20.08.2015

For immediate release

Polyus Gold International Limited (LSE and MICEX-RTS - PGIL) ("PGIL", "Polyus Gold" or "the Group"), the largest gold producer in Russia, today releases its consolidated financial results for the first half of 2015.

Financial highlights:

• Gold sales increased by 6% y-o-y to 799 koz mainly driven by operational improvements at Titimukhta and Verninskoye.
• Revenue up 1% y-o-y to $1,019 million as a result of higher sales volumes, partly offset by a lower average realized gold price.
• Adjusted EBITDA1 up 50% to $589 million y-o-y driven by the Rouble depreciation, higher sales volumes and cost optimisations.
• Headline net profit for the period up by 130% to $583 million due to stronger operating earnings and revaluation gains on derivative financial instruments.
• Adjusted net profit2 reached $432 million an 89% increase y-o-y.
• Cash and cash equivalents and bank deposits at the end of the period amounted to $1,377 million, a 7% decrease compared to the end of FY 2014 reflecting dividend payments in 2Q 2015.
• Net cash inflow from operations3 of $515 million, up 42% y-o-y as a result of higher operating profit and ongoing strict working capital control.
• Capital expenditure (Capex)4 of $96 million, down 67% y-o-y owing to continued tight capital control, lower spending on Natalka and a weaker Rouble.
• A final dividend for FY 2014 of $184 million announced and paid in 2Q 2015.
• Net debt5 of $375 million, a 15% increase compared to the end of FY 2014 reflecting the dividend payment in 2Q 2015.
• Net debt5/adjusted EBITDA1 ratio remained flat at 0.31x at the end of the period (0.32x at the end of FY 2014).
• Total cash cost (TCC)6 decreased 34% y-o-y to $436/oz due to the Rouble depreciation and the rollout of cost reduction initiatives and All-in sustaining cash cost (AISC)7 reduced 32% y-o-y to $617/oz reflecting in addition lower maintenance capex.

Operational highlights:

• 1H 2015 refined gold production amounted to 783 koz, a 5% increase y-o-y mainly due to improvements at Titimukhta and Verninskoye.
• Verninskoye sustainably reached the design recovery level of 86%.
• The Group continues the technical evaluation of the Natalka project with a view to optimise its configuration and minimise the remaining capital and operating costs. Several options on the processing side are being carefully considered with the engagement of world class third party consultants to develop the most efficient base case scenario for the production start up. In the meantime the construction of certain critical pieces of onsite infrastructure is ongoing. The Group intends to provide an update to the market in autumn 2015.

1 "Adjusted EBITDA" is defined by the Group as profit before finance costs, income tax, income/(losses) from investments (including derivative financial instruments), depreciation, amortisation and interest paid, and is further adjusted for certain items. The Group has made these adjustments in calculating Adjusted EBITDA to provide a clearer view of the performance of its underlying business operations and to generate a metric that it believes will give greater comparability over time with peers in its industry. The Group believes that Adjusted EBITDA is a meaningful indicator of its profitability and performance. This measure should not be considered as an alternative to profit for the period and operating cash flows based on IFRS and should not necessarily be construed as a comprehensive indicator of the Group's measure of profitability or liquidity.
2"Adjusted Net Profit" is defined by the Group as a net profit adjusted for reversal of impairment/impairment losses, impact from derivative financial instruments, foreign exchange gain/loss and associated income tax related to one-off items
3Interest paid for the period has been reclassified in the cash flow from operating activities into financing activities. Amounts for the comparative period were also restated.
4Capital expenditure figures are presented on an accrual basis.
5"Net debt" is defined as short- and long-term debt, less cash and cash equivalents and short-term bank deposits. Short-term bank deposits with an original maturity of more than three months can be withdrawn on demand and therefore have the same liquidity as cash and cash equivalents. Net debt excludes derivative financial instrument assets/liabilities, site restoration and environmental obligations, deferred tax and other non-current liabilities. Net debt should not be considered as an alternative to current and non-current loans and borrowings, and should not necessarily be construed as a comprehensive indicator of the Group's overall liquidity. 6"Total cash costs per ounce sold" is defined by the Group as total cash costs divided by the ounces of gold sold during the period.
7"All-in-sustaining costs per ounce sold" is defined by the Group as costs related to sustaining production including TCC, SG&A expenses, sustaining CAPEX and other cash costs attributable to current sales divided by the ounces of gold sold during the period
8The Strategic Price Protection Programme comprises a series of zero cost Asian gold collars ("revenue stabilizer") and gold forward contracts covering 288 koz in 1H 2015.

Conference call information

Polyus Gold will host an analyst conference call on 20 August at 3 p.m. London time to present and discuss the financial results for first half of 2015.

To join the conference call, please dial:

UK free 080 0694 0257
UK International +44 (0) 1452 555566
USA free 1866 966 9439
Russia free 8108 00209 72044
Conference ID 16506357

A replay of the conference call will be available for a duration of 30 days.

To access the replay, please dial:

Russia +7 499 6771064
UK International +44 (0)1452550000
Conference ID 16506357

Enquiries:

Investor contact
Sergey Krivokhizhin, Director Investor Relations
+44 (0) 203 713 42 90 [email protected]

Media contact
Artem Gorbachev, Press Secretary
+44 (0) 203 713 42 90 [email protected]

Forward looking statements

This announcement may contain "forward-looking statements" concerning PGIL. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of PGIL's operations. Many of these risks and uncertainties relate to factors that are beyond PGIL's ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. PGIL assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.