PETROPAVLOVSK PLC€¦ · Some statements contained in this presentation or in documents referred to in it are or may be forward-looking statements, ... Nevsun Resources and ... Corporate

PETROPAVLOVSK PLCInvestor PresentationOctober 2017

Simple. Focused. Growth.

Some statements contained in this presentation or in documents referred to in it are or may be forward-looking statements, including

references to guidance. Such statements reflect the Company’s current views with respect to future events and are subject to risks,

assumptions, uncertainties and other factors beyond the Company’s control that could cause actual results to differ from those expressed in

such statements. Although the Company believes that such forward-looking statements, which speak only as of the date of this presentation,

are reasonable, no assurance can be given that they will prove to be correct. Therefore, you should not place undue reliance on these

statements

There can be no assurance that the results and events contemplated by the forward-looking statements contained in this presentation will, in

fact, occur. The Company will not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect

events, circumstances or unanticipated events occurring after the date of this presentation, except as required by law or by any appropriate

regulatory authority. Nothing in this presentation or in documents referred to in it should be considered as a profit forecast.

The past performance of the Company and its securities is not, and should not be relied on as, a guide to the future performance of the

Cautionary and Forward-Looking Statements

Company and its securities

This presentation does not constitute, or form part of or contain any invitation, recommendation or offer to any person to underwrite,

subscribe for, buy, sell, otherwise acquire, exchange or dispose of any shares or securities in the Company or advise persons to do so in any

jurisdiction, including, but not limited to, the Russian Federation, nor shall it, or any part of it, form the basis of or be relied on in any

connection with or act as an inducement to enter into any contract or commitment therefore or engage in any other investment activity. In

particular, this presentation and the information contained herein are not an offer of securities for sale in the United States. This presentation

does not constitute an advertisement of any securities in the Russian Federation

No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on its completeness

and no liability whatsoever is accepted for any loss howsoever arising from any use of this presentation or its contents or otherwise in

connection therewith.

The development and production plans and estimates set out herein represent the current views of the Company's management. The

Company’s Board reviews the production estimates on an ongoing basis. All planning is subject, inter alia, to available funding and capital

allocation decisions

English law and English courts will have exclusive jurisdiction over any disputes arising from or connected with this presentation

2

>16Mtpa of RIP(3)

processing capacity4 open pit gold

mines, c.6.7Moz of gold produced to

Production >400koz p/a @ c.37% EBITDA

Margin(4)

c.20.2Moz of JORC Resources(2)

including c.8.0Moz of

Petropavlovsk at a GlanceA leading Russian gold miner, operating since 1994

Part of FTSE SmallCap Index,

c.US$350m market cap(5)

gold produced to date(1)

Experienced management team

and skilled workforce

33(1) As at 30 September 2017, including gold produced by the company's alluvial operations and JVs (2) As at 31 Dec 2016, in accordance with the JORC Code. Resources (M,I&I) are inclusive of Reserves (3) Resin in pulp (4) Underlying EBITDA Margin was 37.5% in H1 2017 and 37.0% in 2016 (5) As at 30 September 2017 (source: Bloomberg)

Marginincluding c.8.0Moz of Reserves

High untapped exploration potential

POX Hub staged commissioning scheduled from

Q4 2018

Corporate GovernanceDispersed ownership structure and highly reputable Board of Directors

Board of DirectorsShareholder Structure(1)

Renova Group(2)

22.3%

Sothic Capital10.6%

D.E. & Shaw & Co.

Prudential / M&G

Other42.8%

Vailaski Holdings9.6%

Mr Ian Ashby, Independent Non-Executive Chairman Appointed to the BoD in June 2017 Mr Ashby has 35 years of international experience in the minerals industry. In his most recent

executive role in 2006-2012, he was President of BHP Billiton’s Iron Ore division Mr Ashby holds NED positions on the board of Anglo-American plc, Nevsun Resources and

Alderon Iron Ore Corporation

Mr Sergey Ermolenko, Interim Chief Executive Officer Appointed as Interim Chief Executive Officer and a Director of the Company on 18th July 2017

following the resignation of Dr Pavel Maslovskiy Mr Ermolenko has held top managerial positions with the Group since its inception in 1994. He

was CEO of Petropavlovsk from December 2011 to November 2014

Mr Andrey Maruta, Chief Financial Officer Appointed to the BoD in January 2011 Mr Maruta joined the Group in 2003 as Group Chief Accountant

4

& Co.7.8%

/ M&G6.9%

Petropavlovsk PLC is listed on the Main Market of the London stock exchange (since 2009)

The largest shareholder is Renova Group(2)

with a holding of 22.3%

The board composition was substantially renewed in June 2017, when a new Non-Executive Chairman and 3 new NEDs were elected. The new board is committed to delivering strong results in line with the Company’s strategy

(1) Reflects % of interest in voting rights of ordinary shares (2) Renova Group is a stakeholder and strategic investor in a number of world-class companies such as UC Rusal, Sulzer, Schmolz + Bickenbach and others. Renova encompasses direct investment funds and management companies operating in a number of sectors. Renova’s 22.3% holding consists of Renova with 14.76% + Metkombank with 4.42% + Lamesa with 3.17%Note: Figures may not add up due to rounding

Mr Maruta joined the Group in 2003 as Group Chief Accountant Appointed Deputy Finance Director in 2005, Finance Director in 2006 and Chief Financial

Officer in 2012 Mr Maruta is a fellow member of The Association of Chartered Certified Accountants

Mr Bruce M. Buck, Senior Non-Executive Independent Director Appointed to the BoD in June 2017 Mr Buck has been practicing law in Europe since 1983, including at

Skadden, Arps, Slate, Meagher and Flom where his work as a partner, included a broad range of mergers, acquisitions and capital market transactions . Mr Buck has been professionally involved in Central and Eastern Europe, and particularly in Russia, since 1990

Mr Buck is also the Chairman and a Director of Chelsea FC PLC

Mr Garrett Soden, Independent Non-Executive Director Appointed to the BoD in June 2017 Mr Soden has extensive experience as a senior executive and board member of public companies

in the natural resources sector. He has worked with the Lundin Group for the last decade Mr Soden is currently President and CEO of Africa Energy Corp., a Canadian oil and gas

exploration company focused on Africa

Mr Vladislav Egorov, Non-Executive Director Appointed to the BoD in June 2017 Mr Egorov has been practicing law in Russia since 1998 Mr Egorov is currently a Deputy M&A and Project Director at Renova Group, the Company’s

major shareholder

Experienced Management Team and Skilled WorkforceAverage industry experience of senior management of more than 30 years

Many of the Group’s senior management team, including the Interim CEO and the COO, as well as the majority of the middle level management, have been with the Group since inception

The Amur region is home to a large pool of highly qualified individuals with gold mining experience due to the historic presence of the industry

5

Nikolai VlasovGroup Chief Geologist

Vladimir DementievGeneral

Manager, Irgiredmet (Scientific Institute)

Prof. Yakov SchneersonDirector of

GidrometallurgiyaR&D (Scientific Institute)

Valery AlekseevGroup Head

of Construction and Engineering

Dr Alya SamokhvalovaDeputy CEO,

Strategic Development

Andrey MarutaCFO

Dmitry ChekashkinCOO

Sergey ErmolenkoActing CEO

400

500

600

700

12Mtpa

14Mtpa

16Mtpa

18Mtpa

20Mtpa

MAL RIP expanded +

ALB RIP commissioned

POX construction begins

Plantexpansionsdelivered:

PIO, MAL, ALB

Listed on AIM

POK RIP commissioned

Albyn licence +Malomir main

site licenceacquired

Moved to LSE Main Board

PIO RIP plant expanded

PIO RIP expanded

MAL RIP commissioned

RIP + HL Processing

Capex (US$m)

Corporate OverviewTrack Record: Processing Growth…Bulk Tonnage Miner

66

0

100

200

300

400

0Mtpa

2Mtpa

4Mtpa

6Mtpa

8Mtpa

10Mtpa

1999a 2002a 2003a 2004a 2005a 2006a 2007a 2008a 2009a 2010a 2011a 2012a 2013a 2014a 2015a 2016a

First goldfrom PIO

POK RIP expanded

First goldfrom POK

First gold fromMAL

First goldfrom ALB

PIO RIP commissioned

JORC Resources (incl. Reserves)

10.112.3 13.8

2.4

3.8 5.1

5.9

6.6 7.2

11.2

20Moz

25Moz

30Moz

35Moz

Corporate OverviewTrack Record: Resource Growth…Sustaining Long Term Production

77

Depletion + DisposalsRefractory Resources

4.96.8

5.2

13.0 12.8 12.1 12.09.3 9.3 9.3

3.32.1 6.0

10.112.3

11.713.8

14.0 14.4

10.4

1.01.4

1.9

Moz

5Moz

10Moz

15Moz

2007a 2008a 2009a 2010a 2011a 2012a 2013a 2014a 2015a 2016a

Non-Refractory Resources

(1) 2016 data is provisional, calculated as YE 2015 resources adjusted for 2016 depletion and disposals and does not take into account any additions made during the year. 2016 R&R statement figures expected to be published in April 2017

Potential for further resource growth, production

growth + cost reduction

Pioneer under-explored underground potential

Malomir under-explored underground potential

POX expansion upside

416

Group Production (Koz) Upside

Corporate OverviewConsolidated 5 Year Plan

420 to

460

88

POX high-grade upside

Highly prospective greenfield and brownfield

surface exploration potential within c.3,400km2

licence footprint

2016a 2017e 2018e 2019e 2020e 2021e

Note: bar charts not to scale

Group AISC (US$/oz)

807

2016a 2017e 2018e 2019e 2020e 2021e

Ongoing optimisation of the reserves and resources to maximise profitability Further exploration to expand underground reserves Further exploration of the identified refractory targets Potential licence acquisitions adjacent to the existing infrastructure

Maintain and expand reserve and resource base

Bulk tonnage open pit producer from non-refractory ore

Production from Non-refractory + refractory oreOpen pit + Underground mining

Petropavlovsk 2016 Petropavlovsk 2019

Corporate StrategyConservative strategy focused on organic growth

99

Unlock existing refractory and underground gold

reserves

Continue optimising costs and strengthening

profitability

Strengthen the balance sheet and liquidity position

Maintain stringent HSE standards

Focus on operation efficiencies and cost optimisation on new projects and continued operations

Hedging of gold price as a complementary measure

Financing of capital expenditures with operating cash flows Leverage below 2.5x Net Debt / EBITDA

Commitment to providing occupational and environmental safety Regular reviews by the HSE committee of the Board Management KPIs include LTIFR and greenhouse gas emissions

Completion of the POX project to treat refractory ore Development of underground operations at Pioneer and Malomir

Assets SnapshotA solid foundation with mining operations in the Russian Far East

St Petersburg RDC Hydrometallurgy

MoscowPetropavlovsk Moscow PHM Engineering

Amur region –production mines

Pioneer

Albyn

Malomir

Pokrovskiy

LondonPetropavlovsk plcCorporate headquarters

Operating mine

Underground development

POX

Analytical labs

R&D

Offices

BlagoveschenskPetropavlovsk Amur RegionRegis ExplorationKapstroi Construction

IrkutskIrgiredmet Institute

IRC Limited (associate company)Amur region – Kuranakh mineJewish autonomous region – K&S mine

1010

Highland Gold 3%

Polymetal 9%

Kinross Gold 8%

Uzhuralzoloto 6%

Petropavlovsk 5%

Nordgold 3%

262.4tonnes

Gold Mine Production in Russia (2016)(1)

Polyus 23%

Other 43%

(1) Source: Russian Union of Gold ProducersNote: Figures may not add up due to rounding10

Operations Overview

1111

Excellent emerging market opportunities

Historic gold province + established mining tradition (>100 yrs)

50% of Russian reserves are in Russia Far East

c.50% of current Russian gold production in Russia Far East

Well educated, skilled workforce

Active State investment in infrastructure

20% corporate tax

Russia Far EastEstablished Gold Belt

1212

Khabarovsk

Yakutia

Pokrovskiy POX Hub

Pioneer(40km from

POX hub)

Malomir(670km from

POX hub)

Albyn

Operations OverviewPetropavlovsk Asset Map

1313

CHINA

Zabaykalsk

EAO

Pokrovskiy POX Hub

Pilot POX Plant

Albyn

Operating Mine

Underground

POX

Analytical Labs

Hydro PlantBlagoveschchensk

Operations OverviewGroup Production Summary FY 2015 – 9m 2017

Mining Units 9m 2017 FY 2016a FY 2015a

Total material moved m3 000 44,780 61,947 74,775

Ore mined t 000 13,960 10,798 13,960

Average grade g/t 0.8 1.1 1.2

Processing Units 9m 2017 FY 2016a FY 2015a

RIP

Total milled t 000 12,410 16,166 15,910


Gold content Koz 332 472 581

Recovery rate % 82% 86% 85%

1414


Gold recovered Koz 265 407 492

Heap Leach

Ore stacked t 000 1,151 1,141 1,341





TOTAL gold production Koz 336 416 504

Gold sales Koz n/a 400 482

Costs Units 9m 2017 FY 2016a FY 2015a

TCC US$/oz n/a 660 749

AISC US$/oz n/a 807 874

Pioneer Albyn

180Koz

142Koz (34%)

Operations OverviewFY2016 Production + TCC/oz by Mine

1515

MalomirPokrovskiy

180Koz (43%)

US$581/oz

38Koz (9%)

US$878/oz

(34%)US$631/oz

57Koz (14%)

US$824/oz

FY16 Production 1H16 TCC Pioneer was acquired as a greenfield license in 2001

Licence area of 1,280km2

Produced approx. 2.4Moz Au to date

5.5Moz JORC Resource, 2.6Moz JORC Reserve (c.60% refractory)

Expected >15 year life of mine

6.7Mtpa RIP plant throughput and heap leach

Operations OverviewPioneer – One of Russia’s Largest Gold Operations

16161616

NE Bakhmut 4&5

Vostochnaya

Nikolaevskaya

PerspektivnayaAndreevskaya East

Operations OverviewPioneer Site Plan

17

N

Yuzhnaya

500m

Existing ore body

Depleted / nearly depleted pits; transition to underground

Current + future production pits

Operations OverviewPioneer Production Summary FY 2015 – 9m 2017

Mining Units 9m 2017 FY 2016 FY 2015


Ore mined t 000 7,096 3,266 6,016


Processing Units 9m 2017 FY 2016 FY 2015

RIP

Total milled t 000 5,091 6,700 6,582



1818




Heap Leach

Ore stacked t 000 708 701 800






Costs Units 9m 2017 FY 2016 FY 2015



Pioneer Production (Koz)

142

Pioneer is one of the Group’s most highly prospective

assets, providing enormous near term optionality from:

Underground non-refractory exploration potential

Regional exploration potential from the Pioneer

flanks

Upside

Operations OverviewPioneer 5 Year Plan

19

789

2016a 2017e 2018e 2019e 2020e 2021e

2016a 2017e 2018e 2019e 2020e 2021e

(1) AISC/oz data is based on internal midrange company estimates. Bar charts not to scale

- Non-refractory

- Refractory

Long term optionality includes:

Bringing forward the Pioneer flotation plant

(6.0Mtpa) development, currently scheduled for

2021

Untapped greenfield exploration potential within

1,280km2 licence

Pioneer AISC (US$/oz)

Brownfield exploration at deeper extensions of the

Andreevskaya, NE Bakhmut and Nikolaevskaya zones

Greenfield: assessment of previously delineated 8km

long gold - arsenic anomaly south of Pioneer;

exploration west from Pioneer, Alexandra and

Zheltunak

2017 est. exploration CAPEX US$8m

Alexandra

N

10km

Pioneer licence

Operations OverviewPioneer Exploration

2020

2017 est. exploration CAPEX US$8m

Pioneer

ZheltunakPokrovskiy

Pokrovskiy licence

Key

Open pit

Processing plant

Areas of proposed green field exploration

Licence outline

2016 geochemical anomalies

Alluvial deposits

FY16 Production 1H16 TCC Albyn was acquired in 2005 as a greenfield license

Licence area of 1,053km2

Produced approx. 0.9Moz Au to date

4.8Moz JORC Resource, c.2.1Moz JORC Reserve(1) (100% non-refractory)


4.7Mtpa RIP plant throughput

Operations OverviewAlbyn – the Company’s Largest Producing Mine

2121 (1) Unaudited internal estimate as at 31 Dec 2016, resources include reserves2121

N

Albyn

Unglichikan

Operations OverviewAlbyn Site Plan

2222

1000m

Elginskoye

Existing ore body


Current + future production pitsKey:

Operations OverviewAlbyn Production Summary FY 2015 – 9m 2017

Mining Units 9m 2017 FY 2016 FY 2015


Ore mined t 000 3,677 4,970 4,906


Processing Units 9m 2017 FY 2016 FY 2015

RIP

Total milled t 000 3,464 4,675 4,600

2323

Total milled t 000 3,464 4,675 4,600






Costs Units 9m 2017 FY 2016 FY 2015



180

Albyn Production (Koz) Upside

Albyn is a largely under-explored 1,053km2 licence

area with strong potential to discover high grade

non-refractory resources

Recent work at Elginskoye has confirmed a material

increase in reserves further supporting the long-term

sustainability of Albyn mine

Operations OverviewAlbyn 5 Year Plan

2424

2016a 2017e 2018e 2019e 2020e 2021e


Albyn AISC (US$/oz)

719

2016a 2017e 2018e 2019e 2020e 2021e

Within the Albyn licence area there are lots of alluvial

deposits, historical underground gold mines and large

geochemical anomalies

Yasnoye(1): 2016 confirmed a 3km mineralised

extension. Five trenches were developed to explore

this structure beyond the historically mined area

Initial assay results from one trench: 12.2m @

Yasnoye

Albyn

UnglichikanN

Operations OverviewAlbyn Exploration

2525

Initial assay results from one trench: 12.2m @

4.72g/t, 6.0m @ 3.09g/t and 6.0m @ 2.37g/t

2017 est. exploration capex budget US$7m

Elginskoye

Afanasevskoye

10km

Key

Active

Areas of proposed green field exploration/surveying

Licence outline

Geochemical anomalies

Proposed

Open Pits:

Stand by

Principal exploration targets

Alluvial deposits

Ulgen

(1) All thicknesses are apparent

Leninskoye

Malomir was acquired as a greenfield asset in 2003

Licence area of 820km2

Produced c.0.6Moz Au to date

7.1Moz JORC Resource, 3.0Moz JORC Reserve (>85% refractory)


3.0Mtpa RIP plant throughput

Operations OverviewMalomir – the Largest Asset by R&R

2626

N500 m

Ozhidaemoye Magnetitovoye

Operations OverviewMalomir Site Plan

27

Quartzitovoye

Existing ore body



Operations OverviewMalomir Production Summary FY 2015 – 9m 2017

Mining Units 9m 2017 FY 2016a FY 2015a


Ore mined t 000 2,191 1,535 2,105


Processing Units 9m 2017 FY 2016a FY 2015a

RIP

Total milled t 000 2,503 3,000 2,937

2828

Total milled t 000 2,503 3,000 2,937






Costs Units 9m 2017 FY 2016 FY 2015a

TCC US$/oz n/a 824 1,092

AISC US$/oz n/a 1,004 1,180

57

Malomir Production (Koz) Upside

Malomir is the largest asset by R&R

The POX Hub will unlock the significant value of its

refractory reserves and potential for additional

discoveries (possible flagship mine)

Expected to be a flagship asset

Refractory production plan budgets for high grade

Operations OverviewMalomir 5 Year Plan

2929

1,004

2016a 2017e 2018e 2019e 2020e 2021e

2016a 2017e 2018e 2019e 2020e 2021e


Malomir AISC (US$/oz)

Refractory production plan budgets for high grade

ore (1.44g/t) to be processed during initial years to

bring cash flows forward

This will be reflected in the last few years of life of

mine, where we schedule to process 0.76g/t average

grade ore

N JORC resource 210Koz @ 8.2g/t

Indicated + 100koz @ 5.3 g/t Inferred(1)

Resource drilling to date only up to 200m below pit shell

Mineralised zones remain open in multiple directions

New drill intercepts marked not included in JORC

Operations OverviewMalomir Underground: Quartzitovoye

3030

[email protected]/t

[email protected]/t

[email protected]/t

included in JORC

Appointed NAO Bashkirskoe SPY underground contractors

Development commenced Q1 17 -decline and ventilation portals complete

2017 est. underground exploration CAPEX estimate US$4m

(1) Group internal estimate as of Q3 2016, in accordance with JORC Code (2012)

Currently mining a small fraction of the orebody from outcropping at surface

Quartzitovoye open pit has produced c.0.35Moz from high grade (>5.1g/t)

No indication ore zone is pinching out

Possibility of a ‘swell’ in the orebody as it intersects the diagonal thrust zone

Quarzitovoye Long Section in combination with Malomir Cross Section

Operations OverviewMalomir Upside

Ver

tica

l str

uct

ure

ho

stin

g Q

uar

tzit

ovo

yeh

igh

gra

de

zon

e

Exploration potential on down

dip extension

3131

Quartzitovoye Malomir

N

Key

Active open pit

Process plant

Exploration targets Tumannoe

Stand by open pit

Operations OverviewMalomir Licence Area

Quartzitovoye

10km

Malomir

MagnetitovoyeOsenie

Razlomnoye

Zapadnoe

Begen

Uspenskoe

Areas of proposed green fieldexploration

3232

FY16 Production 1H16 TCC

Operations OverviewPokrovskiy

3333

Pokrovskiy was the Group’s first asset, acquired in 1994

License area of 95km2

Produced approx. 2Moz Au to date

As Pokrovskiy nears the end of its mine life, the excellent infrastructure, including 1.8Mtpa RIP plant, is being augmented into the POX Hub

3333

West Zheltunak

East Zheltunak

Pokrovskiy Site Plan

Operations OverviewPokrovskiy Asset Overview

3434

Existing ore body



Pokrovskiy FY2016: Mining Unit RIP HL

Total material moved m3 000 4,709 n/a

Ore mined t 000 1,027 n/a

Pokrovskiy FY2016:Processing

Total milled t 000 1,791 440

Average grade g/t 0.7 0.5

Recovery rate % 90.1 64.8

Gold recovered Koz 34 4

Total gold recovered Koz 38

Pressure Oxidation Plant (POX Hub) Refractory Growth Story

3535

Asset Location LaunchDaily

Production(Tonnes)

Grade(g/t Au conc)

#Auto/ claves

S (%) S/Au

ORE

Goldstrike USA 1990 16,000 n/a 6 3 0.3

LihirPapua New Guinea

1997 9,800 5 6 7 1.4

Twin Creeks USA 1997 7,200 n/a 2 4 1.3

Pressure oxidation is an established

technology for treating refractory

ore, employed for decades:

- 1952, first POX plant for base

metals commissioned

- 1985, first POX plant to treat

POX Hub OverviewGlobal Market, Proven Technology

3636

Pueblo ViejoDominican Republic

2012 24,000 3 4 7 2.3

Çöpler Turkey 2018e 5,000 2 - 5 1 (7) 4.2 1 - 2

CONCENTRATE

PorgeraPapua New Guinea

1991 2,100 100 4 9 0.1

MacraesNew Zealand

1999 560 45 1 10 0.2

Kittila Finland 2008 500 30 1 18 0.6

Donlin USA n/c 8,000 13 2 7 0.5

Quimsacocha Ecuador n/c 510 29 1 30 1.0

Amursk Russia 2012 770 45 1 7 0.1

PokrovskiyPOX Hub

Russia 2018e 1,800 25 4 24 0.9

gold refractory ore

commissioned in

McLaughlin, USA

Existing POX operations in

Russia, North America, New

Zealand, Papua New Guinea and

Finland, with many under

construction, including our POX Hub

at Pokrovskiy, Amur Region

(1) n/a = data not available n/c = not commissioned yet

Mayskoye

KyuchusNezhdaninskoye

Russia• Extensive and well understood refractory gold R&R base

• c.80% of R&R are refractory or partly refractory

• Experience in treating refractory ore across multiple metals

• Highly skilled labour and technology

• The POX Hub give Petropavlovsk a competitive advantage and offers new growth opportunities

POX Hub OverviewSignificant Refractory Gold Territory

3737

Pokrovskiy POX Hub

Olimpiada

Veduga

Albazino

Taseevskoye

Itakinskoye Kluchevskoye

Malomir

Bogolubovskoye

PioneerKey: Principal refractory / partly refractory deposits

Petropavlovsk

Other assets

Nasedkino

Khabarovsk

Yakutia

Pokrovskiy POX Hub

Pioneer(40km from

POX hub)

Malomir(670km from

POX hub)

Albyn

Excellent location Well established infrastructure 10km from Trans-Siberian Railway Access to ample hydropower Milling facilities and skilled workforce Viable hub for processing third party ore

POX Hub OverviewStrategically Positioned

3838

CHINA

Zabaykalsk

EAO

Pokrovskiy POX Hub

Pilot POX Plant

Albyn

Operating Mine

Underground

POX

Analytical Labs

Hydro Plant

Lime Deposit

Blagoveschchensk

JORC Refractory Mineral Resources(1)JORC Refractory Ore Reserves(1)

[email protected]/t

3.2Moz @0.96g/t3.2Moz

@0.96g/t

[email protected]/t

[email protected]/t

POX Hub OverviewPOX Unlocks c.50% of our Existing Reserve Base

3939 (1) As at 31 Dec 2015; in accordance with JORC 2012; WAI April 2016;

@0.96g/[email protected]/t

ProbableProven

Total Proven + Probable Refractory Reserves = 4.0Moz @ 1.0g/t

InferredIndicatedMeasured

[email protected]/t

Total Measured, Indicated + Inferred Refractory Resources = 9.3Moz @ 0.8g/t

>15yrs of sustainable refractory production

150 –170ktpa

FRO

M 2

01

8

FRO

M 2

02

3

Flotation Plant Flotation Plant

300 –330ktpa

Malomir concentrate 86% recovery 5.5% concentrate

yield 24 g/t Au

Pioneer concentrate 82% recovery 2.9% concentrate

yield 24 g/t Au

MALOMIR PIONEER

POX Hub OverviewFlowsheet

TOTAL recovery =

c.80%

4040

170ktpa concentrate

330ktpa concentrate

POX HUB

Concentrate Re-grinding

90% -0.044мм

1

Autoclave Oxidation

4x 15mx4m autoclave

225°C @ 35 bar20 - 30 minutes

2

RIP Circuit

Purogold Resin

3

Doré to Refinery

RecoveriesMalomir = 93%Pioneer = 98 %

4

Malomir Flowsheet Pioneer Flowsheet

Floatation concentrate Floatation concentrate

Ore processed 5.4Mtpa (Stage 1: 3.6Mtpa) Ore processed 6.0Mtpa

Ore grade 1.04 g/t Ore grade 0.91 g/t

Flotation recovery 86% Flotation recovery 82%

Concentrate yield 5.5% mass Concentrate yield 2.9% mass

Concentrate grade 24 g/t Au Concentrate grade 24 g/t Au

Pressure oxidation 300 - 330ktpa Pressure oxidation 150 - 170ktpa

POX Hub OverviewOperating Parameters

41

Malomir flotation commissioning from 4Q17; Pioneer flotation commissioning from 2023

Pressure oxidation 300 - 330ktpa Pressure oxidation 150 - 170ktpa

Sulphur 24.90% Sulphur 21%

Gold recovery 93% Gold recovery 98%

TOTAL avg gold recovery 79% TOTAL avg gold recovery 80%

Est. operating costs US$615-$675/oz Est. operating costs US$785-$865/oz

Mining $2.5/m3 rock Mining $2.6/m3 rock

Transport $26/t concentrate Transport $1.7/t concentrate

Flotation $4.6/t treated ore Flotation $4.6/t treated ore

POX $78.2/t concentrate POX $78.1/t concentrate

Blagoveschensk Pilot Plant

- Only autoclave test plant in Russia

- Models complex physicochemical processes to identify the optimal solution for autoclave concentrate recovery

- Testing permutations of the operating parameters (temp, pressure, flow rate, qty of reagents)

- Running simulation of ramp-up scenarios

- Automation and controls exactly as will be implemented at the Pokrovskiy plant

Derisks the commercial scale implementation, allowing for

POX Hub OverviewPilot Plant – Reducing Execution Risk and Optimising Output

4242

Ongoing optimisations of POX technology: oxidation kinetics, concentrate blends, impact of chloride ions

Derisks the commercial scale implementation, allowing for effective, efficient ramp-up.

In 2013 - 2015 pilot plant tests confirmed the feasibility of POX for Malomir and Pioneer concentrates

- Recovery achieved of 92 to 95% for Malomir and 98% for Pioneer

- Research + pilot plant tests allowed significantly improved oxidation time

- This opened up a potential to increase capacity by 30% (compared to original design)

POX Hub OverviewMalomir Flotation Plant – STAGE 1 (3.6Mtpa) 90% Complete

• Malomir was acquired in 2003 as a greenfield license, now the Group’s largest asset by R&R.

• License area of 964km2

• Produced c.0.6Moz Au to date

• 6.8Moz JORC resource, 2.7Moz JORC reserve (>90% refractory)

• Completing POX will unlock an implied LOM of

• 3.0Mtpa RIP plant throughput 4343

Stage 1: 3.6Mtpa – commissioning 4Q17 Stage 2: 3.6Mtpa expansion - commissioning in 2019 TOTAL capacity 5.4Mtpa across three lines Stage 1 & 2 CAPEX est. US$32m

43

Filtration unitOxygen stationAutoclave unit

Container

POX Hub OverviewPOX Hub Construction 65% Complete

44

Container unit, equipment

storage

POX Hub staged commissioning scheduled from 4Q18, with ramp up throughout 2019 Most design, earth works and civil works complete. All critical items on site, including 80% of project

equipment. All key contracts signed, including installation and commissioning work with Outotec The autoclaves (x 4) are installed / lined Total pre-production CAPEX est. US$120m (2017 est. US$65m CAPEX)

Autoclave Building

4545

Autoclave building Autoclaves installed on foundations

Autoclave agitators Flash tanks

INSERT IMAGE

x

Filtration Building

INSERT IMAGE

46

Press filter

Fine filter Reagent preparation / dispenser

Agitator for neutralisation vessel

Malomir Flotation Plant

4747

Internal view of flotation plant

Flotation tail thickeners Flotation machines

Aerial view of flotation plant

Oxygen Plant

4848

Oxygen plant building

Internal view of the oxygen plant Internal view of the oxygen plant

Oxygen plant building

Expansion. The POX Hub is engineered to allow for an additional two autoclaves to be installed, increasing capacity by 30% to 650Ktpa

Potential to take third party concentrates for toll treatment

Different concentrates can be processed in parallel without compromising recovery

Project Economics (2018-2032)(1) Optionality

POX Hub capacity 500Ktpa

Project NPV (10%) US$603m

Project IRR 65%

Project payback 3.25 yrs

Revenue 2018 – 2032 US$3,965m

Avg Gold Production (koz pa) 220Koz

POX Hub OverviewProject Economics

49

8%

36% 39% 41%

100% 92%

64% 61% 59%

0%

20%

40%

60%

80%

100%

2017e 2018e 2019e 2020e 2021e(1) Assuming LT avg gold price US$1,200/oz and FX of USD:RUB of 60

20

17

Malomir Flotation Plant Due Date

Stage 1 construction complete Q4

Stage 1 commissioning Q4

POX Hub Construction

Delivery of equipment + materials (80% on site) Q3

Supporting infrastructure work Q4

Piping + welding Ongoing


POX Hub OverviewPath to Production

5050

20

18


Concentrate production (stockpiling + trucking) H1

POX Hub Construction

Piping + welding complete Q2

Autoclaves complete Q3

Pokrovskiy RIP refurbishment + integration Q3

POX Hub Commissioning

Oxygen plant complete Q2

Plant infrastructure (incl. steam plant, electrical, automation) Q2

Autoclaves: staged commissioning Q4

FIRST PRODUCTION Year End

Financial Overview

5151

624.5504.1

416.3298.1 336.4

2014 2015 2016 9M 2016 9M 2017 2017E

Gold Production

Koz

420 - 460

Gold Production and RevenuesGrowth resumed in 2017

(1)(1)

+13%

Up to 10.5%

Disposal of alluvial operations and focus on profitable ounces

Focus on profitable ounces and the impact

of extreme weather conditions on the mining schedule

2014 2015 2016 9M 2016 9M 2017 2017E

5252

Revenue

(1) From the beginning of 2017, the Company moved to using gold poured as the definition for production. Comparable 9M 2016 gold production numbers are adjusted accordinglyNote: Figures may not add up due to rounding

(1)(1)

821.7567.6 488.5

233.4 290.8

865.0

599.9 540.7

254.0 304.0

1,331

1,1781,222 1,194

1,255

2014 2015 2016 H1 2016 H1 2017

Gold sales Other revenues Average realised gold sales price (US$/oz)

US$m

+20%

Operating Cash Expenses(1) Structure

Materials33%

Staff costsFuel14%

Other 9%

Electricity10%

Other external services

11%

401.0 329.2 266.0123.4 150.6

505.7360.7

263.7129.7 156.4

860749

660 663 675

2014 2015 2016 H1 2016 H1 2017

Operating cash expenses Other cash costs

Total Cash Costs

US$m

Operating Costs and EBITDAIncreasing profitability on the back of lower production costs

US$ 150.6m

+2%

(1)

(2)

53

Staff costs23%

14%Operating cash expenses Other cash costsTCC (US$/oz)

EBITDA and EBITDA Margin

251.8172.8 200.1

88.0 114.1

29.1% 28.8%

37.0%34.6%

37.5%

2014 2015 2016 H1 2016 H1 2017Underlying EBITDA Underlying EBITDA margin

(1) Operating cash expenses are defined as operating cash costs less refinery and transportation, other taxes, mining tax and deferred stripping. Presented before movement in stockpiles, work in progress and bullion in process attributable to gold production (2) Other cash costs were negative in 2016 due to movement in stockpiles, work in progress and bullion in process attributable to gold production (3) is defined as profit/(loss) for the period from continuing operations before investment income, interest expense, other finance gains, other finance losses, foreign exchange gains and losses, taxation, depreciation, impairments, reversals of impairment write-downs to adjust the carrying value of net assets of disposal groups held for sale to fair value less costs to sell and the Group’s share of interest expense, investment income, other finance gains, other finance losses, foreign exchange gains and losses, taxation, depreciation and impairments recognised by an associate Note: Figures may not add up due to rounding

US$m

+30%

(1)

(3)

Capital Expenditures

10096.8

168.8

111.0

US$m

Cash FlowsInvestments are funded via internally generated cash flows

5454

24.3(2)

12.7 10.9 14.1

100

34.1

18.9 16.6 10.9

38.4

1.01.9

16.8

96.8

32.629.4

41.837.0

74.6

2014 2015 2016 H1 2017 FY2017E

Sustaining capex Exploration Development Net cash from operating activities

Construction of POX Hub

resumed

(1) (1)

(1) From continuing operations (2) Including c.US$23.2m for hard rock mines and c.US$1m for alluvial operationsNote: Figures may not add up due to rounding

Construction of POX Hub suspended

(1)

(2)

Net Debt and Leverage

977.8638.3 611.2 602.8

929.7610.0 598.6 570.1

3.7x 3.5x

3.0x2.5x(1)

Leverage and Debt StructureContinued focus on deleveraging

US$m -1.2x

5555

Debt Structure (30 June 2017)

YE2014 YE2015 YE2016 30 June 2017

Total debt Net debt Net debt / Underlying EBITDA

Convertible bond- Carrying value per IFRS: US$89.9m- Principal amount: US$100.0m- Maturity: March 2020- Exchange price: £0.0826 (actual price

£0.0800 as at 30 Sept 2017)

Bank loans- Carrying value per IFRS: US$512.9m- Principal amount: US$518.2m- Maturity: final maturity in September

2022 (with amortisation) - Lenders: Sberbank and VTB

Bank loansUS$512.9m

Conv. bond US$89.9m US$

602.8m

(1) Underlying EBITDA for the year ended 30 June 2017, which is used for calculation of the ratio, is US$226.2m

Key Strengths

Exploitable and long life mineral resource base with expansion potential

Strong track record of mine development, expansion and asset optimisation

New growth opportunities – POX hub and underground mining

1

2

3New growth opportunities – POX hub and underground mining

Highly efficient mining and processing operations

Experienced management team and skilled workforce

Strategic location and access to developed infrastructure

4

5

6

56

Appendix

5757

Total Group Reserves and Resources

Total Ore Reserves for Open Pit and Underground Extraction(1)

Category Tonnage (kt) Grade (g/t Au) Gold (Moz)

Total Reserves

Proven 32,032 0.82 0.84

Probable 229,667 0.96 7.11

Proven+Probable 261,699 0.95 7.95

Non-Refractory Reserves

Proven 22,177 0.69 0.49

Probable 95,632 1.10 3.39


Refractory Reserves

Proven 9,854 1.11 0.35

Probable 134,036 0.86 3.72


5858

(1) Notes:- In accordance with JORC Code as at 31 Dec 2016, Resources (M,I&I) are inclusive of Reserves- Figures may not add up due to rounding- Figures include the non-core Tokur project, which contains a total of c.1.4Moz of non-refractory Resources of which c.0.2Moz are Reserves

Total Mineral Resource for Potential Open Pit and Underground Extraction(1)

Category Tonnage (kt) Grade (g/t Au) Gold (Moz)

Total Resources

Measured 51,859 0.94 1.57Indicated 418,167 0.89 11.96Measured + Indicated 470,026 0.90 13.53Inferred 257,409 0.80 6.63

Non-Refractory Resources


Refractory Resources


9M 2017 Group Production Summary

Units Pioneer Albyn Malomir Pokrovskiy

Total material moved m3 000 11,638 22,719 7,451 2,972

Ore mined t 000 7,096 3,677 2,191 996

Average grade g/t 0.75 1.13 0.83 0.51

Gold content Koz 171.1 133.5 58.3 16.3

Resin in pulp (RIP) plant

Total milled t 000 5,091 3,464 2,503 1,352

Average grade g/t 0.72 1.15 0.82 0.46

5959

Average grade g/t 0.72 1.15 0.82 0.46

Gold content Koz 118.4 127.6 65.8 19.8

Recovery rate % 76.1 93.1 61.3 81.9

Gold recovered Koz 90.1 118.8 40.3 16.2

Heap leach operations

Total stacked t 000 708 443

Average grade g/t 0.49 0.39

Gold content Koz 11.1 5.6

Recovery rate % 43.8 35.6

Gold recovered Koz 4.8 2.0

Gold production – Dore(1) Koz 131.8 138.0 43.8 22.8

(1) From the beginning of 2017, the Company moved to using gold poured as the definition for production

HSE and Social Responsibility

Safety

GHG Emissions

One of the key indicators the Group uses to identify safety trends is Lost Time Injury Frequency Rate (LTIFR)(1); an integral part of complex management systems

The measure ensures compliance with Russian legislation and provides the Group with a basis for ongoing improvement

The Group is aiming for a low LTIFR and zero fatalities by seeking to implement new, or improve on existing, OH&S systems

Monitoring greenhouse gas (GHG) emissions enables the Group

2.50 2.63 2.64

2014 2015 2016LTIFR

Emissions 2016 2015 2016 vs.

(1)

60(1) LTIFR is the number of accidents (incl. fatalities) taking place on Group premises (excludes IRC, which has a separate HSE management system) measured against the number of man hours worked during that period (per million man hours worked)

Monitoring greenhouse gas (GHG) emissions enables the Group to look for opportunities to minimize its carbon footprint

Emissions come from the following sources: diesel; kerosene; benzene; coal

The Group continues to monitor GHG emissions and reviews all relevant data in order to identify opportunities for improvement

Emissions 2016 2015 2016 vs. 2015

Operation of facilities (tonnes of CO2e) 182,408 260,195 -30%

Own use(tonnes of CO2e) 222,847 276,144 -19%

Total emissions per oz. of gold produced

0.97 1.07 -9%

Social Responsibility

Petropavlovsk takes a responsible approach to operations in areas inhabited by the Evenki people (an indigenous community) of the Amur region, actively seeking their support for operations, continually assessing potential risks and contributing to community development

The Company recognises the socioeconomic influence it has as a major employer and taxpayer in the Amur region. The Group provides equal opportunities and pays in all aspects of employment, regardless of gender or background, as required by both Russian and UK legislation

A producer and developer of industrial

commodities, principally iron ore. Based in the

Russian Far East, IRC benefits from low production

costs and proximity to the Chinese border

Listed on the Hong Kong Stock Exchange (1029 HK)

since 2010

Petropavlovsk is a 31.1% shareholder:

‒ IRC is accounted as an associate under the equity

accounting method

‒ Worth US$70m as at 30 September 2017(1)

ICBC project finance facility to fund construction

of K&S mine, 100% guaranteed by POG

IRC at a Glance POG Equity Interest and Contingent Liability

IRC LimitedPetropavlovsk has a 31.1% equity interest

IRC’s key mining assets are K&S, Kuranakh and

Garinskoye:

‒ K&S: A producing iron ore mine which is located in

the Jewish Autonomous Region (EAO) of the

Russian Far East. The plant is currently operating at

a steady capacity of around 80%

‒ Kuranakh: the BoD has authorised a strategic

assessment of the option to restart the operation

‒ Garinskoye: the project is at an advanced stage of

exploration

‒ The only debt within IRC

‒ c.US$234m outstanding principal, as at

30 September 2017

‒ 2017 repayment holiday

‒ Guarantee fee of 1.75% p/a on outstanding facility

amount payable to Petropavlovsk by IRC

As part of the balance sheet optimization, the Group

is constantly assessing the best way to realise the

value of its interest in IRC

61 (1) IRC market capitalisation as at close 30 September 2017 (US$225m, source: Bloomberg) x Petropavlovsk’s equity interest (31.1%) = US$70m

Investor Relationse: [email protected]: +44 (0) 207 201 8900

Documents

PETROPAVLOVSK PLC€¦ · Some statements contained in this presentation or in documents referred to in it are or may be forward-looking statements, ... Nevsun Resources and ... Corporate