Competent Person's Report – Mineral Assets PJSC Polyus
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AMC Consultants Pty Ltd ABN 58 008 129 164 Level 1, 1100 Hay Street WEST PERTH WA 6005 AUSTRALIA T +61 8 6330 1100 F +61 8 6330 1199 E [email protected] W amcconsultants.com Competent Person's Report – Mineral Assets PJSC Polyus AMC Project 216081 5 June 2017 Adviser of choice to the world’s minerals industry Competent Person's Report PJSC Polyus 216081 5 June 2017 The Directors PJSC Polyus 15/1 Tverskoy Boulevard Moscow 123104 Russian Federation Dear Sirs Competent Person’s Report on Certain Mineral Assets of PJSC Polyus Purpose and scope of the Competent Person’s Report PJSC Polyus (Polyus) commissioned AMC Consultants Pty Ltd (AMC) to prepare an independent Competent Person’s Report (CPR) on certain mineral assets (Mineral Assets) of Polyus located in the Russian Federation (Russia) for inclusion in a prospectus (Prospectus) for a possible offering of shares and global depositary shares in Polyus (Offering). AMC consents to the inclusion of this letter and the attached CPR (which are to be read in conjunction with each other) in the Prospectus and the inclusion of AMC’s name in the form and context in which it appears in the Prospectus to be issued in connection with the Offering. The CPR was prepared in accordance with the requirements and recommendations of: The United Kingdom (UK) Financial Conduct Authority (FCA) which is the United Kingdom competent authority for the purposes of Directive 2003/71/EC, as amended (Prospectus Directive). The Prospectus Rules and Listing Rules published by the FCA from time to time. The European Securities and Markets Authority – “ESMA update of the CESR recommendations – The consistent implementation of Commission Regulation (EC) No 809/2004 implementing the Prospectus Directive, 20 March 2013, ESMA/2013/319” (ESMA Recommendations) and, in particular, paragraphs 131, 132, and 133 of the ESMA Recommendations which pertain to mineral companies, save for the section on valuation of reserves, which is not required to be included herein. Polyus is considered to be a mineral company as defined in the ESMA Recommendations paragraph 131, given that its principal activities are the extraction, refining, and sale of gold. The mining and processing facilities of Polyus are located in the Krasnoyarsk and Irkutsk regions and the Sakha Republic of Russia. Polyus also undertakes gold exploration, evaluation, and development work; the development work being primarily at the Natalka licence area located in the Magadan region and other regions of Russia. The ESMA Recommendations paragraph 132 requires that prospectuses include information pertaining to: a) Mineral resources, ore reserves and exploration results in accordance with an acceptable internationally recognized reporting standard. b) Anticipated mine life and exploration potential. c) An indication of the duration and main terms of licences and other conditions for exploring and developing those licences. d) An indication of the progress of mineral exploration and extraction and related aspects. e) An explanation of any exceptional factors that have influenced a) to d) above. The CPR satisfies the requirements of the ESMA Recommendations paragraph 132 as referred to above. In relation to acceptable codes as referred to in a) above, the CPR has also been prepared in accordance with the following mining industry codes as referred to in the ESMA Recommendations Appendix I (Appendix I): amcconsultants.com i Competent Person's Report PJSC Polyus 216081 The JORC Code1. The VALMIN Code2 to the extent that this code is relevant to the scope of the CPR. In this regard, it should be noted that the scope of the CPR, as specified by Polyus, does not include a valuation of the Mineral Assets. The CPR includes technical assessments, as defined in the VALMIN Code, of the Mineral Assets. Under the ESMA Recommendations paragraph 133, the Prospectus should contain a CPR that should: a) Be prepared by an individual who: Possesses the competency as prescribed by the relevant codes as referred to in relation to the ESMA Recommendations paragraph 132 above. Is independent of the company, its directors, senior management and its other advisers; has no economic or beneficial interest (present or contingent) in the company or in any of the mineral assets being evaluated and is not remunerated by way of a fee that is linked to the admission or value of the issuer. b) Be dated not more than six months from the date of the prospectus provided the issuer affirms in the prospectus that no material changes have occurred since the date of the CPR. c) Report mineral resources and where applicable ore reserves and exploration results in accordance with one or more of the reporting standards that is acceptable under Appendix I. d) Contain information on the company’s mineral assets, having regard to the recommended content of a mining CPR as outlined in the ESMA Recommendations Appendix II (Appendix II). The CPR satisfies the requirements of the ESMA Recommendations paragraph 133 as outlined above. AMC’s Qualifications AMC is a firm of independent geological, mining geotechnical, mine engineering and mine management consultants offering expertise and professional advice to the exploration, mining and mining finance industries from its offices in Australia (Melbourne, Perth, Brisbane, and Adelaide), United Kingdom (Maidenhead), Canada (Toronto and Vancouver), and Singapore. AMC’s activities include the preparation of due diligence reports on, and reviews of, mining and exploration projects for equity and debt funding, and for public reports. AMC employs a total of approximately 140 staff. AMC has extensive experience in conducting feasibility studies and reviews of Mineral Resources and Ore Reserves. AMC has undertaken over eighty assignments in the last ten years involving Mineral Resource and Ore Reserve estimation and reviews of worldwide Mineral Resources and Ore Reserves. AMC personnel have become familiar with the Polyus management team and Polyus Mineral Assets through its work on Polyus operations and projects, including preparation of a report on the Polyus 2016 Mineral Resource and Ore Reserve estimates. AMC conducts independent assessments of Mineral Resources and Ore Reserves for the purposes of public issue documents. This is a key competency of AMC, and AMC’s public reports have included: Australian Stock Exchange – independent technical specialist’s reports in relation to takeovers, mergers and acquisitions, sale agreements, option agreements, and prospectuses. Hong Kong Stock Exchange – prospectus. Toronto Stock Exchange – technical reports. London Stock Exchange – AIM listings – competent person’s reports. Singapore Stock Exchange – competent person’s reports in relation to initial public offerings. 1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2012 Edition. Effective 20 December 2012 and mandatory from 1 December 2013. Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia (JORC). 2 Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets The VALMIN Code 2015 Edition, Prepared by the VALMIN Committee, a joint committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists. amcconsultants.com ii Competent Person's Report PJSC Polyus 216081 The members of AMC’s team who prepared the CPR are listed in the Appendix to the CPR. They include: Mr Mark Chesher who has overall responsibility for preparation of the CPR. He has 30 years of experience in the mining industry in a broad range of operations, management and senior technical roles. He is AMC’s Open Pit Manager, based in Perth, Australia and is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy. Mr Lawrie Gillett, who led AMC’s peer review of the CPR. He has 40 years of experience in the mining industry and is AMC’s Practice Leader – Corporate Consultancy Australia, and is a director of AMC’s parent company. He is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy, and is a Graduate Member of the Australian Institute of Company Directors. AMC’s Independence AMC has undertaken several technical consulting assignments on the Mineral Assets for Polyus or related companies during 2013 to 2017. In all these assignments, AMC acted as an independent party and has no pecuniary interest in the performance of the Mineral Assets. AMC’s consulting assignments for Polyus comprise: Mineral Resource estimation for Olimpiada, Blagodatnoye, Verninskoye, the Alluvials, Kuranakh, Natalka, Sukhoi Log, Poputninskoye, Chertovo Koryto, Bamskoye, and Medvezhy. Ore Reserve estimation for Olimpiada, Blagodatnoye, Verninskoye, the Alluvials, Kuranakh, Natalka, and Chertovo Koryto. Assistance with early identification of problems and mine planning at Natalka, and contribution to an optimization study for Natalka. Evaluation of mine plans for Verninskoye and Chertovo Koryto to assist with planning and technical ranking of development options for the region. Overall reporting of Mineral Resources and Ore Reserves for the Mineral Assets. Preparation of the attached CPR for inclusion in the Prospectus. For these consulting assignments and preparation of the CPR, AMC was paid a fee according to its normal per diem rates and being reimbursed for out-of-pocket expenses related