OREANDA-NEWS. May 16, 2014. Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries – “Polymetal”, the “Company”, or the “Group”) is pleased to announce the successful completion of Reserves and Resources Audit (“Audit”) performed by Snowden Mining Industry Consultants (“Snowden”) for the Svetloye gold deposit.

HIGHLIGHTS

Total Ore Reserves in accordance with the 2012 JORC Code are estimated at 7.3 Mt at the average grade of 2.8 g/t Au with 0.7 Moz of gold contained.

Total Mineral Resources (additional to Ore Reserves) are estimated at 1.1 Mt of ore at the average grade of 2.3 g/t Au containing 0.1 Moz of gold. Further substantial exploration potential exists within the existing license area of 40 km2.

The pre-feasibility study envisions 1.0 Mtpa open pit heap leach operation with initial mine life of 8 years. Svetloye expects to produce an annual average of 70 Koz of gold at an average All-in Sustaining Cost (AISC) of USD 750-800/oz of gold.

Pre-production capital expenditures are estimated at USD 90 million and do not take into account potential synergies with Khakanja (mining equipment) and Omolon (equipment from postponed Sopka heap leach project).

Project IRR of 44% was estimated at gold price of USD 1,250/oz, Brent oil price of USD 110/bbl, and RUB/USD exchange rate of 33. Project IRR for the stress scenario at gold price of US\\$ 1,000/oz (in accordance with the Company policy to stress the project at a 20% discount to spot price) was estimated for 23%.

The project is expected to be reviewed by the Company’s Board of Directors in Q3 2014. In case the development decision is positive, construction will commence in 2015 with first production in Q3 2017.

“Svetloye can give Polymetal capital-light, low-risk and low-cost production and cash flows in the medium-term,” said Vitaly Nesis, CEO of Polymetal. “More value is likely to be generated by leveraging synergies with Khakanja and expanding the reserve base of the project”.

ASSET OVERVIEW AND HISTORY

Svetloye is located in the Okhotsk district of the Khabarovsk Krai in the Far East of Russia. The project lies in unpopulated remote mountainous area with taiga forest in the valleys and tundra covering hilltops.

Svetloye is located 240km south-west of Okhotsk, the access port for the Company’s Khakanja mine and approximately the same distance from Khakanja itself. It is accessible by a 380 km winter road from Okhotsk and by 92 km winter road from Unchi seaport which will be used for delivery of fuel and supplies during the summer navigation period. Between May and November access to the site is by helicopter.

The deposit was discovered in 1973. Significant exploration was undertaken between 2003 and 2005 with a total of 38 trenches excavated and 28 diamond drillholes drilled. Between 2006 and 2009 further 62 trenches were excavated and 273 diamond drillholes drilled. Total drilling amounted to 42,730 m and total trenching comprised 124,994 m3.

Polymetal acquired Svetloye exploration and mining license in December 2010 for the total consideration of USD 9.25 million. In 2013 Polymetal drilled 17 diamond drillholes totaling 2,956 m and 33 reverse circulation (RC) drillholes totaling 6,474 m.

GEOLOGY AND MINING

Gold mineralisation at Svetloye is formed by vuggy silica (secondary quartzite) associated with a high-sulphidation epithermal system. Most of gold mineralisation is very fine grained and disseminated. Gold-bearing silicification occurs as flat lenses or pods, which outcrop at the surface and have true widths of between 20 and 120 m. Higher-grade zones are adjacent to breccias. The oxidation zone develops to a depth of 150 m.

Three ore zones (Emmy, Elena and Tamara) are proposed to be mined at Svetloye. Open pit mining will be conducted by conventional drill-and-blast and truck haulage. The average strip ratio over the life of the mine is 1.4 t/t. The open pits will reach the maximum depth of 130 meters.

METALLURGY AND PROCESSING

Svetloye ore will be processed by heap leaching with the pads and the plant located within 5 km from the main pits. Ore will be crushed only in warm season to minus 20 mm, mixed with crushed limestone, and stacked by trucks in lifts with the height of 15 meters.

Solution from the heap leach pad will be processed through the 400 m3/h capacity Merrill-Crowe plant. The precipitate will be dried and packed at the existing Khakanja plant and sent for further processing to the third-party refinery. The leach solution will be heated to +12 C by coal-fired 6MW boiler. Electricity will be provided by the Company-owned diesel generators with installed capacity of 5MW.

Metallurgical testing (carried out by CJSC Polymetal Engineering) showed average recoveries of approximately 82% for gold, of which 65% is expected to be recovered in the first year from stacking.

PROJECT DEVELOPMENT TIMELINE

Below is an estimated Svetloye gold mine project development timeline:

Complete project design and permitting – Q1 2015;

Start construction – Q3 2015;

First production – Q3 2017;

Full year of production at nameplate capacity – 2018.

The project will be managed by Khakanja team. Polymetal will provide regular updates on the progress of the development of the Svetloye gold project.