Pole of PJSC

PJSC Polyus is the largest gold producer in Russia and, as of April 2019, one of the 10 leading global gold mining companies.

Performance indicators

2023: Revenue growth 14% to $5.44 billion

At the end of 2023, Polyus raised $5.44 billion against $4.26 billion a year earlier. The growth was due to an increase in gold production, as well as an increase in the average sale price of refined gold. The Russian gold miner published such data at the end of February 2024.

From the reporting of Polyus, it also follows that in 2023 the volume of gold sales reached 2.9 million ounces, which exceeds the figure of 2.4 million ounces a year ago. This rise in the group was explained by an increase in production at the Olympics and Blagodatny.

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At the end of 2023, Polyus paid an excess profit tax of 2.66 billion rubles. The Group took the opportunity to reduce the rate to 5% through a security payment. Capital) decreased from $1.12 billion in 2022 to $1.04 billion a year later.

The total cash expenses of the group for 2023 decreased to $389 per ounce, which, as noted by the press service of Polyus, reflects the weakening of the ruble, an increase in the content of gold in processing at the enterprises of the Krasnoyarsk business unit, as well as a greater effect from the sale of a related product in antimony floatation ($35 per ounce in 2023 against $2 in 2022). The negative factors in the company also included an increase in the cost of consumables, indexation of wages, an increase in electricity tariffs, as well as an expected decrease in the content of gold in processed ore at Natalka and Verninsky.

Mining by the Polyus Group in 2023 compared to 2022 increased from 62,333,000 to 81,757,000 tons, which is due to an increase in the volume of ore mined at the Olympics, Blagodatny and Verninsky. Ore processing reached 48,894,000, which is roughly the same as a year ago. Gold production rose 14% to 2.9 million ounces.^[1]

2022: Revenue decline 14% to $4.23 billion

Polyus revenue for 2022 decreased by 14% compared to 2021 and amounted to $4.23 billion. The gold mining company published such data on March 15, 2023.

Polyus's profit in 2022 reached $1.56 billion, down 32% from a year ago. As stated in the press release, the company's revenue fell due to a decrease in production volumes, as well as due to a decrease in the annual comparison of the average sale price of refined gold.

Polyus revenue for 2022 decreased by 14%

The Company does not disclose average sales prices in 2022. According to Interfax, they could decrease by about 4%, to $1,722 per ounce.

The total volume of gold sales in 2022 amounted to 2,423 thousand ounces, having decreased by 11% compared to the previous year. This is primarily due to a decrease in production at the Olympics, Blagodatny and Natalka.

Total cash costs (TCC) for 2022 increased by 28% compared to 2021 and reached $519 per ounce. This reflects a decrease in the average gold content in processing in almost all ore deposits. Inflation of the cost of consumables, indexation of wages and the strengthening of the ruble also negatively affected the dynamics of the company's costs in 2022. Capital expenditures of Polyus increased from $928 million in 2021 to $1.12 billion in 2022. The increase in capex is associated with their increase in all business units of the group.

The total debt of Polyus in 2022 grew slightly and amounted to $3.586 billion at the end of the year. Net debt (including derivatives) increased by 3%, to $2.269 billion. The ratio of net debt to EBITDA rose for the year from 0.6x to 0.9x.

It also follows from the Polyus report that the company has significantly expanded the range of consumers. The largest buyer, as follows from the company's materials, remains Otkritie Bank, but its share in gold sales decreased from 48% in 2021 to 15% in 2022. The total number of buyers by the end of 2022 exceeded 10, with the 5 largest accounting for half of sales.^[2]

2020

Digital to Pole

• Information Technology in Polyus

History

2024

TAdviser interview with Denis Erofeev, Director of Business Process Development Department

Today, manufacturing enterprises are striving to become as digital as possible, using the information they have to improve productivity and operational efficiency. TAdviser spoke with Denis Erofeev, Director of Polyus Business Process Development, about working with data in the context of mining processes. Read more here.

Alrosa bought the Degdekanskoye field from Polyus for $100 million

The diamond mining company ALROSA acquired the Degdekan gold deposit from Polyus for an amount estimated by experts at $100 million. The transaction, which became known on July 1, 2024, was made through the subsidiary "ALROSA" - "Diamonds Anabar."

According to Vedomosti, the deal to sell the Magadan Geological Exploration Enterprise, which owns a license for the Degdekan field, was closed on June 21, 2024. The official amount of the transaction was not disclosed, however, according to Dmitry Smolin, senior analyst at Sinar investment bank, it can range from 3 to 5 billion rubles.

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The Degdekanskoye deposit, located in the Tenkinsky urban district of the Magadan region, has proven reserves of 100 tons of gold, of which 38 tons belong to the balance reserves of categories S1 and S2. The gold content of the ore is 2.2 g/t.

ALROSA plans to begin development of the field after updating the feasibility study, with commissioning in 2028. The company estimates the initial investment in the project at 24 billion rubles. It is expected that after reaching the design capacity in 2030, the volume of gold production will be 3.3 tons per year.

ALROSA CEO Pavel Marinychev noted that the company's experience in associated gold mining will provide an additional synergistic effect and increase the financial stability of the business.

Experts associate the acquisition of the gold ore deposit with ALROSA's business diversification strategy amid Western sanctions and expectations of a long-term weakening of demand for diamonds in the global market.

For Polyus, the sale of the Degdekan field is part of the optimization of exploration assets in preparation for the development of the Sukhoi Log field, the largest undeveloped gold deposit in Russia with reserves of more than 1240 tons^[3]

Sale of ZDK "Lenzoloto" to a group of investors from Russia

In mid-April 2024, the gold mining company Polyus announced the sale of Lenzoloto to a group of investors from Russia whose names were not disclosed. The value of the deal has also not been announced. Read more here.

2023: Leaving the London Exchange

On June 22, 2023, Polyus announced its departure from the London Exchange. Russia's largest gold miner described the move as expected "given current circumstances," including sanctions.

Maintaining Rule 144A depositary receipt programs (ISIN: US73181M1099), Regulation S (ISIN: US73181M1172) and Tier 1 American Depositary Receipt Program (ISIN: US73181P1021) ("Depositary Receipts" and "Programs," respectively) is no longer appropriate for the company. The board of directors also approved the commission of all necessary actions to complete the programs and delisting depositary receipts on the London Stock Exchange, the press service of the Russian gold miner said.

Polyus announced its departure from the London Exchange

The company notified the program depository, The Bank of New York Mellon (BNYM), of the completion of the programs. Polyus expects the US bank to send notice to holders of depositary receipts of the completion of the programs, indicating the completion date in accordance with the terms of the depositary agreements. Polyus recommends that receipt holders directly contact the depository bank "to discuss with BNYM possible options for exercising their rights in connection with the completion of the programs."

After the announcement of the departure from the London Stock Exchange, Polyus shares began to fall in price. Their cost at the Moscow Exchange at 13:48 Moscow time on June 22, 2023 decreased by 0.77% compared to the previous day, to 11,185 rubles.

On May 19, 2023, sanctions against Polyus were imposed by Great Britain and Australia, then the US Treasury included the company, all its subsidiaries, as well as CEO Alexei Vostokov in the sanctions list. It is noted that it was the sanctions that caused the decision of the Polyus board of directors on delisting from the London Stock Exchange.^[4]

2022

Separate IT-Business into a separate structure

Polyus, a gold producer in Russia, on October 12, 2022, informed TAdviser about the separation of the IT-Business into a separate structure. The created company "Pole Digital" will give ability to reduce the dependence of critical IT systems on third-party organizations, which is especially important within the framework of the import substitution strategy. Read more here.

Purchase of a gold ore deposit in the Khabarovsk Territory for $140 million

In June 2022, the sale of the Chulbatkan gold deposit to Polyus was announced. The seller in this transaction worth $140 million was Highland Gold. Read more here.

Blagodatnoye Strike

The strike took place on May 28, 2022 at the Blagodatnoye field of the Polyus gold mining company. Employees of the contracting organization went on a march demanding to pay them a salary that has not been paid since March.

Polyus said that the contractor, ESTA Construction, had wage arrears. Polyus itself fulfilled all obligations to the contractor on time. And the contractor promised to pay off all debts in the coming days. The company continues production as usual.

Said Kerimov donated all the shares of Polyus remaining in his possession to the Fund for the Support of Islamic Organizations

On May 13, 2022, it became known that Said Kerimov donated all the shares of the Polyus gold mining company remaining in his possession to the Fund for the Support of Islamic Organizations. As a result, the Fund became the largest shareholder of the Russian gold miner, receiving a 46.35% stake in the company. Earlier, in early April, Kerimov Jr. sold 29.99% of Polyus to Donugol shareholder Akhmet Palankoev. Thus, the Kerimov family ceased to have any economic or legal relation to Polyus.

The head of the Mufti Foundation, Ravil Gainutdin, said that this non-profit organization fully trusts the development of the company to the current management team and does not plan to participate in the day-to-day management of the business.

2020

Alexey Vostokov replaces Pavel Grachev at the head of the company

In April 2022, Pavel Grachev, who headed the largest Russian gold miner Polyus, decided to focus on his own projects.

As general director of Polyus, Grachev was replaced by Alexei Vostokov, who had previously coordinated corporate issues in the company.

Polyus is the largest gold reserves company in the world (104 million ounces)

Polyus became the largest in terms of gold reserves in the world (Gold Mining) at the end of 2020. The Russian company itself announced this at the end of April 2021.

According to Polyus, the company's proven and probable gold reserves by December 31, 2020 amounted to 104 million ounces, an increase of 71% compared to a year ago, equal to 61 million ounces.

The updated estimate takes into account the reserves of the Sukhoi Log, as well as the increase in a number of existing fields against the background of the comprehensive drilling program launched in 2018, the company explained.

The Sukhoi Log reserves, which is considered a key Polyus development project, were directly estimated at 40 million ounces (38% of the total).

The Russian company Polyus has become the largest in terms of gold reserves in the world

Now the status of the Polyus raw material base as the largest in the world has been confirmed. About 97% of it falls on our existing assets and the Sukhoi Log greenfield project, - said the general director of the company Pavel Grachev, whose words are quoted by her press service.

He added that Polyus will continue to implement exploration programs aimed at expanding the company's resource base.

The largest share of reserves fell on the Polyus Krasnoyarsk division, namely the Olympiad and Blagodatnoye fields - 23 million and 12 million ounces, respectively (by the end of 2020). Among the largest is the Natalkinskoye field with reserves of 14 million ounces. The average gold content in the company's reserves is 1.9 grams per ton, which is 0.1 grams more than at the end of 2019.

In 2020, the company produced about 2.8 million ounces of gold. The average gold content in the company's reserves by the end of 2020 was 1.9 g/t against 1.8 g/t a year earlier. About 1.5 billion tons of ore, which accounts for 97 million ounces of 104 million ounces of total reserves at 2.0 g/t, as expected in the company, will be mined by the traditional quarry method using dump trucks and excavators or underground.^[5]

Consolidation Plan 100% at SL Gold

In September 2020, it became known that Polyus intends to accelerate the consolidation of 100% of the shares of the joint venture SL Gold, having bought the remaining 22% of the shares from Rostec for $128.2 million.

Polyus Krasnoyarsk JSC (a 100% subsidiary of Polyus) agreed with Rostec to amend the options concluded in July 2017 so that Polyus could acquire an 11.3% stake in SL Gold at the initially agreed estimate of $65.7 million for cash remuneration instead of Polyus shares.

The parties also agreed to accelerate the exercise of all outstanding options, as a result of which Polyus will buy out Rostec's entire stake in the joint venture in the amount of 22% in cash in the amount of $128.2 million.

After the exercise of all remaining options, Polyus will consolidate a 100% stake in the joint venture. Currently, its share is 78%.

2019

As of April 2019, Polyus has the second largest gold reserves in the world (proven and probable reserves according to the international classification are 68 million ounces) - the foundation of sustainable production growth.

The main enterprises of the company are located in the Krasnoyarsk Territory, Irkutsk and Magadan regions, as well as in the Republic of Sakha (Yakutia) and include 5 operating mines, gold-bearing placers and a number of projects under construction and development.

2013: Onexim sells his package

In February 2013, it became known that the Onexim group of Mikhail Prokhorov sold 37.78 percent of the shares of the gold mining company Polyus Gold International Limited to the structures of the deputy Zelimkhan Mutsoev and the former co-owner of Wimm-Bill-Dann Gabriel Yushvaev.

18.5 percent of Polyus Gold's share capital was sold to Mutsoev-affiliated Lizarazu Limited for $1.7 billion. The group sold another 19.28 percent of the shares in the gold mining company to Yushvaev-affiliated Receipt Limited for $1.846 billion^[6]. It is assumed that Prokhorov received $3.6 billion for the asset.

Suleyman Kerimov, who already owns 40.2 percent of the shares of the gold mining company, was considered the main contender for Prokhorov's stake in Polyus Gold. Russian business media at the end of January wrote that Mutsoev and Yushvaev would be the buyers of the share.

According to unconfirmed information, the latter attracted Kerimov to the deal so as not to put the offer to minority shareholders. The law obliges to declare an offer if control over the company passes to one entrepreneur or consortium of shareholders.

At the end of January 2013, the British merger and acquisition regulator Takeover Panel decided to verify the sale of Prokhorov's stake in Polyus Gold to Mutsoev and Yushvaev. The agency intends to find out whether the deputy and businessman are partners, as well as whether they are connected with Kerimov.

2012

In 2012, 1.68 million ounces of gold were produced - 12% higher than in 2011.

2010

Polyus Gold International Asset Portfolio

OJSC Polyus Gold is an international company - a leading gold producer in Russia and Kazakhstan, which is one of the largest gold mining companies in the world in terms of mineral reserves and production volumes.

The international portfolio of Polyus Gold's assets includes ore and placer gold deposits in the Krasnoyarsk Territory, Irkutsk, Magadan and Amur Regions, the Republic of Sakha (Yakutia), the Republic of Kazakhstan, Romania and Kyrgyzstan, where the company conducts exploration and production of precious metal.

Prokhorov - CEO

As of February 2010, Mr. Prokhorov's structures own about 40% of the company's shares^[7].

On December 9, 2010, Mikhail Prokhorov, who had previously served as chairman of the board of directors, was appointed the new general director of Polyus Gold. Ekaterina Salnikova, deputy financial director of the Onexim group, has been elected the new head of the board of directors.

The former general director of Polyus Gold, Yevgeny Ivanov, whose powers have been terminated, as chairman of the board of directors and general director of the KazakhGold Group, will be engaged in the implementation of priority international projects of the Polyus group.

Aktivs

The international asset portfolio of Polyus Gold includes ore and placer gold deposits in the Krasnoyarsk Territory, Irkutsk, Magadan and Amur Regions, the Republic of Sakha (Yakutia), the Republic of Kazakhstan, Romania and Kyrgyzstan, on which the company conducts exploration and production of precious metal.

As of January 1, 2010, the mineral resource base of Polyus Gold OJSC includes balance reserves of category B + C1 + C2 in the amount of 109.4 million ounces of gold.

Proved and Probable reserves of OJSC Polyus Gold according to the JORC international classification as of January 1, 2010 amount to 74.1 million ounces, according to the Independent Expert Report prepared by Micon International.

OJSC Polyus Gold shares are traded on the leading stock exchanges of Russia - RTS and MICEX. American depositary receipts (ADRs) of the company are traded on the main floor of the London Stock Exchange (UK), as well as on the over-the-counter market in the United States.

2009

In 2009, Russian enterprises that are part of Polyus Gold produced 39.2 tons or 1.261 million ounces of gold.

2008: Change of shareholders: Prokhorov - 26%, Potanin sold 37% to Kerimov

The division of assets "Pole of Gold" between Potanin and Prokhorov occurred as follows: Prokhorov retained 26.8% of the company's shares, and Potanin sold his 37% stake in the company to the structures of businessman Suleyman Kerimov.

In September 2008, Polyus Gold OJSC announced negotiations with KazakhGold Group Limited (mining gold in Kazakhstan) in connection with a possible partial offer of a Kazakh company to acquire 50.1% of KazakhGold Group Limited shares issued and subject to issue. In the spring of 2010, the Government Commission on Foreign Investment of the Russian Federation approved a reverse takeover, during which, as expected, KazakhGold, registered on the island of Jersey, was supposed to acquire the assets of Polyus Gold and become the parent company of the group. It was assumed that the Polyus Gold International formed as a result will be listed on the London Stock Exchange, 73.6% of its shares will be received by Mikhail Prokhorov and Suleyman Kerimov. The transaction was first planned to be completed in August 2010, but later difficulties arose with the implementation of the transaction with the owners of the controlling stake in KazakhGold - the Asaubaev family, as a result of which its completion was postponed first for a month, and then for a longer period. As a result, it was announced that the deal was canceled.

2005-2006: Building a Company

OJSC Polyus Gold was formed by reorganization in the form of the allocation of gold mining assets of OJSC MMC Norilsk Nickel (CJSC Polyus and subsidiaries) into an independent public company according to the decision of the General Meeting of Shareholders of OJSC MMC Norilsk Nickel dated September 30, 2005.

The official date of creation of Polyus Gold OJSC is March 17, 2006 - the date of state registration of the company. OJSC Polyus Gold is registered in the Krasnoyarsk Territory.

OJSC Polyus Gold owns a 100% stake in Closed Joint Stock Company Polyus Gold Mining Company (Polyus CJSC), which owns stakes in subsidiaries, including: OJSC Lenzoloto (64.1%), LLC Lenskaya Gold Ore Company (100%), OJSC Matrosov Rudnik (100%), OJSC Aldanzoloto GRK (100%) Yakutsk Mining Company, YAN 100% Since August 2009, Polyus Gold OJSC has a 50.1% stake in Kazakh Kazakh Gold Group Limited.

Notes