Polyus reports Ore Reserves of 104 Million Ounces Gold

PJSC Polyus (LSE, MOEX — PLZL) (“Polyus”, the “Company”) announces its Ore Reserves and Mineral Resources estimates as at 31 December 2020, in accordance with JORC Code 2012.

The Company’s total Proved and Probable Ore Reserves have increased 71% to 104 million ounces of gold, compared to 61 million ounces of gold as at 31 December 2019.

The updated estimate primarily reflects the inclusion of Ore Reserves for Sukhoi Log as well as additions at several operating mines, derived from a comprehensive drilling program across the Company’s asset portfolio launched in 2018.

The Measured, Indicated and Inferred Mineral Resources are estimated at 204 million ounces of gold, compared to 188 million ounces of gold as at 31 December 2019.

Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:

Polyus is now confirmed to have the largest reserve base globally, with approximately 97% of these reserves attributable to our operating mines and our flagship greenfield project, Sukhoi Log, where we plan to complete the Bankable Feasibility Study and make a final investment decision on the project in 2022. This is further confirmation of the Company’s ability to maintain long-term sustainable gold production.

We will proceed with exploration activities across the group aimed at expanding our resource base.

Ore Reserves Highlights

1. Polyus’ Ore Reserves are estimated at 104 million ounces of gold, up from 61 million ounces of gold as at 31 December 2019 and allow for mining depletion. This increase mainly reflects:

• The addition of a maiden Ore Reserve estimate of 40 million ounces of gold for Sukhoi Log.
• Revisions to Ore Reserve estimates for Blagodatnoye Kuranakh and Verninskoye, following mining studies update and preparation of new resource models for Blagodatnoye and Kuranakh as a result of a comprehensive exploration program initiated in 2018.
  • At Blagodatnoye, the completed drilling program allowed for pit shell expansion down to −160 mrl from −70 mrl, resulting in an increase of 3.6 million ounces of gold in the Ore Reserve estimate, before accounting for mining depletion.
  • At Kuranakh, Polyus conducted more than 200 kilometres of drilling at several mines of the Kuranakh ore field in 2018-2020. This facilitated more accurate definition of gold mineralization and allowed to update resource models of these mines, resulting in an increase of 2.4 million ounces of gold in the Ore Reserve estimate, before accounting for mining depletion.

2. At Olimpiada, Natalka, and Alluvials Polyus only reported mining depletion.

3. 58% of the Company’s estimated Ore Reserves of gold are located within its operating assets:

• Polyus Krasnoyarsk has the largest share of the Company’s Ore Reserves among operating assets, with 23 million ounces of gold at Olimpiada and 12 million ounces of gold at Blagodatnoye.
• Natalka has an estimated Ore Reserve of 14 million ounces of gold.
• Ore Reserves at Kuranakh, Verninskoye and Alluvials contain 6.4 million ounces, 4.5 million ounces and 0.54 million ounces, of gold respectively.

4. 38% of the estimated Ore Reserves are attributable to Polyus’ key greenfield project, Sukhoi Log

5. An average gold grade in the Company’s Ore Reserve estimates stands at 1.9 g/t, compared to 1.8 g/t as at 31 December 2019.

• Approximately 1,506 million tonnes of Ore Reserve, containing 97 million ounces of gold out of the total 104 million ounces, are expected to be mined by conventional open pit truck-and-shovel or underground mining methods at a gold grade of 2.0 g/t.
• The remaining Ore Reserve totalling 234 million tonnes is lower grade and stored in stockpiles or in situ at the Alluvial operations.

Mineral Resources Highlights

The Company’s Mineral Resources are estimated at 204 million ounces of gold, compared to 188 million ounces as at 31 December 2019. This increase mainly reflects:

• Updated Mineral Resource estimates for Olimpiada, Blagodatnoye, Verninskoye, Kuranakh and Sukhoi Log, following mining studies update and preparation of new resource models.
• Approximately 60% of the Company’s Mineral Resources are attributable to operational mines:
  • Olimpiada’s Mineral Resource is estimated at 49 million ounces of gold.
  • Natalka’s Mineral Resource amounts to 32 million ounces of gold.
  • Blagodatnoye’s Mineral Resource stands at 17 million ounces of gold.
  • Verninskoye and Kuranakh Mineral Resources are estimated to be 14 million ounces and 11 million ounces, of gold respectively.

2021 Exploration Highlights

• The Company continues its deep levels exploration program of Olimpiada and plans to drill approximately 35 kilometres in 2021.
• Polyus is also proceeding with exploration activities at Kuranakh. In 2021, the Company expects to drill more than 100 kilometres, while exploration activities at Kuranakh will continue in 2022 and 2023.
• At Sukhoi Log, Polyus is progressing with its deep-level and flank exploration drilling campaign. As the Sukhoi Log ore body extends below the limits of the verification and exploration drilling, Polyus has initiated additional deep-level drilling aimed at estimating resources below the current exploration horizon. Flank exploration is focused on the Northern and Eastern parts of the ore body in order to define its dimensional limits and explore potential satellite ore formations. The Company plans to drill 40 kilometres at Sukhoi Log in 2021.

Mineral Resource and Ore Reserve estimates

The Company’s Mineral Resource and Ore Reserve estimates are summarized in the Tables below. The effective date for the estimates is 31 December 2020.

Since the 2019 Polyus Annual Review, there have been material changes to some individual Mineral Resource and Ore Reserve estimates. JORC Code Table 1 disclosures for all estimates are available on the Polyus website and can be accessed using the following link: https://polyus.com/en/operations/reserves_and_resources/

Polyus Ore Reserve estimates as at 31 December 2020^1,2,3

Comparison of Polyus Ore Reserve estimates as at 31 December 2020 and as at 31 December 2019

Polyus Mineral Resource estimates as at 31 December 2020^6,7,8

Comparison of Polyus Mineral Resources estimates as at 31 December 2020 and as at 31 December 2019

Competent persons

The Ore Reserve and Mineral Resource estimates are classified and reported according to the JORC Code reporting requirements.

The Competent Persons responsible for each estimate of Ore Reserves and Mineral Resources are:

• Mr Dean Carville, AMC Principal Geologist (Mineral Resource for Olimpiada open pit and underground, Verninskoye open pit, Sukhoi Log open pit, Bamskoye open pit);
• Mr Alex Virisheff, AMC Principal Geologist (Mineral Resource for Blagodatnoye open pit);
• Mr Mohan Srivastava, consultant, Red Dot 3D (Mineral Resource for Natalka open pit and underground);
• Mr Mark Burnett, AMC Principal Geologist (Mineral Resource for Alluvials);
• Mr Nick Szebor, AMC Principal Geologist (Mineral Resource for Razdolinskoye);
• Mr Ingvar Kirchner, AMC Principal Geologist (Mineral Resource for stockpiles for all projects; Titimukhta open pit, Kuranakh open pits, Panimba open pit, Chertovo Koryto and Medvezhy Zapadny open pit).
• Mr Mark Chesher, AMC Principal Mining Engineer (Ore Reserves for open pits at Olimpiada, Verninskoye, Chertovo Koryto, Kuranakh, Blagodatnoye, Titimukhta, Natalka, Sukhoi Log, Panimba and all stockpiles);
• Mr Anthony Cameron, Principal Mining Engineer Cameron Mining Pty Ltd (Ore Reserves for Alluvials);
• Mr Leo Dawson, AMC Principal Mining Engineer (Ore Reserves for Olimpiada underground).

All Competent Persons are Members of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, or approved Recognized Professional Organisations, and have sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Persons as defined in the JORC Code.

In reporting the Mineral Resources and Ore Reserves referred to in this public release, AMC, Cameron Mining Pty Ltd and Red Dot 3D have acted as independent parties, have no interest in the outcomes of Polyus projects, and have no business relationship with Polyus other than undertaking those individual technical consulting assignments as engaged, and being paid according to standard per diem rates with reimbursement for out-of-pocket expenses. Therefore, AMC, Cameron Mining Pty Ltd, Red Dot 3D and the Competent Persons believe that there is no conflict of interest in undertaking the assignments which are the subject of the statements.

Polyus

Polyus is the world’s fourth-largest gold mining company by production volumes and the largest gold miner in terms of attributable gold Ore Reserves. The company demonstrates the lowest production costs among major global gold producers. Its principal operations are located in Siberia and the Russian Far East: Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).

Investor and Media contact

Victor Drozdov, Director Communications & Investor Relations (CIR) Department
drozdovvi@polyus.com

Forward looking statement

This announcement contains or 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 at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.

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¹ The estimates for all deposits are presented on a 100% ownership basis.

² Any minor discrepancies for sums in the table are related to rounding

³ Gold price assumptions:

• US$1,350/oz for those deposits where new mining studies were conducted during 2020 (Blagodatnoye, Kuranakh, Verninskoye, Sukhoi Log, and Panimba)
• US$1,250/oz for Olimpiada, Titimukhta, Natalka, Alluvials, Chertovo Koryto.

⁴ For the Alluvials, cubic metres (m3) have been converted to tonnages using the general bulk density factor of 1.85 t/m3 strictly for the purpose of the summary accumulations. Gold grades have been adjusted from g/m3 to g/t accordingly. Contained gold estimates are not affected.

⁵ Using a gold price assumption of US$1,250/oz

⁶ The estimates for all deposits are presented on a 100% ownership basis.

⁷ Any minor discrepancies for sums in the table are related to rounding.

⁸ Gold price assumptions:

• US$1,650/oz for deposits with new resource models in 2020 (Verninskoye, Blagodatnoye, Kuranakh, Sukhoi Log, Panimba, and Razdolinskoye)
• US$1,500/oz for Olimpiada, Natalka, Chertovo Koryto. Bamskoye, Medvezhy

⁹ For the Alluvials, cubic metres (m3) have been converted to tonnages using the general bulk density factor of 1.85 t/m3 strictly for the purpose of the summary accumulations. Gold grades have been adjusted from g/m3 to g/t accordingly. Contained gold estimates are not affected.

¹⁰ Measured, Indicated and Inferred Mineral Resources 2020 estimate for Razdolinskoye includes estimates for Svetloye, Zmeinoye, Antoninovskoye, and Poputninskoye deposits.

¹¹ Measured Indicated and Inferred Mineral Resources 2019 estimate for Razdolinskoye includes estimates for Zmeinoye and Poputninskoye deposits.