Polymetal International plc

Polymetal increases its interest in Tarutin to 100%

Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce that it has fully consolidated its interest in LLC "Vostochny Basis" (licence holder for the Tarutinskoye copper deposit ("Tarutin")) increasing its stake from 75% to 100%.

Polymetal has purchased an additional 25% from Gerosena Trading Ltd, the owner of the remaining stake in LLC "Vostochny Basis", increasing the Company's interest in Tarutin to 100%. The consideration comprises US$10 million payable by 893,575 newly issued Company shares ("Consideration Shares", 0.2% of Polymetal's issued ordinary share capital post this transaction). The Consideration Shares quantum was calculated by dividing the consideration by Polymetal's closing share price on the day prior to completion. 

Tarutin is a conventional copper-gold skarn deposit that is an excellent fit with Polymetal's processing hub strategy. It is expected to provide an open-pittable and easily accessible ore feed for the Varvara flotation plant located in Kazakhstan, 150 km by road from the mine site.

A reserve estimate for the deposit is expected in Q3 2017, with mining planned to commence in 2018 with the goal to deliver and process up to 300Kt of ore at Varvara in order to produce 4-5 Kt of copper per annum in FY2018-2020. The initial investment is expected to be less than US$5 million as the mine fleet will be transferred from Polymetal's existing operations. 

The Tarutin licence plot covers an area of 1.8 km² in the Chelyabinsk region, 28 km from the town of Chesma (population of approximately 7,000). The infrastructure in the region where the licence area is located is well developed with a railway station located 20 km from the deposit.

The Ore Reserves in accordance with the JORC Code (2012) are estimated as follows:

Tarutin Ore Reserve estimate, as at 1 January 2016

Note: Ore Reserves in accordance with the Company's ownership equal to 100%. Metal prices used for the estimate: Au = US$1,100/oz, Ag = US15.0/oz, Cu = US$5,000/t

"We have decided to consolidate 100% ownership over Tarutin as it is a natural close fit for our Varvara hub and enhances its copper reserve base" - said Vitaly Nesis, Group CEO of Polymetal. "Tarutin is expected to start providing cash flows in the near term".

Аn application has been made to the London Stock Exchange and UKLA on the official list and the Consideration Shares are expected to be admitted to trading on the London Stock Exchange on 2 February 2017. Following admission, the total issued share capital of the Company will comprise 429,155,913 ordinary shares of no par value, each carrying one vote.

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