 4.0 -0% Gold production, Koz 39 46 -15% 91 107 -15% TOTAL PRODUCTION Gold, Koz 39 46 -15% 91 107 -15% At Svetloye, quarterly gold production decreased by 15% y-o-y to 39 Koz as larger volumes of ore from the Emmy pit with lower recoveries and slower kinetics were stacked. VORO 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt - 0.4 -100% - 1.2 -100% Ore mined, Kt 132 181 -27% 239 661 -64% PROCESSING Voro CIP Ore processed, Kt 257 264 -3%  786 783 +0% Gold grade, g/t 2.0 4.0 -50%  2.1 3.7 -42% Gold recovery1 83.2% 87.0% -4% 82.6% 86.6% -5% Gold production, Koz 27 26 +1%  63 71 -12% Voro Heap Leach Ore stacked, Kt - 58 -100% 22.2 58 -62% Gold grade, g/t - 1.4 -100% 0.9 1.4 -35% Gold production, Koz 8 2 +410% 14 13 +10% TOTAL PRODUCTION Gold, Koz 35 28 +24% 77 84 -9% Note: (1) Technological recovery, includes gold within work-in-progress inventory. In Q3, Voro saw an increase in production of 24% y-o-y to 35 Koz due to work-in-progress release at both CIP and heap leach facilities. Production from the current operations was down y-o-y as CIP turned to processing lower-grade stockpiles after mining was completed in 2020. DEVELOPMENT UPDATE At Nezhda, mining and construction activities have been progressing on schedule. Installation of flotation and gravity concentration equipment is completed. New boiler house was commissioned with permanent heating established in all buildings including the concentrator. ROM ore crusher and crushed ore reclaim feeders installed. The installation of pylons for the external grid power line commenced. Ore mining started. 3 months ended Sep 30, % change 9 months ended Sep 30, % change 2020 2019 2020 2019 MINING Waste mined, Mt 4.7 - NA 4.7 - NA Ore mined, Kt 200 - NA 200 - NA POX-2 development proceeds on schedule. Construction is currently focused on POX and oxygen station buildings. The autoclave vessel has been successfully installed on its foundation in August. Oxygen plant has been delivered on site. Construction of downstream areas (CIL, desorption/electrolysis) commenced. At Veduga, ore mining ceased in October with focus shifting to building the exploration decline and pre-stripping ahead of the potential approval of the project in 2021. SUSTAINABILITY, HEALTH AND SAFETY There were no fatal accidents during 9M 2020 within Polymetal and the Company's contractors. LTIFR for the reporting quarter grew by 36% y-o-y to 0.15 as 4 minor incidents were recorded in comparison with 3 minor incidents in Q3 2019. During the first 9 months of 2020 there were 8 minor work-related incidents in total, LTIFR stood at 0.10, a decrease of 47% y-o-y. In Q3, the Company's leadership in ESG was reaffirmed by FTSE Rusell which maintained Polymetal as a constituent of FTSE4Good Index Series with 4.4 score (out of possible 5) and 92 percentile. Polymetal was also awarded Best Communication of ESG by IR Magazine.

ISIN:	JE00B6T5S470
Category Code:	MSCH
TIDM:	POLY
Sequence No.:	86343
EQS News ID:	1142340

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