Polymetal International plc (POLY)
Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January 2020
27-Feb-2020 / 10:00 MSK
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Release time IMMEDIATE LSE, MOEX: POLY / ADR: AUCOY
Date 27 February 2020
Polymetal International plc
Ore Reserves, Mineral Resources and Exploration update as at 1 January 2020
Polymetal International plc announces its Ore Reserves and Mineral Resources as at 1 January 2020 in
accordance with the JORC Code (2012)[1] and exploration update for the year ended 31 December 2019.
"Significant growth in Ore Reserves at Kyzyl and a two-fold increase in reserves at Veduga were the
key drivers behind the Group's Ore Reserves extension", said Vitaly Nesis, Group CEO of Polymetal.
"In 2020, we will focus on reserves and resources updates at some of our key development projects and
will continue exploration activities to extend the life of existing mines".
2019 HIGHLIGHTS
? Group Ore Reserves increased by 5% year-on-year to 25.2 Moz of gold equivalent (GE) due to
successful exploration results with the subsequent re-evaluation of Ore Reserves at Kyzyl, Veduga,
Kutyn and initial estimate at Primorskoye (Dukat hub). GE Ore Reserves per share also grew by 5%.
? Mineral Resources (additional to Ore Reserves) declined by 4% year-on-year to 25.4 Moz of GE. The
Lichkvaz disposal and conversion of Mineral Resources to Ore Reserves at Kyzyl, Primorskoye and
Veduga were largely compensated by initial Mineral Resources estimate of Elevator (Varvara hub) and
increase of resources at Albazino and Svetloye.
? The average grade in Ore Reserves remained largely unchanged over the previous year at 3.7 g/t of
GE. It continues to be one of the highest within the sector globally. The average Mineral Resources
grade also remained stable at 5.2 g/t of GE.
? In 2019, the Company maintained conservative price assumptions for both Ore Reserve and Mineral
Resource estimates at US$ 1,200/oz for gold and US$ 15/oz for silver.
? Polymetal completed 198 km of exploration drilling in 2019. Drilling expenses amounted to US$
18.1 million.
Ore Reserves and Mineral Resources summary (1), (2)
1 January 2020 1 January 2019 Change, %
Ore Reserves (Proved + 25.2 24.0 +5%
Probable), gold
equivalent Moz
Gold, Moz 23.7 22.3 +6%
Silver, Moz 116.0 135.0 -14%
Average reserve grade, 3.7 3.8 -2%
g/t
Ore Reserves per share, 0.054 0.051 +5%
GE oz/per share
Mineral Resources 25.4 26.3 -4%
(Measured + Indicated +
Inferred), gold
equivalent Moz
Gold, Moz 20.3 21.0 -3%
Silver, Moz 337.7 354.9 -5%
Average resources grade, 5.2 5.1 +1%
g/t
1) Ore Reserves and Mineral Resources from continuing operations. Kapan mine was classified as a
discontinued operation as at 01.01.2019 and is not included in this estimate; Lichkvaz, Oroch,
Sopka Kvartsevaya, Dalneye and Irbychan mines were classified as discontinued operations as at
01.01.2020 and are not included in this estimate.
2) Mineral Resources are additional to Ore Reserves. Total Ore Reserves and Mineral Resources
numbers include base metals (copper, zinc and lead). PGM Mineral Resources are presented separately
and are not included in the calculation of the gold equivalent. Any discrepancies in calculations
are due to rounding.
2020 OUTLOOK
In 2020, Polymetal will continue to invest in both near-mine and greenfield exploration projects in
order to increase Ore Reserves.
The key objectives are as follows:
? Prepare initial Ore Reserve estimate for East Bakyrchik (Kyzyl)
? Prepare initial Ore Reserve estimate for Prognoz
? Complete Ore Reserve estimate update at Veduga
? Prepare initial Ore Reserve estimate for Voro refractory ore
? Prepare initial Mineral Resource estimate at Talgiy (Albazino)
? Upgrade Mineral Resources categories at Elevator.
The Company also plans to further develop its cooperation with junior exploration companies and enter
into several new strategic partnerships. In 2020, the results of the first field season of the work
of existing junior partners are expected.
Ore Reserves and Mineral Resources structure by metal as at 1 January 2020 (1)
Ore Reserves Mineral Resources
Gold 94% 80%
Silver 5% 17%
Base metals 1% 3%
Total 100% 100%
1) Ore Reserves and Mineral Resources from continuing operations. Lichkvaz, Oroch, Sopka
Kvartsevaya, Dalneye and Irbychan mines were classified as discontinued operations as at 01.01.2020
and are not included in this estimate.
Ore Reserves reconciliation, GE Moz (1)
Ore Metals Depletion Revaluation Change Initial Ore
Reserv to gold (2) in Ore Reserv
es, equival ownershi Reserve es,
01.01. ent p (3) estimate 01.01.
2019 convers 2020
ion
price
ratio
change
(1)
24.0 +0.1 -1.8 +2.5 -0.1 +0.5 25.2
1) For the gold equivalent conversion ratios and applicable processing technology, please refer to
the Appendix.
2) Including the effect of the expected sale and stockpiles write-off of Sopka Kvartsevaya (-199
Koz) and Dalneye (-58 Koz) deposits.
3) Lichkvaz sale.
Ore Reserves and Mineral Resources as at 1 January 2020 (1)
Tonnage Grade Content
Mt GE, g/t GE, Moz
Ore Reserves
Proved 64.3 2.5 5.2
Probable 145.3 4.3 20.0
Proved + Probable 209.5 3.7 25.2
Mineral Resources
Measured 16.5 3.2 1.7
Indicated 44.8 5.0 7.1
Measured + Indicated 61.2 4.5 8.8
Inferred 91.7 5.6 16.5
Measured + Indicated + Inferred 152.9 5.2 25.4
1) Ore Reserves and Mineral Resources from continuing operations. Lichkvaz, Oroch, Sopka
Kvartsevaya, Dalneye and Irbychan mines were classified as discontinued operations as at 01.01.2020
and are not included in this estimate. Mineral Resources and Ore Reserves are reported in
accordance with the JORC Code (2012). Mineral Resources are additional to Ore Reserves. A detailed
table of Mineral Resources and Ore Reserves on a by-mine basis are presented below. PGM Mineral
Resources are presented separately and not included in the calculation of the gold equivalent. Any
discrepancies in calculations are due to rounding.
Exploration areas and volumes (mine site exploration excluded) (1)
Drilling, km
2019 2018
Brownfield
Kyzyl 5.3 7.3
Albazino 13.2 26.8
Mayskoye - 29.5
Varvara hub 45.3 53.2
Voro hub 23.3 32.9
Omolon hub 11.8 21.3
Svetloye hub 2.8 5.9
Dukat hub 0.6 27.6
Okhotsk (sold December 2018) - 15.9
Subtotal 102.4 220.6
Greenfield
Yakutia 43.1 85.7
Nezhda 1.8 25.9
Prognoz 41.4 59.8
Veduga 19.2 -
Kutyn 16.1 19.8
Viksha 11.9 14.7
Urals 3.9 9.3
Other 1.9 -
Subtotal 96.1 129.6
Total 198.5 350.2
1) Any discrepancies in calculations are due to rounding.
EXPLORATION RESULTS
In 2019, exploration was focused on areas in close proximity to the Company's existing assets.
Exploration activities were carried out at 52 licensed properties. 13 new licenses were obtained for
geological studies, exploration and production of gold, silver, PGMs and copper. In total, 198 km of
drilling was completed.
Kyzyl
? The updated Ore Reserve and Mineral Resources estimate for Bakyrchik conducted in 2019
incorporates data from additional 239 diamond drill holes, 41.5 km of drilling, which resulted in
the extension of mineralization zones within the existing ore bodies and update of the resource
model. According to the updated estimate, open-pit reserves now equal to 3.9 Moz of gold with an
average grade of 5.6 g/t. Underground reserves increased to 4.3 Moz with an average grade of 7.1
g/t. Additional Mineral Resources declined by 374 Koz to 3.5 Moz with an average grade of 5.4 g/t
due to conversion to Ore Reserves. Life of open-pit increased from 10 years to 14 years.
? In 2019, Polymetal continued exploration drilling at Kyzyl's second ore zone, East Bakyrchik
(Promezhutochniy and Glubokiy Log sections), to study the possibility of the open-pit expansion. 24
drill holes totaling 5.3 km of drilling were completed resulting in clarification of ore bodies'
contours and the mineralization boundaries.
? In 2020, the Company plans to update Ore Reserve and Mineral Resource estimate to include the
results of East Bakyrchik evaluation.
Albazino
? In 2019, exploration activities were focused on additional prospecting of the Mineral Resources
at Ekaterina 2 mine. Additional Mineral Resources increased by 159 Koz to 1.8 Moz GE with an
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