Investor Day New York, 21 March 2016 London, 23 March 2016 Disclaimer
The information contained herein has been prepared for the use in this Presentation (the “Presentation”) and has not been independently verified. Such information is confidential and is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any purpose.
The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. Certain industry, market and competitive position data contained in this Prospectus come from official or third party sources believed to be reliable but ALROSA does not guarantee its accuracy or completeness.
This Presentation contains statements about future events and expectations that are forward-looking statements. Any statement in this Presentation that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause the ALROSA’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. ALROSA assumes no obligation to update, supplement or revise forward-looking or any other statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. ALROSA does not intend or have any duty or obligation to update or to keep current any information contained in this Presentation.
The diamond resources and reserves estimates provided in this Presentation have been prepared and presented in accordance with the standards and classifications of the JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as promulgated by the Australasian Joint Ore Reserves Committee), which differ in significant respects from the standards and classifications applicable to the disclosure of mineral resources and reserves under the laws and regulations of certain other jurisdictions, including the regulations of the U.S. Securities Exchange Commission (the “SEC”) with respect to registration statements and other documents filed with the SEC. Among other things, in accordance with the JORC Code, this Presentation provides certain mineral resources estimates classified as “inferred”, “indicated” or “measured”, which differ in significant respects from “probable” and “proven” mineral reserves estimates and are not disclosed in certain jurisdictions, including in SEC filings. There can be significant uncertainty as to whether mineral resources can ever be feasibly and commercially mined. For further explanation of the JORC Code, see the JORC website at www.jorc.org.
This Presentation does not constitute an offer to sell, or any solicitation of any offer to subscribe for or purchase, any securities. No part of this Presentation, nor the fact of its distribution, should form any basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
The information in this Presentation is subject to verification, completion and change. No representation or warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the accuracy or completeness of the information or opinions contained in this Presentation. None of ALROSA nor any of its shareholders, directors, officers or employees, affiliates, advisors, representatives nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.
This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.
This Presentation is not for distribution, directly or indirectly, to the public in the United States (including its territories and possessions, any State of the United States and the District of Columbia). These materials are not an offer or solicitation to purchase or subscribe for securities in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. ALROSA does not intend to register any part of any offering in the United States or to conduct a public offering of any of its securities in the United States.
By attending a meeting where this Presentation is made or reviewing this Presentation you acknowledge and agree to be bound by the foregoing. 2 Presenting team
Andrey Zharkov Igor Sobolev CEO First Vice-President – Chief Operating Officer
Igor Kulichik Andrey Rodionov CFO, Vice President Advisor to CEO
3 Contents
1 ALROSA Today and Tomorrow 5
2 Production Overview 16
3 Financial Overview 24
4 ALROSA Today and Tomorrow
5 ALROSA Today and Tomorrow
ALROSA is a global leader in rough diamond production with a strong financial profile
Financial summary
Revenue, RUB bn EBITDA, RUB bn Free Cash Flow EBITDA margin, % Net debt/EBITDA • ALROSA is a public diamond mining company with 23% free-float on the Moscow Exchange 1.9x 1.9x 1.7x • ALROSA’ production totalled 38.3 mln cts in 2015 225 representing 29% in global diamond output 207 200 • Strong financial performance resulting in 8% y-o-y 169 53% revenue growth to RUB 225 bn, 25% y-o-y EBITDA 150 growth to RUB 118 bn and EBITDA margin of 53% 45% 118 94 100 41% • Robust free cash flow generation of RUB 41 bn and 69 strong balance sheet with leverage reduction to 1.7x 42 50 41 17
0 2013 2014 2015
ALROSA’s shareholder structure Global diamond production
44% The Russian Federation 29% ALROSA
25% The Republic of Sakha 26% De Beers (Yakutia) 129 mln cts 8% Yakutian municipal districts 11% Rio Tinto
23% Free float 34% Others
6 ALROSA Today and Tomorrow In 2015, global luxury goods market continued to grow, albeit at a slower rate, due to lower demand in Asia-Pacific
Global luxury goods market by main regions $ bn
World 1-2% 302 4% 298 288 6% 272 5% 2% 5% Other 5% 5% 9% 5% 21% (6%) 19% Asia-Pacific 21% 3% 20% 7% 8% 9% 9% Japan 8% 9% 9% (8%)
31% North and South 31% 32% 31% 7% 4% 0% America
35% Europe 34% 6% 35% 2% 34% 5%
2012 2013 2014 2015
7 ALROSA Today and Tomorrow Jewelry segment followed luxury goods market dynamics, slowing down after solid growth in 2013-2014
Global luxury goods market by main segments $ bn
1-2% 302 4% 298 World 288 6% 272 1% 4% Other 4% 4% 0% 4% 4% 20% 20% 1% Beauty 20% 2% 20% 8%
Jewelry and watches 0% 23% 2% 24% 24% 7% 24%
25% Apparel 25% 2% 26% 25% 2% 3%
27% 28% Accessories 6% 27% 8% 28% 3%
2012 2013 2014 2015
8 ALROSA Today and Tomorrow
In 2015, polished diamond sales from accumulated inventory surplus amounted to $2.6 bn, reducing excess inventories to a minimum level
Inventories in polishing segment $ bn
19.4 16.3 17.8 17.7 18.6 1.8 2.7 14.2 3.1 0.7 3.1 0.1
17.0 16.8 16.7 13.2 14.7 14.1
2010 2011 2012 2013 2014 2015
Technological inventories Accumulated inventory excess
Sales of India-produced polished diamonds $ bn 2.6 20.6 18.0
13.5
Rough diamond import to India in Rough diamond polishing Polished diamond sales from Polished diamond export from India 2015 inventories in 2015
9 Source: Gem Jewellery Export Promotion Council, Company estimation ALROSA Today and Tomorrow
Declining demand for rough diamonds in 2015 impacted diamond prices and sales volumes
ALROSA rough diamond price index under long-term agreements and sales on spot
+46% (20%) +7% 0% (15%)
+21%
2010 2011 2012 2013 2014 2015
ALROSA rough diamond sales and production mln cts 2010 2011 2012 2013 2014 2015 Sales 39.4 32.9 33.2 38.0 39.6 30.0 Production 34.3 34.6 34.4 36.9 36.2 38.3 Sales above/(below) production from 5.1 (1.7) (1.2) 1.1 3.4 (8.3) inventories 10 ALROSA Today and Tomorrow
Demand for diamond jewelry is expected to grow at ~2-4% annually in 2016-2025
Global diamond jewelry sales dynamics forecast y-o-y, CAGR
2-7% 0% ~2-4%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Luxury goods sales in 2015, Major assumptions of global diamond jewelry breakdown by region demand forecast
Other countries The Americas 5% 31%
Japan Asia-Pacific Region USA moderate growth of 3-4% annually 9% 19%
Europe Asia 4-6% annual growth with volatility in short-term 35%
Europe conservative growth of 1% annually
Japan growth of less than 1% annually
11 ALROSA Today and Tomorrow Despite production increases announced by mining companies in the recent years global rough diamond production has remained relatively flat
Global rough diamond production historical data mln cts
176 168 169 mln cts 163 130 129 120 128 123 128 125 126 mln cts
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Global diamond production (based in Companies’ plans and life of mines periods) mln cts, y-o-y CAGR
~2%
156 129
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Existing mines New mines
12 ALROSA Today and Tomorrow Rough diamonds market is expected to be balanced in the mid-term; demand is expected to exceed supply after 2019
Major diamond mining companies accumulated inventories in 2015, which may become an additional source of supply for the diamond market in the mid-term
Demand-supply imbalance is expected after 2019
Global demand and supply imbalance $ bn
20 The market is balanced Imbalance emerge
Rough diamonds demand: 0-2% annually Rough diamonds demand: 2-4% annually Rough diamonds demand
Rough diamonds deliveries to the market in the amount of production 15
Rough diamonds deliveries to the market including sales from inventories
Rough diamonds sales from inventories Rough diamonds deliveries to the market: 0-2% Rough diamonds deliveries to the market: 1-2% annually annually 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 13
13 ALROSA Today and Tomorrow While 2015 ALROSA’s diamond sales in 2015 decreased by 30%, in line with diamond market, preliminary sales results for January-February 2016 point to a market rebound
ALROSA rough diamond sales $ mln
+25%
4,901
4,793
3,437
1,021
776 701 620 568 527
2013 2014 January - March 2015 Q2 2015 Q3 2015 Q4 2015 2015 January - February February 2015 2016
14 ALROSA Today and Tomorrow
Strategic directions for development
Focus on diamond mining
Operational efficiency
ALROSA IS Geological exploration ABOUT
Marketing and brand
Non-core assets divestment
15 Production Overview
16 Production Overview
ALROSA’ diamond production is well-diversified among divisions and types of mining
Geography of ALROSA’ production assets 32% Aikhal Division Aikhal pipe 12.3 Jubilee pipe mln cts Komsomolskaya pipe
20% Nyurba Division Nyurbinskaya pipe 7.5 Botuobinskaya pipe mln cts Alluvial deposits (1)
18% Mirny Division Mir pipe 6.9 Arkhangelsk International pipe mln cts region Russian Federation Alluvial deposits (3)
11% Udachny Division Republic of Sakha 4.3 (Yakutia) Udachny pipe Zarnitsa pipe mln cts Alluvial deposits (2)
9% Almazy Anabara ALROSA Total 3.3 Alluvial deposits (7) mln cts
5% Nizhne-Lenskoe Share of open-pit mining 2.0 55% from 7 mines in 2015 production Alluvial deposits (3) mln cts
Share of underground mining 25% from 4 mines in 2015 production Total resources, 5% Severalmaz 973 mln cts incl. reserves Arkhangelskaya pipe 2.0 Share of alluvial mining 21% Karpinskogo-1 pipe mln cts from 16 alluvial placers in 2015 production 608 mln cts Total reserves
Source: Company data, JORC as of 01 July 2013 (Micon) 17 Note: percentage and absolute figures indicate the share of division in 2015 ALROSA diamond production Production Overview ALROSA intends to increase diamond production to over 41 mln cts by 2019 Severalmaz and Udachny are the key production growth drivers
ALROSA production forecast mln cts
1.03 1.05 1.00 0.97 0.94 0.91 0.90 Grade (ct/t)
CAGR 15–21F
41.5 41.2 41.3 1% 39.9 39.9 39.0 38.3 4.3 2.4 4.6 5.1 17% 2.0 3.2 2.0 3.3 3.9 5.5 4.6 5.4 5.5 5.7 5%
33.7 32.4 32.0 32.1 31.7 31.0 30.4 (1%)
2015 2016F 2017F 2018F 2019F 2020F 2021F
Severalmaz Udachny pipe Others*
Source: Company data * others include Mirny division, Nyurba division, Aikhal division, Almazy Anabara, Nizhne-Lenskoye and Udachny division excluding Udachny pipe production 18 Production Overview
In 2015, ALROSA continued to develop its core growth projects
Udachny underground mine Severalmaz On June 27, 2014 ALROSA started to mine ore from On March 14, 2014 processing plant with annual capacity Udachny underground mine of 3 mln tons of ore was put into operation, having increased total capacity up to 4 mln tons of ore a year
target target 2014 2015 2014 2015 capacity capacity
Ore processed, mln t 0.1 0.3 4.0 Ore processed, mln t 3.3 4.0 4.0
Diamond production, mln cts 0.1 0.4 5.4 Diamond production, mln cts 1.6 2.0 4.3
19 Production Overview Economic efficiency of Udachny underground mine will be fostered by block caving mining method
Traditional cut-and-fill mining Block caving method
Mir underground International Aikhal underground Udachny underground mine mine underground mine mine
Production level Backfilled production level
Next production level Next production level
20 Production Overview
ALROSA’s operational results in 2015 are in line with its long-term strategy 21
Diamond production
+6%
2015 2014 38.3 mln cts 37.1 mln t 36.2 mln cts 1.03 cpt 35.9 mln t 1.01 cpt
11.6 Diamonds produced (mln cts) 9.7 10.6 9.6 7.9 8.0 8.4 8.6
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Ore and gravels processed (mln t) 5.4 10.3 13.0 7.3 5.5 10.8 13.5 7.4
Grade (cpt) 1.47 0.78 0.75 1.45 1.52 0.89 0.86 1.17
2015 diamond production totalled 38.3 million carats, an increase of 6% y-o-y Production results were driven by the following factors: - launch of Botuobinskaya pipe, - diamond output growth at Karpinskogo-1 pipe of Lomonosov deposit (Severalmaz), - growth in diamond production at the Mir underground mine as a result of measures to stabilize its hydrogeological conditions, - the Udachny underground mine development
21 Production Overview
ALROSA continues to streamline its operations to focus on diamond mining
Number of subsidiaries
70
39 34 25 20
01.01.2009 01.01.2015 01.01.2016 01.01.2017 01.01.2020
Prior to 2015, ALROSA sold 31 non-core In 2015, ALROSA sold 5 non-core In 2016, ALROSA is planning to sell assets with total proceedes of more than assets with total proceeds of 9 non-core assets, incl.: RUB 7 bn, incl.: RUB 0.3 bn , incl.: • Timir iron ore project • ALROSA-VGS • Viluiskaya-3 HPP • Irelyakhneft oil project • MAK-Bank • HIDROCHICAPA • ALROSA Insurance • Nikonovka • Arcos Ltd. Company • M&Diamond • Suntarceolit
22 Production Overview
ALROSA continues optimization and increase in efficiency of selected non-core businesses
Restructuring of airline operations 1 Reduction of losses by ~RUB300 mln as a result of transferring of 6 airports to federal ownership
Restructuring of kindergarten education centres 2 Subsidies ~RUB450 mln
3 Restructuring of housing services and utilities
Subsidies from Yakutian budget for housing and utilities, agriculture RUB mln
1,728 1,741 1,854
2014 2015 2016
23 Financial Overview
24 Financial Overview
Financial results
2015 RUB mln 2015 2014 vs. 2014 Operating performance Production, mln cts 38.3 36.2 6% Sales, mln cts, incl.: 30.0 39.6 (24%) gem quality diamonds sales, mln cts 19.7 27.7 (29%) industrial quality diamonds sales, mln cts 10.3 11.9 (13%) IFRS income statement of profit or loss and other comprehensive income Revenue 224,524 207,159 8% Cost of sales (93,240) (99,334) (6%) EBITDA 118,498 93,857 26% EBITDA margin 53% 45% - Net profit / (loss) 32,192 (16,832) - Net profit margin 14% - - EPS, RUB 4.17 (2.44) - IFRS statement of financial position Cash and cash equivalents 20,503 21,693 (5%) Total debt 223,159 197,160 13% Net debt 202,656 175,467 15% Net debt / EBITDA 1.7х 1.9х - Equity attributable to owners of PJSC ALROSA 151,742 137,051 11% IFRS statement of cash flows Cash inflow from operating activities before changes in working capital 119,980 94,840 27% Income tax paid (10,345) (12,379) (16%) Changes in working capital (34,094) (4,346) 7.8x Net cash inflow from operating activities 75,541 78,115 (3%) Purchase of property, plant and equipment (34,241) (36,056) (5%) Free cash flow 41,300 42,059 (2%) ROIC 27% 22% -
25 Financial Overview
ALROSA’s financial results are impacted by foreign exchange rates fluctuations
Sensitivity analysis RUB mln -10 RUB/USD 2015 +10 RUB/USD
Revenue 191,716 224,524 257,332 90% received in USD as diamond prices are set in USD (14.61%) +14.61%
Cost of sales (90,330) (93,240) (96,150) 20% are driven by USD as MET is calculated on USD diamond prices (3.12%) +3.12%
EBITDA 88,601 118,498 148,395 70% linked to USD (25.23%) +25.23% Capital expenditures (33,794) (34,241) (34,688) <10% USD-denominated (1.30%) +1.30% Exchange rate RUB/USD 72% 30% (4%)
average 76.61 min 70.15 max 83.59
average 61.32 min 49.18 72.88 max 72.88 70.15
average 38.60 56.26 min 32.66 max 67.79
32.73
31.12.2013 31.12.2014 31.12.2015 15.03.2016 26 Financial Overview Ruble depreciation offset decreases in volumes and prices, resulting in growth of gem-quality rough diamond sales in 2015
Gem-quality rough diamond revenue analysis RUB mln
Gem-quality rough diamond average price, $/ct
66,523
169 171
(49,265) (1,310)
+9% 185,876 169,928
Gem-quality Gem-quality Sales volume Decrease in average price of gem- rough diamond sales Ruble depreciation rough diamond sales decrease quality diamonds in 2014 in 2015
27 Financial Overview Cost of production increase was impacted by extraction tax, wages, salaries and other staff costs and fuel and energy costs
Cost of production Cash costs by mining method RUB mln RUB/ct
2015 2014 2015 2014 vs. 2015 2014
Wages, salaries and other staff costs 40,253 34,279 17% 2,431 2,477 Extraction tax 23,323 14,697 59% 2,139 2,191 2,132 Depreciation 19,096 18,452 3% 1,879 Fuel and energy 17,610 13,686 29% 1,733
Materials 12,098 9,569 26% 1,420 Services 5,748 5,138 12% Transport 2,118 2,474 (14%) Other 1,568 1,058 48% Cost of production 121,814 99,353 23%
Movement in inventory of diamonds, ores and (29,832) (898) 33.2x concentrates
Cost of diamonds for resale 1,258 879 43% ALROSA Underground Open-pit Alluvial Cost of sales 93,240 99,334 (6%)
ALROSA has already implemented certain saving initiatives in 2016 and has cut cost for operating activities by RUB3.4 bn, for investing activities by RUB5.0 bn and for financial activities by RUB3.5 bn – totaled RUB11.9 bn
–3.4 –5.0 –3.5 –11.9 RUB bn RUB bn RUB bn RUB bn
Operating activities Investing activities Financing activities
28 Financial Overview
In 2015, EBITDA increased primarily due to growth in gross profit from diamond sales
EBITDA analysis RUB mln
EBITDA margin
53% 297 272 23,844 671 (443)
45%
118,498 +26% 93,857
EBITDA Increase in Increase in other Decrease in Decrease in exploration EBITDA Increase in SG&A 2014 gross profit (1) profits social costs costs 2015
Note: (1) gross profit net of depreciation 29 Financial Overview
ALROSA’s long-term capital expenditure forecast
Planned vs Actual Capex RUB bn
38.5 38.9 -2.5 35.6 0.40,4 -1.4 36.0 34.2 2.6 6.8 33.3 1.5 32.0 31.4 1.5 1.01,0 2.1 28.5 2.4 7.9 6.5 5.6 1.21,2 4.6 3.0 20.9
0.50,5 25.6 5.1 18.4 27.2 20.5 20.0 20.7 20.8
12.2
7.8 6.1 5.0 5.4 3.6 3.6 3.1 2.5
2014 2015 2016F 2017F 2018F 2019F 2020F 2021F
Industrial and social infrastructure Mining operations Udachny division Severalmaz Actual vs estimated capex
30 Financial Overview
ALROSA’s debt structure
Loans and borrowings Loans and borrowings breakdown $ mln As at 31 December 2015
Total debt/ 6.1x 2.9x 1.5x 2.0x 2.0x 2.1x 1.9x EBITDA
67% Bank loans 33% Eurobonds
4,127 3,496 3,871 3,505 3,130 2,866 3,040 100% US dollar-denominated debt
2009 2010 2011 2012 2013 2014 2015 Average 12.6% 7.8% 7.8% 7.1% 5.7% 6.1% 5.8% interest rate 88% Long-term debt 12% Short-term debt
Maturity profile of loans and borrowings $ mln
Bank loans Eurobonds
1,090 1,000
600
350
0
2016 2017 2018 2019 2020 . 31 Financial Overview
ALROSA has a track record of strong cash flows and dividends
Operating cash flow, capital expenditures, free cash flow and dividends Dividends per share, RUB
(36,056) (38,165) (34,241)
(30,050)
78,115 75,541 53,533 1.47 1.47 42,007 1.11
15,368 42,059 41,300 11,957 10,826 10,826 8,175
OCF CapEx FCF Dividends OCF CapEx FCF Dividends OCF CapEx FCF Dividends OCF CapEx FCF 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015
32 Appendix
33 Management team overview
Executive Team Operational Team
Andrey Zharkov President - chief executive officer Mikhail Lopatinsky
• Joined the Company in 2015 Director, Mirny mining and processing division division • Deputy head of Gokhran (2010–2015) • Joined the Company in 1992 CEO • Over 23 years of industry experience • Chief commercial officer at Prioksky non-ferrous metals plant (2009–2010) Mirny • Held various management positions in Russian metals and mining companies, such as Norilsk Nickel and RUSAL (2001–2009) Alexander Makhrachev
Ilya Ryashchin division Director, Udachny mining and processing division First vice-president for finance and economy • Joined the Company in 1979 • Joined the Company in 2012 • Over 36 years of industry experience
• Head of planning and budgeting department at Russian Railways (since Udachny
Finance Finance 2006) and economy and • Deputy Head of finance department, Ministry of Railways of Russia (since Ravil Sanatulov
2001) Director, Aikhal mining and processing division division • Joined the Company in 1986 • Over 29 years of industry experience
Igor Sobolev Aikhal First vice-president – chief operating officer
• Joined the Company in 2007 COO • Head of Capital construction division, mining & metallurgical directorate, Igor Uvarov
Norilsk Nickel (2000-2007) Director, Nyurba mining and processing division division • Joined the Company in 1989
• Over 26 years of industry experience Nyurba
Igor Kulichik Vice-president - chief financial officer Matvey Yevseev CFO • Joined the Company in 2002 CEO Almazy Anabara • Vice-president and CFO of ALROSA since August 2009 Anabara • Joined the Company in 1997
• Over 18 years of industry experience Almazy
Yuri Okoyomov Andrey Pismenny Vice-president for sales CEO Severalmaz
Sales • Joined the Company in 1993 • Joined the Company in 1997
• Vice-president of ALROSA for marketing and sales since August 2009 • Over 18 years of industry experience Severalmaz • Chief engineer of ALROSA in 2010-2015
34 Supervisory Board overview (1/2)
1 Anton Siluanov 2 Yegor Borisov 3 Alexander Galushka 4 Andrey Zharkov
Finance Minister of the President of the Republic of Minister for the Development President (CEO) of ALROSA Russian Federation Sakha (Yakutia) of the Russian Far East
Chairman of the Board of First Deputy Chairman of the Deputy Chairman of the directors Supervisory Board Supervisory Board
Nominated by: Russian Federation Nominated by: Republic of Sakha (Yakutia) Nominated by: Russian Federation Nominated by: Russian Federation
Previously held positions include Previously held positions include Previously held positions include: Previously held positions include • 2005 – 2011 – Deputy Minister of • 2003 – 2010 – Chairman of the • 2004 – 2010 – President of Non-Profit • 2009 – 2010 – Сhief Commercial Finance of the Russian Federation Government of the Republic of Sakha Partnership “Russian Collegium of Officer at Prioksky Non-Ferrous Metals • Since 2011 – Minister of Finance of the (Yakutia) Appraisers” Plant Russian Federation • 2010 – 2014 – President of the • 2010 – 2012 – President, Co-chairman • 2010 – 2015 – Deputy Head of Republic of Sakha (Yakutia) of All-Russian public organisation Gokhran under the Russian Ministry of • Since 2014 – Head of the Republic of Delovaya Rossiya Finance Sakha (Yakutia) • 2011 – 2012 – member of state • Since 2015 – President (CEO) of commission on the socio-economic ALROSA development of the Far East, the Republic of Buryatia, the Zabaikalye and Irtutsk regions • Since 2013 – Minister of the Russian Federation for the Development of the Far East
5 6 7 8 Oleg Fedorov Sergey Barsukov Maria Gordon Alexey Chekunkov
Adviser to the Head of the Director, Financial Policy Chief portfolio manager at CEO of Far East and Baikal Federal Agency for State Department, Ministry of Finance Pacific Investment Region Development Fund Property Management of the Russian Federation Management Co. (PIMCO) until 2014
Nominated by: Russian Federation Nominated by: Russian Federation Nominated by: minority shareholders Nominated by: Russian Federation
Previously held positions include: Previously held positions include Previously held positions include Previously held positions include • 2009 – 2012 – Head, Department for • 2007 – 2008 – First Deputy General • 1998 – 2010 – Goldman Sachs, • 2009 – 2011 – Head of New Nations cooperation with governmental Director, Agency for Housing Mortgage investment activity Capital Investment Company authorities and companies with Lending (AHML) • 2010 – 2014 – PIMCO, investment • 2011 – 2013 – Director, member of the government participation, department of • 2008 – 2010 – Assistant to Vice activity board, member of investment investment and banking on global Chairman of the Russian Federation committee of the Russian Direct markets, VTB Capital Government – Russian Federation Investment Fund • Since 2012 – Adviser to the Head of the Minister of Finance • Since 2014 – Director of the Far East Federal Agency for State Property • Since 2010 – Director, Financial Policy Development Fund Management Department, Ministry of Finance of the Russian Federation 35 Supervisory Board overview (2/2)
9 10 11 12 Oleg Grinko Pavel Ulyanov Valentin Nikiforov Galina Danchikova
Chairman of the Board of Head of Energy Division at Head of representative office Chairwoman of the Government Directors at Sberinvest Asset RUSAL Global of Nyurbinsky district in of the Republic of Sakha Management Management B.V. Yakutsk (Yakutia)
Nominated by: Russian Federation as an Nominated by: Russia Federation as an Nominated by: minority shareholders as an Nominated by: Republic of Sakha (Yakutia) independent director independent director independent director
Previously held positions include Previously held positions include Previously held positions include Previously held positions include: • Since 2004 – Chairman of the Board of • Since 2007 – Head of Energy Division • Since 2009 – Head of representative • 2007 – 2010 – Deputy Chairman of the Directors at Sberinvest Asset at RUSAL Global Management B.V. office of Nyurbinsky district in Yakutsk Government of the Republic of Sakha Management (Yakutia) • Since 2006 – Adviser to Director of • Since 2010 – Chairman of the investment and external Government of the Republic of Sakha communications in Peresvet-Invest (Yakutia) group
13 14 15 Yevgenia Grigoryeva Valentina Kondratyeva Peter Alekseyev
Minister of Property and Land Head of state autonomous CEO of Republican Investment Relations of the Republic of agency Center for Strategic Company Sakha (Yakutia) Research of the Republic of Sakha (Yakutia)
Nominated by: Republic of Sakha (Yakutia) Nominated by: Republic of Sakha (Yakutia) Nominated by: Republic of Sakha (Yakutia)
Previously held positions include Previously held positions include Previously held positions include • 2007 – 2011 – First Deputy Minister of • 2003 – 2013 – First Deputy Minister for • 2009 – 2013 – Deputy Head, Head of Property Relations of the Republic of Economic Development of the Republic Department of state and legal affairs in Sakha (Yakutia) of Sakha (Yakutia) Presidential Administration and the • Since 2011 – Minister of Property and • Since 2013 – Head of state Government of the Republic of Sakha Land Relations of the Republic of autonomous agency Center for (Yakutia) Sakha (Yakutia) Strategic Research of the Republic of • Since 2013 – CEO of OJSC Republican Sakha (Yakutia) Investment Company
36 Latest operational results
Cash Cash Cash Cash Ore and sands Diamond costs costs costs costs Type of Grade Grade processing production per ton per per ton per mining (ct/t) (ct/t) (‘000 t) (‘000 cts) of ore, carat, of ore, carat, (RUB) (RUB) (RUB) (RUB)
2014 2015 2014 2015 2014 2015 Aikhal Division 9,478 9,141 12,565 12,322 1.33 1,962 1,480 1.35 2,487 1,845 Jubilee pipe open-pit 8,506 8,355 9,122 9,405 1.07 1,445 1,347 1.13 2,014 1,789 Aikhal underground mine underground 589 526 3,292 2,841 5.59 8,556 1,531 5.40 8,193 1,517 Komsomolskaya pipe open-pit 383 260 152 77 0.40 3,312 8,360 0.29 6,166 20,915 Mirny Division 4,903 5,706 6,088 6,908 1.24 2,857 2,301 1.21 3,342 2,567 International underground mine underground 445 486 3,862 4,024 8.61 14,047 1,632 8.28 16,303 2,000 Mir underground mine underground 481 647 1,463 2,198 3.04 12,180 4,002 3.40 10,680 3,143 Alluvial and technogenic deposits alluvial 3,978 4,574 764 686 0.19 466 2,422 0.15 666 4,043 Udachny Division 4,814 5,377 3,679 4,297 0.76 2,163 2,831 0.80 2,714 3,396 Udachnaya pipe open-pit 3,710 3,250 3,390 3,515 0.91 1,802 1,972 1.08 2,253 2,084 Udachnaya underground mine underground 89 262 114 413 1.28 21,687 16,970 1.58 14,404 9,142 Zarnitsa pipe open-pit 1,015 993 176 225 0.17 1,771 10,241 0.23 2,267 10,025 Alluvial deposits alluvial - 872 - 145 - - - 0.17 1,429 8,573 Nyurba Division 2,000 2,040 7,363 7,510 3.68 4,776 1,297 3.68 6,371 1,731 Nyurbinskaya pipe open-pit 1,255 978 6,542 4,809 5.21 4,776 916 4.92 6,371 1,296 Botuobinskaya pipe open-pit - 135 - 942 - - - 6.97 6,371 913 Alluvial deposits alluvial 745 927 821 1,759 1.10 4,776 4,334 1.90 6,371 3,358 Lomonosov Division (Severalmaz) 3,309 3,988 1,639 1,950 0.50 547 1,105 0.49 1,059 2,166 Almazy Anabara alluvial 5,604 5,222 3,059 3,309 0.55 936 1,715 0.63 817 1,290 Nizhne-Lenskoye alluvial 5,814 5,640 1,818 1,964 0.31 537 1,718 0.35 937 2,691 ALROSA 35,922 37,114 36,212 38,260 1.01 1,747 1,733 1.04 2,229 2,139 underground 1,607 1,921 8,730 9,476 5.43 11,900 2,191 4.91 11,947 2,431 open-pit 18,178 17,960 21,020 20,921 1.16 1,642 1,420 1.16 2,189 1,879 alluvial 16,141 17,235 6,463 7,863 0.40 854 2,132 0.47 1,158 2,477
37 The share of underground production will increase from 24% in 2014 to 34% in 2021
ALROSA production forecast, by mining method mln cts
1.01 1.03 1.05 1.00 0.97 0.94 0.91 0.90 Grade (ct/t)
Share in Share in production, production, 39.9 39.9 41.5 41.2 41.3 2014 38.3 39.0 2021F 36.2
14,8 14,5 13,9 34% 9,5 14,3 24% 8,7 12,4 15,1
20,9 21,0 19,1 19,8 19,6 19,5 47% 58% 17,5 18,4
6,5 7,9 7,4 7,3 7,2 6,9 7,1 7,8 19% 18%
2014 2015 2016F 2017F 2018F 2019F 2020F 2021F
Underground mining Open-pit mining Alluvial mining
38 Detailed reserves and resources statement
Reserves Resources inclusive of Reserves
Reserve Reserve Resource Resource JORC Tonnage Tonnage Deposit Grade Carats Deposit JORC Category Grade Carats Category (kt) (kt) (ct/t) (kct) (ct/t) (kct)
Udachny Division Udachny Division Udachnaya Pipe, ore stockpile Measured 4,820 1.52 7,329 Udachnaya Pipe, underground mining Probable 83,017 1.31 108,627 Indicated 75,265 1.50 112,782 Udachnaya Pipe, underground mining Inferred 78,305 1.25 98,157 Udachnaya Pipe, open pit mining Probable 4,267 1.03 4,407 Udachnaya Pipe, open pit mining Indicated 3,785 1.19 4,501 Udachnaya Pipe, ore stockpile Proven 4,820 1.52 7,329 Udachnaya Remnants above -280 m Indicated 3,247 1.54 4,995 Zarnitsa Pipe Indicated 58,554 0.21 12,007 Zarnitsa Pipe Probable 58,538 0.20 11,995 Aikhal Division Indicated 129,017 0.84 108,166 Aikhal Division Jubilee Pipe Inferred 65,977 0.62 40,594 Jubilee Pipe Probable 107,163 0.90 96,982 Potential 8,431 0.32 2,734 Indicated 7,729 4.68 36,159 Aikhal Pipe Aikhal Pipe Probable 5,217 4.37 22,789 Inferred 8,269 3.87 31,967 Komsomolskaya Pipe Indicated 4,812 0.38 1,808 Komsomolskaya Pipe Probable 4,847 0.37 1,807 Mirny Division Indicated 29,211 3.55 103,782 Mirny Division Mir Pipe Inferred 10,913 3.11 33,940 Mir Pipe Probable 29,586 3.29 97,230 Indicated 4,208 8.73 36,739 International Pipe Inferred 1,542 7.98 12,304 International Pipe Probable 4,555 8.09 36,585 Solur-Vostochnaya Indicated 7,527 0.78 5,903 Solur-Vostochnaya Solur-Vostochnaya Placer Inferred 1,198 0.72 865 Probable Solur-Vostochnaya Placer 9,348 0.61 5,722 Nyurba Division Indicated 12,264 4.13 50,661 Nyurba Division Nyurbinskaya Pipe Inferred 1,192 5.42 6,465 Nyurbinskaya Pipe Probable 9,875 4.09 40,394 Indicated 13,679 5.19 71,044 Botuobinskaya Pipe Inferred 2,685 5.14 13,790 Probable Botuobinskaya Pipe 13,839 5.13 70,971 Indicated 6,176 1.91 11,814 Nyurbinskaya Placer Nyurbinskaya Placer Probable 6,373 1.85 11,813 Inferred 6,407 1.66 10,638 Botuobinskaya Placer Inferred 1,085 0.49 537 Lomonosov Division (PJSC Severalmaz) Maiyskoe Kimberlite Body Inferred 3,841 2.86 10,996
Archangelsky Pipe Probable 57,087 0.76 43,189 Lomonosov Division (PJSC Severalmaz) Indicated 56,226 0.77 43,406 Probable Arkhangelskaya Pipe Karpinsky-1 Pipe 18,438 1.13 20,918 Inferred 39,408 0.98 38,623 Indicated 24,988 1.08 26,960 Almazy Anabara Karpinsky-1 Pipe Inferred 5,168 1.26 6,512 Ebelyakh and Gusinyy Ruchey Placer Probable 36,319 0.74 26,749 Almazy Anabara Indicated 30,508 0.88 26,749 Ebelyakh and Gusinyy Ruchey Placer Total OJSC ALROSA Inferred 6,308 0.45 2,848 Proven 4,820 1.52 7,329 Total for OJSC ALROSA Measured 4,820 1.52 7,329 JORC Reserves Probable 448,469 1.34 600,178 JORC Resources inclusive of Indicated 467,197 1,41 657,477 Inferred 232,298 1.33 308,235 Total (1) 453,289 1.34 607,507 Reserves Total* 704,315 1.38 973,041 Source: Micon report as at 01 July 2013 39 * does not include assets outside of JORC perimeter, with total GKZ reserves of 230 mln cts as at 01/01/2013 Thank you!
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