Financial results for the second half of 2024 and full year 2024

PJSC Polyus (MOEX — PLZL) (“Polyus”, the “Company”, and together with the Company subsidiaries, the “group”) has today released its consolidated financial results for 2H 2024 and FY 2024.

FY 2024 highlights

1. Total gold sales volumes in 2024 increased 11% compared to the previous year and amounted to 3,107 thousand ounces, reflecting higher production volumes across all operating assets of the group except for Irkutsk business unit. A difference between sales and the total gold output (3,002 thousand ounces) reflects planned sales of previously accumulated gold.
2. Revenue for the full year amounted to $7,343 million, up 40% compared to 2023. This is attributable to the aforementioned increase in gold sales volumes and the higher average realized gold price compared to the previous year.
3. The group’s TCC for 2024 increased 6% year-on-year to $383 per ounce. This growth reflects an increase in the MET due to higher average realized gold price during 2024 and introduction of the additional MET ratio since 1 June 2024. The year-on-year increase in TCC was also driven by the ongoing consumables price inflation, wage indexation, increase in electricity tariff, as well as lower grades in ore processed at Olimpiada and Irkutsk business unit. These factors were partially offset by higher head grades at Blagodatnoye and Natalka, rouble depreciation and an increase in by-product credit of antimony-containing flotation concentrate, as well as improved recovery rate at Natalka due to launch of the flotation circuit at the Mill.
4. Adjusted EBITDA in 2024 rose 49% year-on-year reaching new historical high of $5,677 million and followed by EBITDA margin expansion. Main drivers were higher gold sales volumes and higher gold prices during the reporting period
5. Capital expenditures (“capex”) increased from $1,023 million in 2023 to $1,257 million in 2024, as a result of higher capital spending across nearly all business units.
6. The net debt (incl. derivatives)/adjusted EBITDA ratio declined to 1.1x at the end of 2024, compared to 1.9x at the end of 2023, reflecting lower net debt position and adjusted EBITDA growth over the last twelve months.

2H 2024 highlights

1. Total gold sales volumes in the second half of 2024 rose to 1,850 thousand ounces, compared to 1,257 thousand ounces in the first half of 2024.This growth was driven by higher production volumes at Natalka and Kuranakh, as well as planned sales of previously accumulated gold, primarily in the form of antimony-containing floatation concentrate.
2. Revenue for the second half of 2024 moved up 69% half-on-half and stood at $4,610 million, reflecting the aforementioned growth in gold sales volumes as well as the higher average realized gold price, compared to the first half of 2024.
3. The group’s TCC for the second half of 2024 decreased 16% half-on-half to $355 per ounce. This was driven by an increase in the share of lower-cost flotation concentrate in total gold sold and higher by-product credit from sales of antimony-rich flotation concentrate at Olimpiada ($65 per ounce in 2H2024, compared to $6 per ounce in 1H2024) as well as rouble depreciation. The aforementioned positive factors were partially offset by an increase in the MET due to higher average realized gold price and introduction of the additional MET ratio since 1 June 2024, as well as wage indexation.
4. Adjusted EBITDA for the second half of 2024 amounted to $3,656 million, an 81% increase compared to $2,021 million in the first half of 2024, as a result of higher gold sales volumes, higher gold prices during the reporting period and lower TCC on a per ounce basis.
5. Capital expenditures (“capex”) for the second half of 2024 rose to $816 million, from $441 million in first half of 2024. This increase reflects higher capital spending across all business units.

OUTLOOK FOR 2025

Production guidance

Polyus anticipates gold production for the full year 2025 to be within the range of 2.5 - 2.6 million ounces. The year-on-year decline in production is expected to be mainly driven by lower grades in ore processed at Olimpiada, since Polyus completed mining activities at the fourth stage of the Vostochny pit and intensified stripping activities at the fifth stage of the pit. This process will also continue through 2026 and 2027 after which grades at Vostochny pit will recover. Thus, the Company also expects its annual production to be between 2.5 and 2.6 million ounces in 2026-2027. Meanwhile the Company is focused on launching production on its greenfield projects (Sukhoi Log, Chulbatkan and Chertovo Koryto), which is expected to bring the Company’s annual output to 6 million ounces of gold by 2030.

TCC guidance

Polyus expects a year-on-year increase in TCC and has set a guidance range of $525 - 575/oz for 2025. Despite the ongoing implementation of cost-containment initiatives across the group, the Company anticipates that the following factors will negatively affect the group’s cost performance in 2025 compared to 2024:

• A change in the structure of the group’s gold output. Polyus expects a reduction in the share of lower-cost Olimpiada in the Company’s total gold production structure attributed to a planned decline in grades in ore mined following the completion of mining activities at the fourth stage of the Vostochny pit.
• Absence of lower-cost flotation concentrate from Olimpiada in the total volume of gold sold and a decrease in by-product credit on the back of completion of mining of antimony-containing ore.
• An increase in the MET rate due to the introduction of the additional per ounce levy of 10% on the excess of the LBMA gold price over the level of $1,897/oz.
• Inflationary factors in key consumables and labour.

Capex guidance

The Company has set its capital expenses guidance in the range of $2,200-2,500 million.

The anticipated year-on-year increase in capex reflects the following factors:

• Active stage of Sukhoi Log project construction.
• Construction of the new 12.5 mtpa Kuranakh heap leaching complex and the extension of the existing 1.5 mtpa Kuranakh heap leaching facility to 5.0 mtpa.
• Transition to the implementation phase of Chulbatkan and Chertovo Koryto projects.
• Partial capex roll-over from 2024.
• Inflationary pressure.

Dividend update

The Board of Directors has resolved to update the company’s dividend policy, aligning it more closely with today`s market environment and strategic objectives.

Under the updated framework, the Company will still target a dividend payout ratio of 30% of its EBITDA. Payments are targeted no less than twice annually, contingent upon a number of fundamental factors, ensuring compliance with investor interests and maintaining financial flexibility to support high-impact growth initiatives.

The Board of Directors (the “Board”) may recommend to the General Shareholder Meeting to approve dividends exceeding the target payout ratio of 30% of EBITDA.

In addition it is expected that on the 10th March 2025 the Board of Directors will consider the dividend payment based on the results of 4Q 2024 and announce their recommendation for the Annual General Meeting of Shareholders ("AGM"). According to the dividend policy the total amount of dividends could amount to not less than 30% of the Company’s EBITDA for the 4Q 2024 per the outstanding shares.

Corporate governance

The Company expects that the Board will consider the recommendation to the AGM to approve the new Board composition, which will include three Independent Directors.

Events after the reporting date

Stock split

The Extraordinary General Meeting of Shareholders (“EGM”) held on 03 February 2025 approved the decision to split the Company’s stock at a ratio of 1:10. The stock split is expected to be completed within 2 months from the EGM resolution approving the split.

After completion of the stock split procedure the nominal value of the stock will be reduced 10-fold, with a simultaneous 10-fold increase in the total number of shares outstanding. At the same time, the total share capital of the Company and the total par value of the shares owned by the shareholders will not change.

The Company believes that completion of the stock split will increase the liquidity of Polyus’ shares and their accessibility, which will have a positive impact on the attractiveness of the Company's stock to a broader range of investors.

Comparative financial results

Review of external factors

The group’s results are significantly affected by movements in the price of gold and currency exchange rates (principally the RUB/USD rate).

Gold price dynamics

The market price of gold is a significant factor that influences the group’s profitability and operating cash flow generation. The LBMA gold price reached new record highs during 2024 – $2,778 per ounce, while the average LBMA gold price was $2,389 per ounce, 23% above the 2023 average of $1,943 per ounce.

LBMA gold price dynamics in 2024 $/oz

Rouble exchange rate dynamics

The group's revenue from gold sales is linked to USD, whereas most of the group’s operating expenses are denominated in Russian roubles (RUB). The strengthening of the RUB against the USD can negatively impact the group’s margins by increasing the USD value of its RUB-denominated costs, while a weaker RUB positively affects its margins as it reduces the USD value of the group’s RUB-denominated costs. In 2024, the average USD/RUB exchange rate was 92.57, compared to 85.25 in 2023.

RUB/USD dynamics in 2024

Inflationary trends

All of the group’s operations are located in Russia. The rouble-based annualised Russian Consumer Price Index (CPI), calculated by the Federal State Statistics Service, was at 9.5% as of the end of 2024, compared to 7.4% as of the end of the previous year. Inflation negatively affects the group’s costs performance. To mitigate negative impact of inflation on the group costs performance, the Company estimates possible inflation levels, incorporates them into its cost planning, and consistently adopts cost reduction activities at its operations.

Total Cash Costs

In the second half of 2024, the group’s TCC decreased 16% to $355 per ounce compared to $423 per ounce in the first half of 2024. This was driven by an increase in the share of lower-cost flotation concentrate in total gold sold and higher by-product credit from sales of antimony-rich flotation concentrate at Olimpiada ($65 per ounce in 2H2024, compared to $6 per ounce in 1H2024) as well as rouble depreciation. The aforementioned positive factors were partially offset by an increase in the MET due to the higher average realized gold price and introduction of the additional MET ratio from 1 June 2024, as well as wage indexation. These factors were common to all operations of the group.

In 2024, the group’s TCC increased 6% year-on-year to $383 per ounce. This growth reflects an increase in the MET due to the higher average realized gold price during 2024 and the introduction of the additional MET ratio from 1 June 2024. The year-on-year increase in TCC was also driven by the ongoing consumables price inflation, wage indexation, increase in the electricity tariff as well as lower grades in ore processed at Olimpiada and Irkutsk business unit. These factors were partially offset by higher head grades at Blagodatnoye and Natalka, rouble depreciation and an increase in by-product credit of antimony-containing flotation concentrate, as well as improved recovery rate at Natalka due to the launch of the flotation circuit at the mill.

TCC performance by mine, $/oz⁹

In the second half of 2024, TCC at Olimpiada decreased 32% half-on-half to $256 per ounce, primarily driven by an increase in the share of lower-cost flotation concentrate in total gold sold and higher by-product credit from sales of antimony-rich flotation concentrate. In 2024, TCC at Olimpiada increased 6% year-on-year to $303 per ounce due to a decrease in head grades and the aforementioned common negative factors, which were partially offset by rouble depreciation and an increase in by-product credit of antimony-containing flotation concentrate.

TCC at Blagodatnoye in the second half of 2024 totaled $421 per ounce, a 14% increase compared to the first half of 2024, due to the aforementioned common factors and higher maintenance expenses, as well as lower head grades. In 2024, TCC at Blagodatnoye remained broadly flat and amounted to $398 per ounce. The aforementioned common negative factors and higher maintenance expenses were mostly mitigated by higher grades in ore processed (2.00 grams per tonne in 2024 compared to 1.66 grams per tonne in 2023) and rouble depreciation.

At Natalka, TCC in the second half of 2024 decreased 12% compared to the first half of the year to $450 per ounce, reflecting higher head grades (1.61 grams per tonne in the second half of 2024 compared to 1.42 grams per tonne in the first half of 2024) and an increase in recovery rate by 6.6 ppts half-on-half to 78.3% due to the launch of the flotation circuit at the Natalka Mill in August 2024. TCC for the full year amounted to $475 per ounce, a 3% decline compared to 2023.

In the second half of 2024, TCC at Irkutsk business unit, which includes the results of Verninskoye business unit and of pilot processing of Sukhoi Log's ore at Verninskoye Mill, rose 10% and amounted to $580 per ounce. In 2024, TCC at Irkutsk business unit increased 22% year-on-year to $555 per ounce. In addition to the aforementioned negative factors, TCC were also affected by lower grades in ore processed (2.03 grams per tonne in 2024 compared to 2.32 grams per tonne in 2023).

At Kuranakh, TCC in the second half of 2024 marginally decreased on the previous half of the year and stood at $567 per ounce. This mainly reflects a seasonal growth of share of lower-cost gold produced from the heap leaching facilities in total volumes of gold sold, as well as rouble depreciation. The lower average grades in ore processed at the Kuranakh mill and at the heap leaching facilities were the key negative factors affecting Kuranakh’s cost performance in the second half of 2024. In 2024, TCC at Kuranakh declined 4% year-on-year to $572 per ounce, mainly reflecting the positive effect from FX movements, which offset the common negative factors.

All-in sustaining costs (AISC)

In the second half of 2024, the group’s AISC remained broadly flat on the previous half of the year and amounted to $769 per ounce.

In 2024, the group’s AISC rose 5% compared to the previous year and totalled $767 per ounce. In addition to higher TCC, the increase in the group’s AISC on a year-on-year basis was at the same time driven by higher levels of stripping activities in line with the mining schedules at Olimpiada, Blagodatnoye and Natalka, as well as an increase in sustaining capital expenditures. These factors were partially offset by lower commercial logistics costs due to lower volumes of antimony-containing flotation concentrate sales.

Debt management

The Company’s gross debt decreased to $8,742 million, compared to $9,050 million as at the end of 2023.

As at 31 December 2024, the group`s cash and cash equivalents and bank deposits increased 47% year-on-year to $2,509 million (31 December 2023: $1,711 million). The Company’s net debt declined to $6,233 million (31 December 2023: $7,339 million).

The change in the net debt position is mostly attributed to solid financial results, efficient liability management during the full year 2024, and the sale of a 100% stake in the Alluvials business unit in the first half of 2024 as well as the sale of the Degdekan deposit (Magadan Geological Exploration Company LLC). During 2024, the group also drew down additional cash under existing credit facility agreements. Meanwhile, redemption of Notes due 2024 was offset by the issue of 5.5-year gold bonds with a coupon rate of 3.10% per annum and 5-year local USD bonds with a coupon rate of 6.20% per annum. Additionally on the back of 9 months of 2024 results the Company paid out dividends for 9M 2024 and 4Q 2023.

As the gold price is denominated in USD and the group’s revenue is linked to the USD, the Company’s strategy is to have debt pre-dominantly denominated in hard currency. For swap liabilities in roubles for liabilities in hard currency, the Company entered into a series of cross-currency and interest rate swaps throughout 2024. This allowed the Company to maintain the average net debt effective interest rate at a comparatively low level of 7.5%.

Debt maturity schedule (as at 31 December 2024), $ million¹⁰

Prudent liability management made it possible to have a comfortable debt maturity schedule with major repayments planned for the same year as the launch of Sukhoi Log`s first line.

Net debt and net debt/adjusted EBITDA (last 12 months) ratio

At the end of 2024, the net debt (incl. derivatives)/adjusted EBITDA ratio declined to a comfortable level of 1.1x, compared to 1.9x at the end of 2023, reflecting a lower net debt position and adjusted EBITDA growth over the last twelve months.

Capex

In the second half of 2024, capital expenditures increased to $816 million from $441 million in the first half of 2024, reflecting higher capital spending across all business units.

In 2024, capital expenditures increased to $1,257 million, from $1,023 million in the previous year. This growth was driven by higher capital expenditures across nearly all business units.

The Company continues to progress its growth projects. Key highlights:

At Olimpiada, the Company continued to procure mining fleet for the 5th stage of the open-pit and proceeded with the modernization of the BIO complex.

At Blagodatnoye, Polyus continued to advance with the construction and installation of equipment for Mill-5. Notable installations to date include SAG mill, ball mill for the flotation concentrate, flash flotation and desorption circuits. Additionally, key infrastructure at the Mill-5 site, such as power facilities, overpasses, and storage infrastructure etc, is nearing completion. The equipment for the in-pit crushing and conveying (IPCC) system has been fully delivered with its installation currently underway.

At Natalka, the Company completed the main scope of works to launch the flotation circuit at the Mill.

At Kuranakh, Polyus is in the active phase of the capacity extension at the existing heap leaching facility (from 1.5 to 5.0 mtpa), including supply and installation of the main processing equipment, and related construction and installation. In 2024, the Company started the active phase of the construction of the new heap leaching facility at the Southern cluster with annual processing capacity of 12.5 mt.

At Sukhoi Log, the Company completed the main scope of work on the off-site power infrastructure and progressed with construction and installation of infrastructure facilities, including fuel and lubricants tank farm, access roads, shift camp. During 2024, Polyus completed the bulk of construction work on the road between Sukhoi Log and Verninskoye (within the project of the pilot processing of Sukhoi Log’s ore at the Verninskoye Mill); construction of infrastructure facilities is also nearing completion.

Capex breakdown¹¹

In the second half of 2024, the total cash spent on the purchase of PP&E increased to $897 million, compared to $579 million in the first half of 2024.

In 2024, the total cash spent on the purchase of PP&E increased to $1,476 million, compared to $1,188 million in 2023.

Enquiries

Investor and Media contact

+7 (495) 641 33 77
ir@polyus.com

Forward looking statement

This announcement may contain “forward-looking statements” concerning Polyus and/or Polyus Group. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “continue”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus Group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus Group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as of the date of this announcement. Polyus and/or any Polyus Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.

¹Gold production is comprised of 2,791 thousand ounces of refined gold and 211 thousand ounces of gold in flotation concentrate in the 2024. Gold sold is comprised of 2,810 thousand ounces of refined gold and 297 thousand ounces of gold in flotation concentrate in the 2024. Both gold production and gold sold do not include 11.1 thousand ounces of alluvial gold of Razdolinskoye and Ugakhan deposits capitalized in consolidated financial statements.
²Adjusted net profit is defined by the group as net profit / (loss) for the period adjusted for impairment loss / (reversal of impairment), unrealised (gain) / loss on derivative financial instruments, foreign exchange (gain) / loss, gain on acquisition of subsidiaries and associated deferred and current income tax related to such items.
³Adjusted EBITDA is defined by the group as profit for the period before income tax, depreciation and amortisation, (gain) / loss on derivative financial instruments and investments (including the effect of the disposal of a subsidiary and subsequent accounting at equity method), finance costs, interest income, foreign exchange loss / (gain), impairment loss / (reversal of impairment), (gain) / loss on property, plant and equipment disposal, expenses associated with an equity-settled share-based payment plan, gain on acquisition of subsidiaries and special charitable contributions as required to ensure calculation of the Adjusted EBITDA is comparable with the prior period.
⁴Capital expenditure figures are presented on an accrual basis.
⁵TCC is defined by the group as the cost of gold sales, less property, plant and equipment depreciation and amortisation and change in allowance for obsolescence of inventory and adjusted by non-monetary change in inventory. TCC per ounce sold is the cost of producing an ounce of gold, which includes mining, processing and refining costs. The group calculates TCC per ounce sold as TCC divided by total ounces of gold sold for the period. The group calculates TCC and TCC per ounce sold for certain mines on the same basis, using corresponding mine-level financial information.
⁶AISC is defined by the group as TCC plus selling, general and administrative expenses, stripping activity asset additions, sustaining capital expenditures, unwinding of discounts on decommissioning liabilities, provision for annual vacation payment, employee benefit obligations cost, and change in allowance for obsolescence of inventory less amortisation and depreciation included in selling, general and administrative expenses. AISC is an extension of TCC and incorporates costs related to sustaining production and additional costs which reflect the varying costs of producing gold over the life-cycle of a mine. The group believes AISC is helpful in understanding the economics of gold mining. AISC per ounce sold is the cost of producing and selling an ounce of gold, including mining, processing, transportation and refining costs, general costs from both mine and alluvial operations, and the additional expenditures noted in the definition of AISC. The group calculates AISC per ounce sold as AISC divided by total ounces of gold sold for the period.
⁷Net debt is defined as non-current borrowings plus current borrowings less cash and cash equivalents and bank deposits. Net debt also includes assets and liabilities under cross-currency and interest rate swaps at the reporting date. Net debt excludes derivative financial instrument assets/liabilities other than cross-currency and interest rate swaps, site restoration and environmental obligations, deferred tax and other non-current liabilities. Net debt should not be considered as an alternative to current and non-current borrowings, and should not necessarily be construed as a comprehensive indicator of the group's overall liquidity.
⁸The group calculates net debt (incl. derivatives) to Adjusted EBITDA as net debt (including derivatives) divided by Adjusted EBITDA for the last twelve months
⁹Irkutsk business unit includes results of Verninskoye business unit and the results of pilot processing of Sukhoi Log's ore at Verninskoye Mil
¹⁰The breakdown is based on actual maturities and excludes lease liabilities recognized under IFRS 16 as of 31 December 2024 in the amount of $86 million.
¹¹The capex above presents the capital construction-in-progress unit as allocated to other business units, whilst in the consolidated financial statements capital construction-in-progress is presented as a separate business unit.
¹²Reflects expenses related to the exploration business unit and other unallocated CAPEX.
¹³Including capitalized stripping costs.