delivering on 
our promises
annual report 2012 
wwwpolymetalinternationalcom overview 
contents
delivering on 
our promises
we set ourselves demanding targets 
and have a consistent record of 
achieving them throughout this 
year we have continued to deliver 
on these targets and this report  
illustrates our commitment to 
strategy business model and the 
culture of excellence throughout  
our operations
what we said
in our last annual report our focus for the future was 
speciﬁcally about operational excellence and effectiveness 
a commitment to our strategic objectives building a 
responsible business upholding the highest governance 
standards and a continuing dedication to the support  
and motivation of our workforce
a conversation  
with the chief executive
in this section we hear from our  
chief executive vitaly nesis regarding  
his views and our strategy relating to the 
issues and activities that we are asked  
about most often
business model
our business model remains at the heart  
of our ability to maintain competitive 
advantage and consequently to deliver 
sustainable value here we discuss in more 
detail how our business model continues  
to drive our performance
corporate responsibility
as always building a responsible business 
continues to be at the core of our thinking 
and this section details our approach  
and achievements
delivering on  
our promises
we report on the progress that we’ve  
made and describe how this forms part  
of our ongoing development in the context  
of our longerterm growth strategy
see more on pages 1415
14
see more on pages 8087
80
see more on pages 1213
12
see more on page 1821
18
delivering
sustainable
value
maintaining exemplary governance
maintaining exemplary governance
focusing on highgrade assets
investing in exploration   
leveraging our hubbased system
polymetal has a simple objective –  
to deliver sustainable value to all  
our stakeholders 
our aim is to become the leading 
precious metals mining group in  
russia and the cis beneﬁting  
from our competitive advantages –  
strong track record capital discipline 
and high quality assets
our approach is underpinned by  
a commitment to high standards  
of corporate governance  
corporate responsibility and 
sustainable development
overview
2 polymetal at a glance
4 performance highlights
6 where we operate
business review
8 chairman’s statement
10 chief executive’s review
12 chief executive’s qa
14 business model
16 strategy update
18 delivering on our promises
22 operating review 
 22 overview
 28 dukat hub
 32 omolon hub
 36 amursk pox hub
 40 albazino
 44 mayskoye
 48 khakanja
 52 voro
 56 varvara
 60 standalone exploration projects
62 financial review
76 risks and risk management
80 sustainability
governance
88 board of directors
89 senior management
90 corporate governance
95 audit and risk committee report
99 directors’ report
102 remuneration report
financial statements
110 statement of directors’ responsibilities
111 independent auditor’s report
112 consolidated income statement
112  consolidated statement of comprehensive income
113 consolidated balance sheet
114 consolidated statement of cash ﬂows
115  consolidated statement of changes in equity
116  notes to the consolidated ﬁnancial statements
appendices
160 reserves and resources
166 glossary
168 shareholder information
annual report 2012 polymetal international plc 1
overview anadyr
moscow 

st petersburg
china
japan
kostanay 
khabarovsk 
magadan  finland
ukraine
belarus
lithuania
latvia
estonia
georgia
 ekaterinburg
russia 
kazakhstan
overview 
polymetal at a glance
a year of robust progress
 polymetal demonstrated strong operational 
performance throughout the year total gold 
equivalent production of 1063 koz was up 31 
compared to 2011 exceeding the original projection 
of 1 moz this reﬂects stable operations at all  
of our mature mines with a notable improvement  
at dukat and growth at omolon and albazino 
 metal sales for the full year exceeded production  
for both gold and silver
 the amursk pox the ﬁrst operating pox plant  
in russia’s gold industry has been slower than 
planned to come online but the rampup is 
progressing and we expect it to reach full  
capacity by the end of 2013 
 there has been a dramatic increase of the resource 
base at albazino and potential new growth assets 
have been identiﬁed through successful exploration 
at kutyn and svetloye
 we have implemented a new dividend policy  
raising the payout ratio to 30 and introducing 
special dividends the ﬁrst special dividend in the 
company’s history of us050 per share was  
paid in january 2013 a ﬁnal dividend for 2012  
of us031 per share is proposed 
production key achievements
locations
russia  
magadan region  
sverdlovsk region  
khabarovsk territory 
chukotka autonomous territory
kazakhstan  
kostanay region
key ﬁnancial ﬁgures
1854
sales revenue us million 
2011 us1326 million 
703
total cash cost  
usge oz
2
  
2011 us701ge oz
1063 koz
of gold equivalent 
2011 810 koz
31
increase of gold equivalent  
production on 2011
revenue structure 
reserves and resources
3
gold equivalent
our portfolio
as at 31 december 2012
6
mining operations
dukat hub 
albazinoamurskmayskoye pox hub 
omolon hub 
voro standalone mine 
varvara standalone mine 
khakanja hub
54
licences
10722
total licence area km
2

15 1 moz
ore reserves ge oz
18 7 moz
mineral resources ge oz
3933
average reserveresource grade  
ge gt
1
  the company deﬁnes adjusted ebitda a nonifrs 
measure as proﬁt for the period adjusted for 
depreciation expense rehabilitation expenses 
writedown of inventory to net realisable value 
sharebased compensation listing expenses 
additional mining tax penalties and accrued  
interest income on disposal of subsidiaries bargain 
purchase gain foreign exchange gainloss change 
in fair value of derivatives change in fair value of 
contingent consideration ﬁnance income ﬁnance 
costs and income tax expense adjusted ebitda 
margin is adjusted ebitda divided by revenue  
see note 6 to the ﬁnancial statements 
2
  total cash costs comprise cost of sales of the 
operating assets adjusted for depreciation expense 
rehabilitation expenses and writedown of inventory 
to net realisable value and general administrative 
and selling expenses of the operating assets  
gold equivalent sales volume is calculated based on 
average realised metal prices in the relevant period 
total cash cost per gold equivalent ounce sold is 
calculated as total cash costs divided by total gold 
equivalent unit ounces sold
3
  mineral resources and ore reserves are estimated  
in accordance with the jorc code 2004  
mineral resources are additional to ore reserves
how we’ve delivered
our original objective for 2012 was to deliver  
10 moz of gold equivalent and we are  
naturally pleased to have exceeded this  
target since our operating activities remain  
on track we are conﬁdent that we will achieve 
production of 12 moz in 2013 and 14 moz of 
gold equivalent in 2014
how we’ve performed
we have demonstrated strong ﬁnancial performance for the year  
driven by excellent operational performance and tight cost and capital 
discipline we remain committed to delivering value to shareholders  
by proposing a ﬁnal dividend which combined with special dividends 
will result in sectorleading yield combined with solid growth proﬁle
918
adjusted ebitda
1
 –  
total us million  
2011 us624 million
401
proﬁt for the year  
us million  
2011 us290 million
copper
3
gold
55
silver
42
share price
20
40
60
80
100
120
140
oct
11
nov
11
dec
11
jan
12
feb
12
mar
12
apr
12
may
12
jun
12
jul
12
aug
12
sep
12
oct
12
nov
12
dec
12
performance versus ftse 100ftse gold mines 
 polymetal  ftse gold mines index  ftse 100
annual report 2012 polymetal international plc 3 2 polymetal international plc annual report 2012
overview overview 
performance highlights
sustaining strong  
performance  
  full rampup of the albazino concentrator
  commissioning of the merrillcrowe section  
at the kubaka plant omolon hub with hub 
reaching design capacity
  first gold poured at amursk pox plant  
rampup is continuing
financial highlights operational highlights
capital projects completed in 2012
2012 2011 2010
1854
1 326
925
revenue
usm
40
2012 2011 2010
918
624
425
adjusted ebitda
usm
47
2012 2011 2010
401
290
239
net income
usm
38
2012 2011 2010
12591
11002
747 4
ore mined
kt
14 
2012 2011 2010
9925
8821
7845
ore processed
kt
13
2012 2011 2010
1063
810
753
gold equivalent production 
koz
31 
2012 2011 2010
103
079
066
basic eps
usshare
30
2012 2011 2010
703 701
555
total cash cost
usge oz
0
2012 2011 2010
20
18
return on equity

2pp
20
139
195
260
free cash flow
us
139m
2012 2011 2010 2012 2011 2010
11
14
19
net debt
adjusted ebitda 
20
2012 2011 2010
44
38 38
average gold equivalent 
grade processed gt
1 5
2012 2011 2010
187
138 135
resources growth 
ge oz
35
2012 2011 2010
059
063
19
lost time injury 
frequency rate ltifr
6
2012 2011 2010
351
462
444
capital expenditure
1
usm
24
1
cash flow basis
2013 2012 2011
1
final dividend for 2012 proposed
031
1
070
000
dividends
usshare
2012 2011 2010
61
40 39
social investments 
usm
53
2012 2011 2010
18
20
19
ghg emissions 
co
2 
equivalent tonnes per 
10kt of ore mined
10
2012 2011 2010
46
47
62
total air emissions 
tonnes per 10kt of ore mined
2
annual report 2012 polymetal international plc 5 4 polymetal international plc annual report 2012
overview anadyr
moscow 

voro
mayskoye
amursk pox hub
varvara 
khakanja hub
dukat hub
amursk pox hub
omolon hub
st  petersburg
china
north 
korea
japan
 mongolia 
kostanay 
khabarovsk 
magadan 
uzbekistan
finland
ukraine
belarus
lithuania
latvia
estonia
georgia
armenia
azerbaijan
 ekaterinburg
albazino 
amursk pox hub
russia 
kazakhstan
china
high quality 
assets
overview 
where we operate
map key
hub
potential hub
operating mines
development projects
seaport
standalone mining 
operations
key exploration projects
head ofﬁce

citytown
voro
our ﬁrst mine at the peak  
of its performance
900
ktpa
hl
900
ktpa
cip
voro
south voro  
volchansky
khakanja hub
transforming one of our core assets 
into a genuine processing hub
600
ktpa
merrillcrowe plant 
khakanja avlayakan  
yurievskoye ozerny
dukat hub
our ﬂagship operation and russia’s 
largest primary silver mine
15
mtpa
dukat concentrator
300
ktpa
lunnoye cil plant
dukat goltsovoye  
lunnoye arylakh
olcha
krasin zvezdny  
kamenisty
omolon hub
delivering full potential of a 
processing hub concept
850
ktpa
kubaka cip and  
merrillcrowe plant
13
mtpa
birkachan hl plant
birkachan sopka tsokol
oroch dalneye prognoz
pyatinakh burgali
varvara
delivering stable operating 
performance in kazakhstan
42
mtpa
float  leach
varvara
varvara ﬂanks
amursk pox hub
the ﬁrst operating pressure  
oxidation plant in russia and  
the cis gold sector
225
ktpa
amursk pox plant 
processing concentrate 
from albazino and mayskoye
albazino mayskoye 
chukotka
albazino amursk pox hub
our newest operating mine with 
signiﬁcant further growth potential
15
mtpa
albazino concentrator
albazino south  
and east ﬂanks
mayskoye amursk pox hub
on track to launch in april 2013
850
ktpa
mayskoye concentrator
our assets
ge production
 157 koz
ge production
357 koz
ge production
 173 koz
ge production
 164 koz
ge production
77 koz
ge production
 134 koz
annual report 2012 polymetal international plc 7 6 polymetal international plc annual report 2012
overview business review 
chairman’s statement
and the active stewardship of risk management for the board 
to maximise its effectiveness it must ensure that the proper 
governance and strategy setting procedures are in place so 
that the company can maintain its ability to sustain ﬁnancial 
performance dividend ﬂow to shareholders and to generate 
value to all its stakeholders 
we remain committed to ensuring that the company is run  
in the best interests of all its stakeholders and that the board  
is accountable for responsible stewardship disciplined 
performance and sustainable value delivery
people
polymetal’s good performance this year is entirely due  
to the talent dedication and hard work of all our employees 
our strong prospects for future growth are equally dependant  
on their continuing commitment we are not only highly 
appreciative of the efforts of our employees at all levels  
but are also absolutely clear that the wellbeing of everyone 
associated with polymetal is of critical importance
 
maintaining focus  
on delivery
performance
we have consistently demonstrated strong operational 
performance throughout the year with total gold equivalent 
production 31 up on 2011 and 6 ahead of original 
expectations this excellent result was driven in particular by 
solid performance at our mature mines robust performance  
at dukat and successful rampups at omolon and albazino
while the completion of major projects and signiﬁcant resource 
expansion have both contributed signiﬁcantly to our success 
during the year and helped to develop a distinctive competitive 
proﬁle for polymetal we have also made progress against wider 
strategic objectives throughout the year we have announced 
several resource increases the most important being the 
twofold resource expansion at albazino as a result of our 
ongoing exploration efforts in december we announced the 
completion of the acquisition of the olcha goldsilver deposit 
and a greenﬁeld pgm project our ﬁrst platinum asset
on behalf of the board i am delighted 
to be reporting on a year of tremendous 
progress for polymetal in our ﬁrst full 
year as a premium listed company on 
the london stock exchange we have 
successfully delivered on our promises 
in terms of production performance 
governance and the generation  
of value for our stakeholders 
dividend
our dividend policy in 2012 has evolved in response to 
increased demand for dividend ﬂow from institutional investors 
across the world it also highlighted our ability to generate free 
cash ﬂow at the current stage of our development as a result 
a new dividend policy has been adopted by the board raising 
the regular dividend payout ratio to 30 of net earnings and 
introducing interim dividends and an annual consideration of  
a special dividend we ﬁrmly believe that the amended 
dividend policy will be signiﬁcantly more aligned with the 
interests of the company’s stakeholders and global trends  
in the sector reafﬁrming the company’s commitment  
to capital allocation discipline and value distribution while 
retaining ﬂexibility to invest in attractive projects
the board was delighted to declare in accordance with the 
new policy that having considered the performance of the 
group during the year to date available free cash ﬂows  
and future investment requirements a special dividend  
of us050 per ordinary share representing a total of 
approximately us191 million this was paid in january 2013 
in addition a ﬁnal dividend of us031 per share is proposed 
representing 30 of our net proﬁt for the year
the declaration of the ﬁrst special dividend in the company’s 
history and the increased regular payout reafﬁrm our 
commitment to capital discipline and is also a result  
of solid operating and ﬁnancial results of the group to date 
the implementation of our new dividend policy reﬂects the 
importance we place on delivering meaningful cash returns  
to our shareholders and sustainable value creation
the board and governance
governance is at the heart of our culture providing a 
framework within which we can maintain and develop the 
values and practices that support our corporate objectives 
and which ensure that polymetal reﬂects high levels of ethical 
and responsible behaviour
during our ﬁrst full year as a premium listed company on the 
london stock exchange we have worked hard to ensure that 
we reﬂect both the letter and the spirit of the uk corporate 
governance code our approach is designed to achieve  
a balance between encouraging positive commercial values 
and applying the appropriate disciplines where required 
we have been particularly focused on the code’s emphasis  
on the alignment of remuneration with shareholder interests  
the balance and effectiveness of the board and its composition 
bobby godsell
chairman of the 
board of directors
summary
  improved governance systems and practices
  experienced board
  talented people throughout the business
  new dividend policy
  strong outlook for sustainable value
board of directors and committees
member of the board  
of directors
bobby godsell
 
vitaly nesis
jonathan best
 marina grönberg
leonard homeniuk 
 russell skirrow 
 konstantin yanakov
jeanpascal duvieusart
charles balfour
 audit and risk committee 
 remuneration committee 
 nomination committee
 chairman  executive director  nonexecutive director
 independent nonexecutive director
effective leadership 
for more information on our 
corporate governance
see more on pages 88109
88
what we said
both prior to and following our listing 
our approach has been underpinned  
by a commitment to high standards  
of corporate governance corporate 
responsibility and sustainable 
development our undertaking is to 
deliver progressively more effective 
stewardship and accountability to all  
our stakeholders through an ongoing 
process of review and assessment
how we’ve performed
governance
what we did key achievements
 the alignment of remuneration  
with shareholder interests
new ltip proposed in line  
with uk best practice
 the balance and effectiveness  
of the board and its composition
board evaluation performed  
in 2012 
 the active stewardship of risk 
management
performed indepth review of key 
risks and management response 
outlook
the board is pleased to be able to report on such a  
successful year for polymetal we have delivered a very strong 
performance against the operational and strategic objectives 
that we set ourselves at the time of listing we continue to 
make strong progress on consistent longterm strategic aims 
in particular the development of a third generation of growth 
assets our focus continues to be ﬁrmly on delivering results 
and building sustainable value for the long term
bobby godsell
chairman
business review
annual report 2012 polymetal international plc 9 8 polymetal international plc annual report 2012 business review 
chief executive’s review
average grade processed and increased volumes and  
coupled with moderate russian rouble depreciation against 
the us dollar offset the combined impact of domestic inﬂation 
and adverse movement in goldsilver price ratio
in line with industry best practice we started to report allin 
cash costs which comprised us1047ge oz a 15 
decrease yearonyear driven mostly by reduction in capital 
expenditure at our operating mines and stable total cash costs
net earnings were us401 million up 39 and basic eps  
was us103 up 30 yearonyear driven by strong increase  
in adjusted ebitda the net earnings and eps were negatively 
affected by additional tax provisions booked in respect of prior 
years and 2012 in the amount of us 116 million which are  
not expected to be recurring the earnings growth resulted  
in improved returns on equity and capital employed reaching  
20 and 22 respectively
net operating cash ﬂow more than doubled to us496 million 
while capital expenditures declined 24 to us351 million 
resulting in total positive free cash ﬂow of us139 million
our balance sheet remains strong and liquidity proﬁle 
comfortable with the net debtadjusted ebitda ratio further 
reduced from 14 to 11 during 2012 with 59 of borrowings 
being longterm
following the successful performance during 2012 a ﬁnal 
dividend of us031 per share is proposed by the board  
in accordance with our new dividend policy reiterating  
our commitment to capital discipline and delivering value  
to our shareholders the cumulative dividend payout during  
the last twelve months including the payment of the ﬁrst  
special dividend puts us among the leaders in the sector  
in terms of dividend yield
employees and communities
as one of the largest employers and taxpayers in many areas 
of our operations with more than 9000 employees in russia 
and kazakhstan we are very conscious that our achievements 
are totally dependent on their commitment and dedication  
we have a clear focus on the wellbeing of all our staff and  
our health and safety procedures are subject to constant 
scrutiny assessment and development we continue to invest 
signiﬁcantly in all areas relating to safety systems procedures 
and equipment which naturally remain central to our culture 
and working practices 
a successful year  
of delivery and growth
2012 has proved to be a strong year 
with a solid set of operating results 
favourable market conditions 
signiﬁcant progress across our key 
investment projects and exploration 
targets and a continuing focus on 
safety and employee welfare 
robust production results
this year we achieved total gold equivalent production  
of 106 moz – 31 up on 2011 and 6 ahead of original 
forecasts representing our biggest annual increase in absolute 
numbers to date these excellent results were driven by stable 
performance at all mature mines with a notable improvement 
achieved at dukat and successful rampup at omolon and 
albazino our key growth projects
annual gold production increased to 589 koz up 33 
compared to 2011 driven principally by robust operating 
results at omolon and albazino both achieving or exceeding 
design capacity silver production was 265 moz – also up 
33 on 2011 – as a result of higher grades and recoveries  
at dukat successful processing of highgrade sopka  
ore at omolon and increased grades at khakanja
we have commissioned our ﬂagship amursk pox plant and 
poured ﬁrst gold in april 2012 as planned however while 
throughput reached expected levels in late november we 
experienced some operational issues during the rampup  
and have not yet achieved expected sustainable performance  
we are already implementing the necessary remedial 
measures and are expecting a gradual improvement 
throughout the year with full capacity being achieved by  
the fourth quarter of 2013 in the meantime we will be able  
to generate cash ﬂows by continuing concentrate sales  
to thirdparty offtakers
development and exploration
i am pleased to report that our development projects are well 
on track the commissioning of mayskoye our most remote 
and northerly mine is scheduled to take place in april 2013 
furthermore a substantial increase in the gold resource base  
at albazino to nearly 6 moz and successful exploration results 
at kutyn and svetloye indicate that we are in a strong position 
to make decisions on signiﬁcant new asset developments in the 
second half of 2013 and the beginning of 2014 these projects 
if undertaken will form a third generation of growth assets  
after reaching the target level of 14 moz of gold equivalent 
production on the current asset base which is expected  
in 2014
the inhouse exploration programme in 2012 and in the 
beginning of 2013 has been complemented by acquisition 
activity including acquisition of the olcha deposit which  
will be part of the dukat hub the svetlobor project our ﬁrst 
greenﬁeld project in platinum and most recently maminskoye 
a development stage asset in a perfect location with access  
to infrastructure both organic and inorganic growth projects 
are complementary with our business model with capital 
discipline and commitment to return on capital as the core 
criteria of value creation
strong ﬁnancial performance
we have achieved excellent ﬁnancial results for the year  
driven by robust operating performance and tight cost and 
capital discipline 
revenue increased by 40 to us1854 million compared  
to 2011 driven mostly by robust production growth resulting  
in a 33 increase in sales of gold equivalent ounces metal 
sales exceeded production for both gold and silver as a result  
of destockpiling of concentrate inventories at dukat
group total cash cost was us703ge oz and remained 
almost ﬂat compared to the 2011 level of us701ge oz  
as a result of intense management focus on cost control  
and despite external and inﬂationary cost pressures  
strong operating performance resulting in increased  
how we’ve performed 
production
1063
koz of gold equivalent 
31
increase on 2011 
i am very pleased to report that we experienced zero fatalities 
for a second year in a row and the lost time injury frequency 
rate has also decreased in 2012 by another 6 following 
major improvements in 2011 the tragic loss of the drycargo 
freighter amurskaya operated by a contractor of one of our 
subsidiaries which capsized in the sea of okhotsk in october 
2012 is a matter of lasting sadness and regret for everyone  
at polymetal we have already taken appropriate steps  
to rollout our safety and risk management procedures  
to our large supplier and contractor network
we have a long history of involvement and support for the 
communities in which we operate and which are in any  
way affected by our activities and operations we continue  
to be committed to playing a signiﬁcant role in the social  
and economic development of communities and indigenous 
populations and have an ongoing programme of investment 
and ﬁnancial support in terms of job creation the development 
of local and regional infrastructure health education culture 
welfare and sports 
looking ahead
we have a great deal to look forward to – the results for 2012 
and the strength of our development and exploration activities 
give a good indication as to our prospects for the future in the 
year ahead we will be fully focused on unlocking the potential 
of the amursk pox plant and the launch of mayskoye while 
continuing to work on the third generation of growth assets
we remain conﬁdent in our production guidance of 12 moz  
for 2013 and in our commitment to both cost and capital 
discipline while there are always risks associated with future 
prospects we ﬁrmly believe that we have the assets strategy 
and expertise to continue to build polymetal as a world class 
business and continue to deliver value to all our stakeholders
vitaly nesis
chief executive 
24 april 2013
what we said
our original production target for  
2012 was 10 moz of gold equivalent  
this represented a 23 increase over 
2011 compared to an 8 increase 
achieved in the period of 2011  
over 2010
what we did
 increase in production of gold 
equivalent of 31 to 1063 koz
 target further growth of 12 moz  
for 2013 and 14 moz for 2014
vitaly nesis
chief executive
business review
annual report 2012 polymetal international plc 11 10 polymetal international plc annual report 2012 business review 
chief executive’s qa
a conversation with  
the chief executive
q  what are the key challenges in 
respect of safety and responsible 
development – and how do you  
address them
while our inhouse safety performance was excellent –  
this was the second year in a row that we were able to  
record not only zero fatalities but also a continuing trend  
of reduced injury rates – we of course deeply regret the  
loss of one of our suppliers’ ships in the sea of okhotsk  
we are now taking measures to roll out our health and  
safety approach to our supplier network to address this risk  
in future our environmental and social performance remains 
fundamentally important to our sustainable growth and 
consequently a key area of focus for us we have made  
a positive impact in every region where we operate and 
continue to invest heavily in our environmental safety  
and social programmes
2010 2011 2012
059 063
19
lost time injury frequency rate ltifr
1
059
1
per one million hours worked
q  what are your key operational 
priorities for 2013
while we’re naturally focused on a complete range of 
operational activities we do have two signiﬁcant priorities – 
achieving our targets for operations at amursk pox and the 
completion and rampup of mayskoye these two objectives 
are prerequisite to achieving the 14 moz production target 
from our existing asset base in 2014 and to delivering on our 
estimate of 12 moz in 2013 we’re conﬁdent that both these 
priorities will be achieved during the coming year 
q  a production target of 14 moz 
seems now achievable – how do  
you see strategic development  
of the company beyond 2014
although we have yet to deliver the 14 moz we are already 
looking at the next generation of assets to ensure growth 
beyond 2014 there are key decisions to be made in respect  
of this third generation of assets including the expansion  
of albazino and development of the two most signiﬁcant 
greenﬁeld targets kutyn and svetloye albazino is the nearest 
target and represents an excellent example of our exploration 
success all three of these projects are subject to ongoing 
evaluation and the relevant development decisions will be 
made by the end of 2013 – beginning of 2014
q  how has the company changed 
since moving to london’s  
main market
while we continue to go from strength to strength operationally 
a key area of development has been the compliance with wider 
international standards of corporate governance clearly there 
is a far greater amount of attention on polymetal from a far 
greater range of stakeholders commentators and press 
regarding the company’s performance as well as more  
focus on governance and sustainability from an expanded  
and more demanding investor base we are therefore 
continuing to focus strongly on governance transparency  
and stakeholder relations in general though we are proud  
of our record of delivering on our promises as this has  
enabled us to outperform both the market and our peer  
group in terms of total shareholder return and to deliver  
real value to our shareholders
q  what would you describe as  
your main achievements and main 
disappointments during the year
i’m pleased that our achievements have strongly outweighed 
any disappointments so that while amursk pox – despite 
achieving its rampup and initial production targets – did not 
deliver fully on target the company as a whole achieved an 
impressive 31 growth in production the delay in full rampup 
of the amursk pox does not undermine our conﬁdence for the 
future and this conﬁdence is further boosted by the great 
progress we have made in other areas such as the success  
of our growth projects at omolon and albazino and signiﬁcant 
exploration success at both brownﬁeld and greenﬁeld projects
ma activity was limited although a number of relatively small 
acquisitions may offer additional expansion opportunities – in 
particular the new platinum project and the olcha brownﬁeld 
expansion at dukat
“ we are proud of our record of delivering  
on our promises as this has enabled us  
to outperform both the market and our 
peer group in terms of total shareholder  
return and to deliver real value to  
our shareholders”
 
 vitaly nesis
 chief executive
q  how are these achievements and 
areas for further focus impacting  
on your ﬁnancial performance
the fact that we achieved production growth ahead of 
expectations along with our stable performance at mature 
mines meant that we also delivered improved cost efﬁciency 
and proﬁtability levels including adjusted ebitda growth of 
47 and stable total cash costs in addition the completion of 
some major growth projects combined with a strong operating 
cash ﬂow resulted in free cash ﬂow generation a comfortable 
level of debt and solid proﬁtability importantly this also 
enabled us to implement our industryleading dividend policy 
with a sizeable us050 per share special dividend
left operations at the voro open pit
top right regular equipment checks at the khakanja plant
bottom right the area adjacent to our mayskoye site in chukotka
business review
annual report 2012 polymetal international plc 13 12 polymetal international plc annual report 2012 business review
business model polymetal’s business model
performing in line  
with our business model
success in our market depends to a large 
extent on our ability to increase our resource 
base continually develop systems that 
increase production efﬁciency and improve 
grades our business model has therefore 
been developed to ensure that we have the 
best methodology and approach to address 
these issues and ultimately to ensure that 
we continue to deliver sustainable value 
area of focus what we said what we are doing the future
focusing on  
highgrade assets 
22
read more about our assets on 2259
we have a preference for openpit 
mining unless higher grades justify 
underground development grades  
and mining conditions are the key cost 
factors that drive return on invested 
capital in the precious metals industry 
by setting appropriate thresholds  
on head grades and focusing on 
openpit mines we are achieving  
better returns and lower risks from  
our project portfolio
the newest mines which were ramped 
up andor are under construction –  
most importantly omolon hub albazino 
and mayskoye – are all characterised  
by high reserve and resource grades 
which reduces the project risk and 
ensures good cost levels despite 
complex logistics and weather 
conditions further grade control 
remains a top priority at our existing 
operations thus supporting intense 
management focus on cost control
our focus on grade is also embedded 
in our thresholds and targets set for 
assessing organic and inorganic growth 
opportunities in order to support 
company’s grade proﬁle going forward 
at the operational level we are 
continuing to implement various 
initiatives both at mine planning and 
processing level to ensure continuous 
grade and recovery improvements
leveraging our  
hubbased system
6
read more about our hubs on pages 6 2851
creation of centralised facilities for the 
treatment of materials from different 
sources allows us to minimise 
processing and logistics costs and 
achieve economies of scale
omolon and khakanja are both good 
examples of asset transformation 
supported by the hub concept  
both demonstrate solid performance 
improvement in 2012 in terms of 
production growth and cost reduction 
driven by addition of highgrade ore 
sources from medium and smallsized 
satellite deposits
we are continuing to invest in 
brownﬁeld exploration and searching 
for synergistic ma targets which  
could extend the life of existing 
operations andor improve grade 
proﬁle with acquisition of olcha  
in 2013 being the latest example
investing in exploration
60
read more on pages 20 24 60
this will allow us to ensure a cost
effective increase in our reserve  
base which is in turn the key source  
of longterm organic growth
our exploration efforts in 2012 have 
resulted in meaningful growth in 
reserves and resources without 
compromising the grade new resource 
additions at albazino are the largest 
success of 2012
greenﬁeld and brownﬁeld exploration 
will continue to serve as the principal 
source of future growth assets some  
of which albazino expansion  
kutyn and svetloye have already  
been identiﬁed
maintaining exemplary 
governance
88
read more on page 88109
we strive to ensure proper steering  
of the company accountability to 
shareholders and attention to other 
stakeholders’ interests
good corporate governance and 
listening to our shareholders remains  
a top priority of polymetal board and 
executive management with key  
2012 developments including new 
progressive dividend policy and 
adopting best practices in executive 
remuneration health and safety  
as well as environmental and social 
performance are also embedded  
in the management’s kpis and  
remain an area of focus
going forward the board will 
continuously focus on compliance  
with uk best practice in corporate and 
on further improvement in health and 
safety record as well as on maintaining 
a robust system of internal control
delivering
sustainable
value
maintaining exemplary governance
maintaining exemplary governance
focusing on highgrade assets
investing in exploration   
leveraging our hubbased system
business philosophy
what we like and do
  high return on invested capital and meaningful dividends
  brownﬁeld projects based on the concept of  
processing hubs capital light simple predictable
  highgrade mediumsize projects
  synergydriven ma
what we don’t like and don’t do
  low return on capital even at low total cash costs  
and symbolic dividends
   greenﬁeld projects expensive complex risky
  very large lowgrade projects
 ma driven by desire to grow production
 delivering sustainable value 
three elements form the substance  
of our business model a focus  
on highgrade assets support  
and expansion of our hubbased 
operating system and investment  
in exploration – underpinned by a 
commitment to strong governance
business review
annual report 2012 polymetal international plc 15 14 polymetal international plc annual report 2012 business review 
strategy update
operating to a  
consistent strategy
how we’ve performed
strategy
what we said
our strategy to generate sustainable 
value for our stakeholders remains 
consistent with clearly deﬁned 
objectives – achieving production 
capacity investing in exploration 
pursuing acquisitions increasing 
proﬁtability reﬁning governance 
processes – and consequent targets 
key performance indicators and 
measurement processes
what we did in 2012 key achievements
 delivered strongly in overall terms 
against all our operating objectives and 
associated key performance indicators
gold equivalent production  
up 31
 progressed steadily in our  
exploration targets
meaningful reserve and 
resource growth through 
exploration 
 focused on cost control  
and efﬁciency
increased proﬁtability and  
cash ﬂow
strategy objective kpi 2012 performance
achieving design capacity at current growth projects
 achieve design capacity at projects currently in construction or rampup phase by the second half of 2013  
and achieve production level of 14 moz of gold equivalent ounces in 2014 assets in construction or rampup  
phase expected to generate production growth are the amursk pox and mayskoye concentrator
 achieve design capacity at all plants 
and targeted production volumes  
14 moz in 2014
 complete key capex projects
 gold equivalent produced koz
106331
 average gold equivalent grade 
processed gt
4415
 revenue us m
185440
 capital expenditure us m
35124
 major project milestones completed albazino – achieving design parameters
 omolon – achieving design  
parameters after commissioning  
the merrillcrowe section
 amursk – commissioned  
rampup underway
investment in exploration
nearmine
 investment in nearmine exploration with the aim of expanding the group’s reserve base and creating opportunities for 
production growth either through grade improvement or expansion of existing processing facilities assets targeted  
for this expansion are albazino khakanja and voro
greenﬁeld
 investment in greenﬁeld exploration with the aim of discovering highgrade quality assets for construction of  
new standalone mines 
 expand reserve and resource base 
with quality assets
 resource growth
35
 average resource grade ge
33 gt
 reserve growth 
6
 average reserve grade ge
39 gt
increasing proﬁtability cash ﬂow generation and dividend payout
deliver superior operating proﬁtability and strong free cash ﬂow by maintaining tight cost control focusing on return  
on capital in investment decisions and maintaining safe debt levels
 deliver superior operating proﬁtability
 total cash costge sold
7030
 free cash ﬂow
us139mpositive
 ebitda margin
503pp
 dividend payout ratio
79
pursuing synergistic valuedriven acquisitions
pursuit of selected synergistic ‘bolton’ or other valueaccretive acquisition opportunities with a view to leveraging processing 
capacity infrastructure and operational expertise at our existing processing hubs or transforming current standalone mines 
into new hubs
 transactions made or agreed 
during 2012
 acquisition of svetlobor – greenﬁeld 
pgm project
 acquisition of olcha – bolton to 
lunnoye completed in january 2013
reﬁning corporate governance and social responsibility
maintain high standards of corporate governance strictly adhering to the principles of sustainable development in our 
interaction with all stakeholders in our operations including communities employees and government bodies we are 
compliant with the majority of provisions of the uk corporate governance code made by the board to ensure full  
compliance from june 2013 the group is also a participant in the un global compact a recognised international  
standard for sustainable development
 maintain high standards of corporate 
governance and sustainable 
development
 compliance with uk  
corporate governance code
  refer to page 91 detailing how  
we have complied
 ltifr
0596
 social and community investments 
us
6m50
 ghg emissions 
tonnes per 10kt ore mined
1810
business review
annual report 2012 polymetal international plc 17 16 polymetal international plc annual report 2012 business review
delivering on our promises the polymetal hub structure
standalone mining 
operations
hub
key exploration 
projects
amursk
russia’s ﬁrst operating pressure 
oxidation plant
omolon
an excellent performance reﬂecting 
the successful implementation  
of our hub concept
efﬁcient processing model
our strategy of creating centralised processing 
facilities to treat ores and concentrates from 
surrounding sources enables us to run 
operations that are characterised by efﬁciency 
and capital and cost effectiveness we have 
further developed this system during the year 
and by the end of 2014 we expect our amursk 
omolon dukat and khakanja hubs to be 
producing up to 80 of the group’s total output
driving hub development 
and production growth
production
this has been a very rewarding  
year in terms of production results 
with total gold equivalent production  
of 106 moz – 31 up on 2011 
representing our best ever  
annual increase
achievements
this excellent result was driven by strong allround 
performance with a notable improvement at dukat and 
successful rampup at omolon and albazino our key growth 
projects annual gold production increased to 589 koz up 
33 compared to 2011 silver production was 265 moz –  
also up 33 on 2011 – as a result of higher grades and 
recoveries at dukat successful processing of highgrade 
sopka ore at omolon and increased grades at khakanja
2010 2011 2012
1063
810
753
the group’s gold equivalent production kt
31
we commissioned our ﬂagship amursk plant and poured  
our ﬁrst gold in april 2012 as planned while throughput did 
reach expected levels in late november we then experienced 
some operational issues which have meant that we have not 
yet achieved expected levels of sustainable performance  
however we have already implemented the necessary  
remedial measures and are expecting recovery throughout  
the year with full capacity being achieved by the fourth quarter 
of 2013 in the meantime we will be able to generate cash 
ﬂows by continuing concentrate sales to thirdparty offtakers
what we said
our original annual gold equivalent production estimate  
of 1 moz for 2012 was increased during the year to  
105 moz and although we had set ourselves some  
typically stretching targets we ﬁnished the year delighted  
with the outcome
what we did
 achieved an increase of 14 in ore mined to 12591 kt
 achieved actual gold equivalent production for the year  
of 1063 moz a 31 increase compared to 2011
production highlights included
dukat
increased grade proﬁle expansion of mining  
at goltsovoye and improved recovery levels  
at the main omsukchan concentrator 
albazinoamursk hub
the albazino mine and concentrator reaching design 
capacity start of commercial production at amursk  
combined with continued concentrate sales  
to thirdparty offtakers  
omolon
dramatic increase in capacity at the kubaka plant  
higher than planned amounts of ore transported  
from sopka 
khakanja
grade proﬁle increase generating 28  
production growth  
processing 
plants
the 46 increase in volume of ore processed and 114 
growth in gold is a tremendous turnaround story from  
a previously underperforming asset with production  
of 173 koz of gold equivalent after transportation  
of highgrade ore from sopka and the commissioning  
of the merrillcrowe circuit at the refurbished kubaka plant
2010 2011 2012
173
46
19
omolon’s gold equivalent production kt
279
the amursk plant is one of our key projects and one which  
will give us a signiﬁcant competitive advantage both nationally 
and in the global gold industry the pressure oxidation 
technology opens up opportunities for polymetal in terms  
of efﬁcient and cost effective processing of refractory gold 
deposits in russia and the cis
gold equivalent production by mine koz 
357
164
157
134
173
77
 dukat
 khakanja
 voro
 varvara
 omolon
 albazinoamursk
business review
annual report 2012 polymetal international plc 19 18 polymetal international plc annual report 2012 business review 
delivering on our promises
  dividend policy clearly aligned with stakeholders’ 
interests and global trends in the sector
  reafﬁrmation of the company’s commitment to 
disciplined capital allocation and value distribution
  retained ﬂexibility to invest in attractive exploration 
projects and acquisition opportunities
  clear reﬂection of our competitive positioning  
in relation to international peers
exploration
the substantial increase in the  
gold resource base at albazino  
and successful exploration results  
at kutyn and svetloye put us in a 
strong position to make decisions on 
signiﬁcant new asset developments  
in the second half of 2013early 2014 
these assets will most likely form the 
core of the third generation of growth 
assets after reaching our 2014 target 
of 14 moz of gold equivalent
resource increase in 2012
49 moz 
of gold equivalent 35
dividends
our dividend policy in 2012 evolved  
in response to increased demand  
for dividend ﬂow from institutional 
investors across the world it also 
highlighted our ability to generate 
meaningful free cash ﬂow at the 
current stage of our development
strong results from  
our exploration activities
committed to capital  
discipline and a progressive 
dividend policy
what we said
at the time of our listing we adopted a new dividend policy  
to reﬂect our commitment to meet shareholder expectations  
in an environment characterised on the one hand by high 
commodity prices and tight ﬁnancial markets on the other  
a dividend of us020 per share was proposed along with  
the intention to pay annual dividends of 20 of net income 
provided that net debtadjusted ebitda ratio is less  
than 175
greenﬁeld exploration
investment in greenﬁeld exploration remains a key objective  
for us our target standalone mines need to meet the stringent 
criteria that drive the cost efﬁciencies and a strong return on 
capital invested these criteria include high grade preference 
for openpit mining potential operational synergies with 
existing assets and most importantly new projects will need  
to exceed our minimum hurdle rates in terms of internal rate  
of return which are set based on the complexity and risk level 
of a particular project
greenﬁeld exploration efforts for new precious metals  
deposits are set to form the next generation of our growth 
assets and contribute to our longerterm growth prospects 
the exploration expertise is therefore crucial for the  
longterm strategic development of the company
key exploration results in 2012
albazino
the exploration results at albazino highlight the tremendous 
potential of this asset and are an excellent example of
polymetal’s ability to create value by discovering highgrade 
resources close to existing processing facilities
khakanja dukat omolon varvara and voro
ongoing brownﬁeld exploration activities aimed at extension  
of lifeofmine of our existing operations at varvara signiﬁcant 
resource and reserve additions were achieved as a result  
of inﬁll and stepout drilling 
svetloye 
metallurgical test work to determine viability of heap leaching  
is continuing with a reserve estimate for the bulk heap leach 
processing option targeted for the fourth quarter of 2013
kutyn
increased mineralised potential by 06 moz of gold contained 
tamunier
an initial jorc resource estimate prepared for the deposit  
of 50 mt at 12 gt gold
elmus
additional ore zone discoveries
what we did – key achievements
raised payout ratio to 30 compared to the initial 
target of 20 and introduced interim dividends
introduced annual board consideration of a special 
dividend and paid us050 per share in special 
dividends in january 2013
demonstrated the importance we place on delivering 
meaningful cash returns to our shareholders and  
sustainable value creation 
polymetal’s performance versus ftse 100ftse gold mines 
 polymetal  ftse gold mines index  ftse 100
oct 11 nov 11 dec 11 jan 12 feb 12 mar 12 apr 12 may 12 jun 12 jul 12 aug 12 sep 12 oct 12 nov 12 dec 12
20
40
60
80
100
120
140
business review
annual report 2012 polymetal international plc 21 20 polymetal international plc annual report 2012 delivering on our promises 
across our operations
production highlights
2012 2011
 
change
stripping kt 85173 80683 6
underground development metres 46717 35150 33
ore mined kt 12591 11002 14
– openpit 10937 9636 14
– underground 1654 1366 21
metal in ore mined ge grade gt 41 38 10
ore processed kt 9925 8821 13
metal in ore processed  
ge grade gt 44 38 15
production
– gold koz 589 443 33
– silver moz 265 199 33
– copper kt 6567 6915 5
gold equivalent production koz
1
1063 810 31
sales
– gold koz 593 448 32
– silver moz 28 17 63
– copper kt 7011 6363 10
gold equivalent sales koz
1
1092 764 43
health and safety
2
ltifr 059 063 6
fifr 000 000 na
notes
1
 based on 160 agau and 51 cuau conversion ratio
2
 ltifr  lost time injury frequency rate fifr  fatal injury frequency rate
analysis of production results 
mining 
stripping volumes in 2012 grew by 6 while underground 
development increased by 33 to 467 thousand metres 
mainly due to our dukat hub where ore is increasingly sourced 
from underground ore mined was 12591 kt a 14 increase 
over 2011 level the bulk of ore mined 87 is sourced from 
openpit the key contributors of growth in ore mined were 
khakanja due to intensiﬁed mining at pit 3 and completion of 
underground mining at yurievskoye and omolon full capacity 
achieved at sopka and commencement of mining at tsokol 
further complemented by a 45 increase in ore mined at 
albazino as the mine achieved full capacity
the average gold equivalent grade in ore mined was 41 gt 
increasing by 10 over the 2011 level of 38 gt the solid 
increase in grade proﬁle was driven mainly by increased share 
2012 became a year of solid operating 
results with reliable delivery on 
increased production guidance revised 
upwards by 5 during the year and 
successful rampup of new mines 
this robust operating performance 
was further supported by a substantial 
increase in resource base paving the 
way for development decisions on the 
third generation of growth assets
total gold equivalent production of 1063 koz was up 31 
compared to 2011 and exceeded the original guidance  
of 1 moz by 6 these excellent results were driven by  
stable performance at all our mature mines with a notable 
improvement achieved at dukat and successful rampup  
at omolon and albazino
the strong operating results were combined with considerable 
exploration success a dramatic increase of resource base at 
albazino to nearly 6 moz of gold and successful exploration 
results at kutyn and svetloye as a result the company is 
steadily approaching development decisions on new asset 
development in the second half of 2013 – beginning of 2014 
these are set to build up the ‘third generation’ of growth 
assets ensuring growth beyond 2014
delivering on production and sales targets
annual gold production was 589 koz up 33 yearonyear 
driven mainly by successful rampup at omolon and albazino 
annual silver production was 265 moz up 33 yearonyear 
as a result of higher grades and recoveries at dukat 
successful processing of highgrade sopka ore at omolon 
and increased silver grades at khakanja
importantly metal sales for the full year exceeded production 
both for gold and silver this was achieved by expected 
destockpiling of concentrate and reﬁned metals inventories 
– most importantly at dukat and omolon – accumulated  
in the ﬁrst six months of the year and contributed to stronger 
operating cash ﬂows
delivering on key capital projects
we have made solid progress across our key construction 
projects although some of them did not progress fully  
in line with our expectations with a threemonth delay in 
commissioning at mayskoye and issues arising during the 
rampup of the amursk pox plant however these issues  
did not have a material effect on our 2012 results and 2013 
production targets both amursk and mayskoye are now the 
key focus of 2013 for our management team with deﬁned 
action plans in place
in 2012 the key achievements across our growth projects 
included
 the albazino mine and concentrator reached design 
throughput and recovery from the second quarter  
of the year
 the refurbished processing plant at omolon with  
merrillcrowe section performed fully in line with 
expectations processing more than 300 kt of high gold  
and silver grade ore from satellite sopka deposit
 the majority of construction works were completed at the 
mayskoye concentrator currently construction is on track  
for the revised startup deadline in april 2013 with the  
only remaining works including installation of electrical 
controlling and auxiliary equipment
of ore mined at omolon and albazino our new higher grade 
mines combined with increased average grades at these 
operations by 13 and 27 respectively importantly  
average grades were also supported by a stable grade  
proﬁle at dukat while ore mined grew 8 yearonyear
processing 
ore processed was up 13 in 2012 and reached 9925 kt 
this solid increase was mainly driven by full rampup of 
processing facilities at albazino reaching design throughput 
and recovery in the ﬁrst half of the year resulting in a twofold 
increase and commencement of processing of ore from 
sopka at the newly commissioned merrillcrowe section  
of kubaka plant omolon hub our mature mines 
demonstrated stable performance at their nameplate  
capacity or slightly above 
as expected average gold equivalent grade in ore processed 
grew by 15 to 44 gt slightly above our average reserve 
grade of 39 gt as the growth in processing volumes came 
mainly from our new highgrade mines – omolon with 
processing highgrade ore from sopka average grade 
processed grew almost threefold yearonyear and albazino 
contributing 12 of total ore processed by the group in 2012 
up from 7 in 2011 at khakanja there was an increase in 
average silver grade due to processing of highergrade ores 
from khakanja’s pit 3 and avlayakan
production 
our original annual gold equivalent production guidance  
of 1 moz for 2012 was subsequently increased to 105 moz  
by the end of the third quarter on the back of the strong 
operating results achieved actual gold equivalent production 
for the year was 1063 moz a 31 increase compared  
to 2011 and exceeded the elevated guidance
major contributions to production growth were attributable  
to four operations 
 dukat – with the increased grade proﬁle due to 
implementation of new underground mining methods 
expansion of mining at goltsovoye and sustainably 
improved recovery levels at the main omsukchan 
concentrator
 albazinoamursk hub – as a result of the albazino mine 
and concentrator reaching design throughput and recoveries 
by the second quarter of the year and commencement  
of commercial production at the amursk pox combined 
with continued concentrate sales to thirdparty offtakers
business review
annual report 2012 polymetal international plc 23 22 polymetal international plc annual report 2012
business review 
operating review key 2012 exploration statistics
unit 2012 2011
 
change
exploration works
core drilling km 1294 1297 0
trenching th m
3
1850 187 0 1
underground development 
for exploration purposes m
sampling
 geochemical sampling th assays 722 530 36
 trench sampling th assays 135 116 16
 core sampling th assays 1020 719 42
geophysical research  
area covered km
2
104 75 38
licences held
exploration licences pcs 43 39 10
area covered km
2
10503 9664 9
the key highlight of our exploration activities in 2012 was  
a signiﬁcant resource expansion at albazino see page 44  
the updated resource estimate will be further converted  
to reserves in 2014 with an objective to produce a feasibility 
study for the expansion at albazino and take construction 
decisions in the ﬁrst half of 2014
in addition we have increased mineralised potential internal 
nonjorc estimate inclusive of resources at some of our 
greenﬁeld targets notably kutyn 06 moz of gold contained 
we have also made solid progress at the other greenﬁeld 
targets locating additional ore intercepts at svetloye and elmus
at the operating mines further progress was made at
 ozerny khakanja hub – mining started in q4 2012 
resources converted to reserves
 avlayakan khakanja hub – while trial openpit mining 
continued additional inﬁll drilling was performed in 
preparation for underground mining resource to reserve 
conversion achieved
 varvara – signiﬁcant resource and reserve additions 
achieved as a result of inﬁll and stepout drilling and
 burgali and prognoz omolon hub – additional drilling  
results received and ongoing preparation for resource 
estimates for these potential additional ore sources  
for the kubaka plant is underway
 omolon – as originally planned the amount of ore 
processed at the kubaka plant increased dramatically  
due to processing of highgrade ore from sopka at the  
newly commissioned merrillcrowe section the amount  
of ore transported from sopka by winter road was higher 
than planned as a result some ore trucking and  
processing was shifted from 2013 to 2012
 at khakanja growth of 28 has been achieved due  
to increased grade proﬁle
 voro and varvara demonstrated stable performance  
in terms of grades and recoveries
production dynamics on a quarterly basis are represented  
on the graph below the seasonal ore transportation at 
omolon trucking of ore from sopka by winter road in the ﬁrst 
quarter processing in the second and third quarter as well  
as seasonal heap leaching operation at voro contributed to  
a stronger production proﬁle in the second and third quarters 
of the year such seasonality is expected to continue in 2013  
in 2014 after full rampup of the mayskoye concentrator and 
commissioning of an allyearround heap leaching facility at 
birkachan the seasonal ﬂuctuations are set to reduce
quarterly production data koz 
 gold  silver  copper
q1
2011
82
54
9
145
q2
2011
102
83
9
194
q3
2011
124
88
9
221
q4
2011
136
106
8
250
q1
2012
101
94
8
203
q2
2012
154
135
8
298
q3
2012
196
113
9
317
q4
2012
137
99
8
244
gold equivalent production by mine koz
2012 2011
  
change
dukat 357 319 12
khakanja 164 128 28
voro 157 160 2
varvara 134 127 6
omolon 173 46 279
albazinoamursk 77 30 160
total production 1063 810 31
metal sales in 2012 were 1092 koz of gold equivalent 
representing an impressive 43 increase over 2011
in 2012 the company continued sales of concentrates  
from dukat goldsilver varvara goldcopper and albazino 
refractory gold to offtakers in kazakhstan and china  
for dukat and varvara the offtake allows us to maximise 
margins compared to inhouse processing of these materials 
sales of concentrates to third party offtakers will continue in 
2013 while the company will seek to diversify offtaker base  
in order to achieve an optimal combination of transportation 
costs and treatment chargesrecoveries
for albazino sales to offtakers in china allow us to receive 
immediate cashﬂows and avoid building excessive stockpiles 
while the amursk pox plant is undergoing the rampup 
process in 2012 a total of 635 koz of payable gold was sold 
to chinese offtakers and we are currently considering the 
option to continue sales of albazino concentrate to thirdparty 
offtakers for 2013 until the pox plant reaches its full capacity
exploration 
we are conducting exploration works in four regions of  
russia – khabarovsk magadan karelia and sverdlovsk –  
as well as in kazakhstan polymetal currently has 54 licences 
for geological studies exploration and gold silver and copper 
mining and one coal mining licence our current exploration 
portfolio includes 43 licences with a total area of approximately 
10503 km
2

exploration activities in 2012 were concentrated on 31 licensed 
areas of which seven are at an advanced stage
key exploration objectives for 2012 were 
 ongoing brownﬁeld exploration activities aimed at extending 
mine lives at our existing operations khakanja with the 
shortest current lifeofmine dukat omolon varvara  
and voro 
 continued exploration activities at albazino with a view to 
considerably expanding the resource base as suggested  
by earlier exploration results and
 greenﬁeld exploration for new precious metals deposits  
with a potential resource base which would be sufﬁcient  
in grade and size to justify construction of a standalone  
mine such targets are set to form the next generation  
of our growth assets and ensure the company’s longterm  
growth prospects
reserves and resources
2012 2011
2012 
2011 
ore reserves ge moz 151 143 6
– gold moz 96 92 5
– silver moz 3076 2970 4
– copper kt 829 434 91
average reserve grade ge gt 39 42 6
mineral resources ge moz 187 138 35
– gold moz 149 104 43
– silver moz 1461 1811 19
– copper kt 2814 740 280
average resource grade ge gt 33 39 16
in 2012 we have achieved meaningful increases both in ore 
reserves and mineral resources ore reserves grew by 6 to 
151 moz of gold equivalent more than offsetting the depletion 
at our operating mines the key additions were the resource
toreserve conversions at tsokol and dalneye omolon hub  
and avlayakan and ozerny khakanja hub adding a total of 
08 moz of gold and 87 moz of silver as well as goltsovoye 
dukat hub where following an external audit we have 
converted a total of 201 moz of silver to reserves at varvara 
copper ore reserves nearly doubled to 83 kt and gold reserves 
increased by 39 to 12 moz as a result of additional inﬁll  
and stepout drilling performed at the ﬂanks of the deposit
more importantly our resource base grew 35 during the year 
in gold equivalent terms the major contributor of growth in 
gold resources was the doubling of the resource base at 
albazino  31 moz reaching a total of 57 moz inclusive of 
reserves marking an important exploration success for the 
company in addition an initial resource estimate was made 
and audited for tamunier our greenﬁeld exploration property  
in the urals resulting in resource addition of 15 moz of gold 
the decrease in silver resources is mainly attributable  
to resourcetoreserve conversions at goltsovoye  
tsokol ozerny and avlayakan see above reevaluation  
of resources at varvara resulted in a fourfold increase  
in copper resources to 281 kt in addition to a 10 moz  
increase in gold mineral resources
delivering on our promises 
across our operations
continued
movement in gold equivalent ore reserves koz 
ore reserves 
at 01012012
depletion revision new
discoveries
ore reserves 
at 31122012
14326
1272 763
1321
15138
business review
annual report 2012 polymetal international plc 25 24 polymetal international plc annual report 2012
business review 
operating review the year ahead
in 2013 our team will be fully focused on achieving our 
production guidance of 12 moz of gold equivalent most 
importantly by achieving full rampup of the amursk pox plant 
and timely commissioning and rampup of the mayskoye 
concentrator by completing these two complex projects we 
will ensure that the second generation of growth assets fully 
achieves design capacity allowing us to reach the strategic 
level of 14 moz annual gold equivalent production in 2014 
subsequently we will be increasingly focused on growth 
opportunities beyond 2014 representing a new third 
generation of growth assets 
operations
we are aiming to produce approximately 12 moz of gold 
equivalent in 2013 including approximately 760800 koz  
of gold and approximately 2324 moz of silver and 56 kt  
of copper growth will be mostly achieved in gold which  
in 2013 will represent approximately 65 of the total gold 
equivalent production
the key growth contributions will be coming from albazino 
which is to deliver full year of production at design capacity 
combined with rampup of the amursk pox to secure our 
production proﬁle in 2013 we will additionally consider sales  
of albazino concentrate to thirdparty offtakers in order  
to avoid excessive buildup of concentrate inventories  
during the rampup process of the pox plant 
another important milestone will be the commissioning and 
start of commercial production at mayskoye which is 
scheduled for april 2013 the concentrate produced in the 
second and third quarters will then be shipped to the amursk 
pox for processing andor to potential offtakers – an option 
which we would welcome in the light of potential expansion  
at albazino
by 2014 the existing portfolio of assets – including albazino 
and mayskoye – should achieve full capacity with annual gold 
equivalent production reaching at 14 moz
another area of focus in 2013 will be the progress on 
development decisions for the third generation of growth 
assets including potential expansion at albazino and 
development of kutyn svetloye and maminskoye projects 
these decisions will be based on reserve estimates and 
feasibility studies which are expected to be completed  
in the second half of 2013
in pursuit of synergistic ma
growth through synergistic valuedriven ma is an important 
part of our strategy while there were no large or mediumsized 
transactions during the year we continued to closely monitor 
the market and made a number of smaller transactions which 
meet our stringent acquisition criteria
acquisition of svetlobor platinum exploration project
in december 2012 we acquired a 25 interest in the svetlobor 
project a greenﬁeld platinum deposit with another 75  
to be acquired upon receipt of regulatory approvals the 
transaction was settled in polymetal share valuing the project 
at approximately us10 million the acquisition of svetlobor 
represents our ﬁrst acquisition in pgms platinum group 
metals driven by combination of outstanding exploration 
potential and the expected platinum price upside on the back 
of recent labour disruptions and production cuts in south 
africa currently accounting for 73 of global supply
the svetlobor project is a hardrock source of the largest 
platinum alluvial deposit in the world located in a developed 
industrial region approximately 250 km north of ekaterinburg 
urals polymetal has an established presence in the region 
which will allow us to leverage both its developed infrastructure 
and our own skill base there
we believe this earlystage exploration project has the potential 
to grow into a worldclass asset in terms of the size and quality 
of its mineral resource base potentially resulting in a very  
large low grade approximately 15 gt openpit operation with 
low stripping ratio and simple metallurgy we plan to publish  
a mineral resource estimate for the project under jorc 
guidelines in q4 of 2014
acquisition of olcha deposit completed in january 2013
in december 2012 we agreed to acquire the olcha goldsilver 
deposit for 775000 of the company’s ordinary shares valuing 
it at approximately us135 million the transaction was 
completed in january 2013
olcha represents a good opportunity to add another high
grade source of feed for the lunnoye plant with total resources 
currently estimated at 07 moz of gold equivalent in addition 
olcha is a natural extension of our portfolio of advanced 
exploration properties in the magadan region the mining  
and exploration licence covers an area of 25 km
2
 in the region 
and is located approximately 215 km from the  
lunnoye processing plant and 230 km from the kubaka 
processing plant part of the dukat and omolon processing 
hubs respectively
in line with polymetal’s strategy acquisition of olcha is 
expected to
 extend lifeofmine at lunnoye by processing highgrade  
ore from the new source 
 ensure effective use of openpit mining equipment and 
qualiﬁed personnel after the cessation of openpit mining  
at dukat and arylakh in 2013 and
 gain exploration upside within a substantially underexplored 
licence area
we plan to start openpit mining at olcha in q1 2014 and 
processing in q2 2014
acquisition of maminskoye completed in april 2013
subsequent to the yearend the company agreed to  
purchase the maminskoye project for a total consideration of 
us772 million mostly payable in shares maminskoye is a 
sizeable gold deposit which could potentially be quickly turned 
into a 23 mtpa heap leach operation yielding 80120 koz  
of gold production per annum the deposit is located in the 
welldeveloped sverdlovsk region urals which is familiar to 
the company and has excellent infrastructure and availability  
of qualiﬁed labour the transaction was completed in april 
2013 with the ﬁrst gold production scheduled for q2 2016  
the project enjoys easy openpit mining conditions and simple 
metallurgy allowing signiﬁcant optionality in development 
routes for polymetal and an excellent return on capital at a low 
level of risk
restructuring of interest in veduga project
in the ﬁrst half of 2012 we completed the restructuring of our 
interest in the veduga deposit in krasnoyarsk region previously 
held as a 5050 joint venture with anglogold ashanti 
anglogold ashanti has sold its share in the project and a new 
company polygon gold inc took over a 100 interest in the 
deposit polymetal currently holds a 43 stake in the new 
company polygon will operate as a standalone company with 
independent management while polymetal plans to provide 
certain technical and regulatory assistance to polygon on  
an ongoing basis the transaction has allowed us to ﬁnd  
a competent owner for this noncore asset that is prepared  
to take it into production
in terms of development of the existing asset portfolio and 
continuous improvement of our mining and processing 
facilities the priorities for 2013 are
 commencement of underground mining at arylakh  
dukat hub and avlayakan khakanja hub
 commencement of openpit mining at olcha dukat hub 
and dalneye omolon hub
 continued development of the complex logistics chains  
in the remote locations of our operations including 
development of the own barge ﬂeet and construction  
of winter roads thus ensuring reliability and safety  
of supply of ores and consumables
 continued implementation of best practices in health  
and safety risk management with rolling out the existing 
processes to our key suppliers and
 development of infrastructure at kutyn and svetloye  
for the extension of exploration activities there
exploration
in 2013 our exploration activities will be concentrated on
 continued resourcetoreserve conversions and resource 
category updates at our advanced standalone exploration 
targets and brownﬁeld targets through inﬁll drilling 
 additional drilling at the ﬂanks of ozerny and avlayakan with 
a view to extend lifeofmine at khakanja
 further increase of resource potential at albazino through 
additional underground development and drilling at olga 
zone inﬁll drilling at ekaterina1 and ekaterina2 zones and 
additional stepout drilling at the ﬂanks of the albazino ﬁeld
 completion of resource estimate at burgali and continued 
exploration at the other brownﬁeld targets in the omolon  
hub area
 inﬁll drilling and ﬁnalisation of resource estimates at olcha 
and preparation for openpit mining exploration for new ore 
bodies in the area 
 continued exploration at the two key greenﬁeld targets –  
kutyn and svetloye followed by resource estimates and 
preparation of oxidized ores for openpit 
 continued scoping and exploration at elmus and semchen 
areas in karelia with a view to developing a new standalone 
asset in the region and
 preparation of maminskoye resources for openpit mining 
and stepout drilling at the ﬂanks of the deposit
all of these activities are focused on delivering production 
growth beyond 2014 when we will have achieved our target 
level of production for the existing asset portfolio with a 
diversiﬁed set of targets at various stages of development 
some of them already approaching construction decisions  
in 2013 this growth already has a solid foundation
delivering on our promises 
across our operations
continued
business review
annual report 2012 polymetal international plc 27 26 polymetal international plc annual report 2012
business review
operating review  dukat
our ﬂagship operation and russia’s largest  
primary silver mine
russia magadan region
managing director mikhail egorov
employees 1965 
3rd
largest silver deposit in the world
despite being one of our mature 
assets dukat has demonstrated 
impressive results in 2012 gold 
equivalent production grew by 12 
and total cash cost reduced by 13 
yearonyear as a result of superior 
operating performance adjusted 
ebitda grew by 34 marking the 
increased volume and improved cost 
levels the operation has potential  
for further improvement through 
additional ore sources in the region 
such as recently acquired olcha 
and continuous implementation of 
best practices and new technologies 
in underground mining and 
processing methods
13
silver production in 2012 192 moz
272
silver reserves moz
34
adjusted ebitda growth  
20112012 
priorities for 2013
in 2013 development of our mining 
operations at dukat will be increasingly 
focused on the efﬁciency of our 
underground operations at our main 
dukat mine we will completely shift  
to underground mining with an 
automated ore trucking system 
expected to be commissioned in the 
second half of 2013 the system will 
allow fully automated ore underground 
transportation by rail allowing us to 
achieve a total 1500 ktpa capacity at  
the dukat mine in the medium term 
mining works will also develop at  
the vostochny part of the deposit  
at goltsovoye we expect signiﬁcant 
growth in ore mined following the 
completion of preparatory works and  
a change in mining method at arylakh 
along with the start of underground 
mining exploration of ore zone 9 will be 
performed at lunnoye mining works 
will continue at ore zone 7
in 2013 we plan to construct a winter 
road to access the newly acquired 
olcha deposit which will start to supply 
ore to the lunnoye plant from 2014 
openpit mining to start in q1 2014  
at the lunnoye processing plant 
operations will be focused on the 
automation of the processing facility  
and debottlenecking with a target to 
increase capacity to 400 ktpa in 2014
business review
28 polymetal international plc annual report 2012 annual report 2012 polymetal international plc 29
business review 
operating review business review 
operating review
2012 highlights processing plants
omsukchan concentrator
type flotationgravitation
capacity ktpa 1500
commencement of production year 2002
ore sources dukat goltsovoye
lunnoye processing plant
type cyanide leaching
and merrillcrowe
capacity ktpa 300
commencement of production year 2001
ore sources lunnoye arylakh
 olcha concentrate
 from omsukchan
 concentrator
dukat
continued
processing activity at dukat
ore transportation at lunnoye underground mining at the dukat plant
magadan
omsukchan 

1
2
4
5 6
3
lunnoye
dukat
    arylakh
    lunnoye
    perevalny 
    nachalny2
    dukat
    goltsovoye
1
2
3
4
5
6
processing plants
town 
mines
mining
our dukat hub currently has ﬁve ore sources with another 
three deposits in the exploration andor development stage  
in 2012 solid progress was achieved across the operating 
mines resulting in an 8 increase in total ore mined  
to 1782 kt and stable average silver grade mined  
of nearly 400 gt
at the main dukat mine openpit mining has been  
completed with further mining works from 2013 fully focused 
on underground mining underground development grew  
by an impressive 55 to 243 thousand metres in 2012  
the amount of ore mined was 1328 kt an 11 growth with 
almost 90 of ore sourced from underground stable average  
grades of 387 gt silver were achieved backed by completion 
of implementation of automated mine planning using  
datamine software
at goltsovoye underground development was focused  
on access to ore bodies 9 and 3 and grew by 24 to  
52 thousand metres the amount of ore mined was lower 
compared to 2011 at 84 kt however it is set to grow almost 
twofold in 2013 since the development works have now been 
completed the test works performed in 2012 for sublevel 
blasthole stoping method have yielded positive results 
compared to previously used shrinkage stoping method  
and the application of this mining method in 2013  
is expected to increase both efﬁciency and grade control
at arylakh openpit mining is approaching completion  
which is expected in q2 2013 to be followed by underground 
development ore mined in 2012 grew by 6 to 167 kt 
combined with increased average silver grade of 519 gt  
a 10 growth
underground development at lunnoye focused on ore zone 7 
and grew 88 compared to 2011 ore mined was 24 above 
2011 with the average silver grade slightly short of 300 gt
processing
ore processed at the main omsukchan concentrator was 
stable at 1439 kt due to increased silver grades driven by 
stable grade proﬁle at dukat and growth in silver grades at 
goltsovoye average grade processed was up 5 compared 
to 2012 average recoveries grew by 7 for gold and  
by 10 for silver to 81 and 84 respectively following  
a refurbishment of the plant and installation of the gravity circuit 
in 2011 and full implementation of the geotechnical mapping 
system in 2012 which is used to determine technological 
parameters of the process adjusted for the mineralogical 
properties ore feed as a result annual silver production  
at the omsukchan concentrator grew by 14 to 155 moz 
while average gold production was stable at 25 koz
at the lunnoye processing plant a record 333 kt of ore has 
been processed exceeding nameplate capacity of 300 ktpa 
while average silver grades and recoveries were stable an 
increase in throughput allowed us to achieve an increase  
in silver production to 37 moz growth of 9 compared to 
2011 ongoing debottlenecking at the plant is expected to 
increase throughput to 400 ktpa by 2014 with additional  
ore to be sourced from the recently acquired olcha deposit
mines
dukat nachalny2 goltsovoye perevalny lunnoye arylakh total
status operating developing operating scoping operating operating
mineralisation type veinveinlet vein 
disseminated
narrow vein veinveinlet mineralised
 zone
veinveinlet
mine type open pitunderground 
mining method
underground 
and openpit
openpit underground underground underground openpit
commencement of mining year 2001 na 2011 na 2000 2006
current life of mine end year 2021 na 2021 na 2023 2013
reserves
gold equivalent moz 39 03 00 07 02 51
gold equivalent reserve grade gt 85 117 00 64 109 83
resources
gold equivalent moz 08 08 02 04 01 23
gold equivalent resource grade gt 57 106 66 74 68 78
rr included in dukat
mining 20112012 statistics
dukat goltsovoye lunnoye  arylakh total
2012 2011
 
change 2012 2011
 
change 2012 2011
 
change 2012 2011
 
change
stripping kt 967 810 19 – –na 2591 2837 9 3558 3647 2
underground 
development 
m 24311 15705 55 5248 4238 24 4601 2444 88 34160 22387 53
ore mined kt 1328 1 197 1 1 84 126 33 370 321 15 1782 1644 8
metal in ore 
mined grades
– gold 07 08 10 – –na 11 13 20 07 08 10
– silver 387 387 0 548 467 17 395 397 0 397 395 0
production 20112012 statistics
omsukchan concentrator lunnoye processing plant total
2012 2011
 
change 2012 2011

change 2012 2011
 
change
ore processed kt 1439 1432 0 333 301 11 1772 1733 2
metal in ore processed grades
– gold 07 07 5 12 13 14 08 08 7
– silver 401 383 5 4112 414 1 1 403 388 4
recoveries
– gold 81 76 7 90 92 2
– silver 84 77 10 88 87 0
production na
– gold koz 25 25 1 11 12 6 36 37 1
– silver moz 155 136 14 37 34 9 192 170 13
gold equivalent koz 284 251 13 72 68 6 357 319 12
total cash costsilver equivalent usoz 121 140 13
adjusted ebitda usm 378 282 34
business review
annual report 2012 polymetal international plc 31 30 polymetal international plc annual report 2012 omolon
delivering the full potential of a processing  
hub concept
russia magadan region
managing director sergey antipin
employees 1051 
38
ore mined in 2012 2662 kt
omolon delivered an excellent 
performance in 2012 achieving full 
capacity and reﬂecting a successful 
implementation of the processing 
hub concept this is a tremendous 
turnaround story after the purchase 
of the underperforming kubaka  
plant and satellite deposits back  
in 20082009 in 2012 omolon 
produced 173 koz of gold equivalent 
after successful transportation of 
highgrade ore from sopka and the 
commissioning of the merrillcrowe 
circuit at the refurbished  
kubaka plant 
46
ore processed in 2012 840 kt
172
average gold equivalent grade 
processed 7 2
279
gold equivalent production  
in 2012 173 koz
priorities for 2013
in the coming year mining volumes  
at birkachan and sopka will decrease  
as we are planning to draw down the 
existing ore stockpiles we are planning 
to truck more than 280 kt of highgrade 
ore from sopka by winter road and 
mining at tsokol will grow since the mine 
will be operational for the full calendar 
year development of the dalneye 
deposit is underway with mining 
scheduled for the second half of 2013
in 2013 an allyearround heap leach 
facility will be commissioned at 
birkachan with production scheduled 
for the second half of 2013 lowgrade 
ore stacking at birkachan hl 
continues with a total 116 kt of ore 
stacked in the second half of 2012  
a stationary carbonincolumn plant  
at birkachan to recover gold from  
heap leaching is on track to be 
commissioned in june 2013
preparatory works for the installation  
of heap leaching pads at sopka will  
take place in 2013 with commissioning  
of the facility scheduled for 2015
average grades processed at the 
kubaka plant will be slightly lower than 
in 2012 due to lower volumes of sopka 
ore which will be processed in the year 
this will be compensated for by an 
expected increase in total throughput  
to more than 770 ktpa
business review
annual report 2012 polymetal international plc 33 32 polymetal international plc annual report 2012
business review 
operating review business review 
operating review
2012 highlights
mining
mining works at the omolon hub are now performed at three 
deposits birkachan where highgrade ore is processed at  
the kubaka plant and lower grade ore is prepared for year
round heap leaching onsite which will be started in 2013 
sopka highgrade ore trucked to kubaka by winter road  
lower grade ore stockpiled for further heap leaching which  
is expected to be commissioned in 2015 and tsokol where 
mining started in the second half of 2012 also processed  
at the kubaka plant
stripping volumes grew by 67 yearonyear mostly due  
to a massive stripping campaign at sopka in the middle of the 
year to prepare ore bodies for active mining in q4 and in 2013 
and due to an initial stripping campaign at tsokol total ore 
mined grew to 2662 kt an increase of 38 compared to 2011 
mostly as a result of major increase in mining at sopka by 73 
and the start of mining at tsokol in the third quarter of the year 
at sopka ore mined grew to 1271 kt with 324 kt representing 
highgrade ore for processing at the kubaka mill average 
grades of 62 gt gold and 248 gt silver and 947 kt of heap 
leach ore 09 gt gold and 45 gt silver the construction of the 
heap leaching facility at sopka will start in the summer of 2013
a major success of the year was the operation of a 180km 
long winter road from the sopka mine to the kubaka mill 
which allowed us to truck more than 330 kt of ore during 
januaryapril exceeding our initial expectations this high
grade ore was then processed during the second and third 
omolon
 continued
processing activity at omolon
operations at burkachan merrillcrowe section at the kubaka plant
1

5
3
4
2
evensk
kubaka
magadan

    birkachan
    tsokol
    oroch 
    sopka
    dalneye
1
2
3
4
5
processing plant
town 
mines
quarters of the year the winter road set up in december 2012 
opened on time and it began successful operation in the 2013 
trucking season
in the third quarter we started mining high gold grade ore at 
tsokol a new satellite deposit for omolon located near kubaka 
plant the ﬁrst 101 kt grading 52 gt gold were mined and 
processed in 2012
at birkachan ore mined grew by 8 yearonyear while 
average gold grade in ore mined grew by 5 for heap leach 
ore and by 9 for milling ore to 32 gt in 2013 we expect  
a decrease in mining volumes in order to destockpile the 
operation after intensive mining during 2011 and 2012 
processing
the refurbished processing plant with its merrillcrowe section 
has performed fully in line with expectations total throughput 
increased by 26 compared to 2011 to 724 kt while average 
grades in ore processed grew dramatically due to inclusion of 
ores from sopka and tsokol to 59 gt gold and 135 gt silver 
a multipletimes increase compared to 2011 average recovery 
also grew to 94 for gold and 88 for silver as a result  
of commissioning the merrillcrowe section which  
quickly achieved the design parameters
as a result gold production grew to 129 koz and silver 
production to 27 moz representing a nearly fourfold increase 
compared to 2011 in gold equivalent terms due to the larger 
than expected volume of ore trucked and processed from 
sopka some of the planned 2013 production was shifted to 2012
processing plants
kubaka
type cil merrillcrowe
capacity ktpa 850
commencement of production year 2010
ore from which mines is processed birkachan sopka
 tsokol dalneye
birkachan
type heap leach
capacity ktpa 1000
commencement of production year 2010
ore from which mines is processed birkachan
mines
birkachan sopka oroch tsokol dalneye prognoz total
status operating operating prefeasibility operating development feasibility
mineralisation type veinveinlet
stockwork
veinveinlet veinveinlet veinveinlet vein veinveinlet
mine type  
open pitunderground  
mining method
open pit 
underground 
from 2017
openpit openpit openpit openpit openpit
commencement of mining year 2010 2010 na 2012 na na
current life of mine end year 2023 2018 na 2016 na na
reserves
gold equivalent moz 10 05  – 02 03 21
gold equivalent reserve grade gt 26 44  – 64 49 34
resources
gold equivalent moz 03 002 04 01 006 09
gold equivalent resource grade gt 36 34 60 65 28 46
mining 20112012 statistics
birkachan sopka tsokol total
2012 2011
 
change 2012 2011

change 2012 2011

change 2012 2011
 
change
stripping kt 9133 7925 15 9054 4956 83 3284 –na 21471 12880 67
ore mined kt 1290 1 192 8 1271 735 73 101 –na 2662 1928 38
metal in ore 
mined grades
– gold 18 16 7 23 26 14 52 –na 21 20 6
– silver – –na 967 857 13 – –na 461 327 41
production 20112012 statistics
kubaka plant birkachan heap leach total
2012 2011
 
change 2012 2011
 
change 2012 2011
 
change
ore processed kt 724 574 26 116 –na 840 574 46
metal in ore processed grades
– gold 59 24 141 11 –na 52 24 114
– silver 1351 12 1 1016 – –na 1165 121 863
recoveries
– gold 94 92 3
– gold 88 63 40
production na
– gold koz 129 39 229 – 4100 129 43 199
– silver moz 27 01 1883 – 0100 27 02 1658
gold equivalent koz 173 41 318 – 4100 173 46 279
total cash costge oz usoz 918 1481 38
adjusted ebitda usm 124 5 2480
exploration
during 2012 based on prior exploration results we converted 
resources at tsokol and dalneye to reserves resulting in  
a total addition of nearly 05 moz of gold equivalent to the  
hub’s reserve base
our current exploration programme is aimed at further 
extension of the lifeofmine at the kubaka plant by discovering 
additional resources within 150180 km range from the 
processing facility key targets include burgali where we are 
currently preparing a resource estimate and prognoz where 
substantial inﬁll drilling and geotechnical studies were carried 
out the ore properties at prognoz indicate that it is easily 
amenable for leaching and can be economically processed  
at the kubaka plant whereas at burgali a resource estimate  
is expected in 2013
business review
annual report 2012 polymetal international plc 35 34 polymetal international plc annual report 2012 amursk pox hub 
the ﬁrst operating pressure oxidation plant  
in russia and the cis gold sector
russia khabarovsk territory
managing director vladimir shamin
employees 323
43 moz
gold reserves
the amursk pressure oxidation plant 
pox is unquestionably a key project 
and one that will give us a signiﬁcant 
competitive advantage both nationally 
and in the global gold industry  
this stateofthe art facility is the ﬁrst 
operating pox plant in the former 
soviet union’s gold sector and by 
exploiting this technology we will open 
up opportunities for the economic 
processing of refractory gold deposits 
in russia and the cis which are 
currently idle due to the low recovery 
rate achievable by conventional 
processing methods further amursk 
pox’s location with its access to 
cheap power infrastructure and 
qualiﬁed labour will ensure attractive 
cost levels and stability of output
62 gt
average reserve grade
16 kt
concentrate processed
14 koz
gold produced in 2012
business review 
operating review
priorities for 2013
full rampup of the amursk pox  
to capacity throughput and recovery 
remains a top priority of our 
management team
the pox was successfully restarted  
in midjanuary gold recoveries are 
expected to normalise once all chlorine 
is removed from the ﬂow sheet with 
water in dry tailings and additional 
water treatment equipment is installed 
to handle ﬂuctuations in the chemical 
composition of concentrate and 
makeup process water throughput  
will continue to be affected until  
inconel parts are replaced by the  
ones made from titanium and ferralium 
not susceptible to corrosion in the  
presence of chlorineion 
full replacement of inconel by titanium 
will require a sixweek shutdown in  
q2 2013 during this shutdown certain 
changes to limelimestone preparation 
and concentrate intake sections will be 
undertaken as the actual properties  
of concentrate in the process differ  
from certain design assumptions  
we therefore expect to achieve  
a steady level of operation at capacity 
throughput and recovery in q4 of 2013
to avoid buildup of excessive 
concentrate stockpiles we are  
currently reviewing the possibility  
to restart sale of concentrates from 
albazino in q2 of 2013
business review
annual report 2012 polymetal international plc 37 36 polymetal international plc annual report 2012 mayskoye
albazino
amursk pox
pevek
vanino
2
1
vanino o
business review 
operating review
2012 highlights
amursk  
pox hub
continued
processing activity at amursk pox hub
the plant’s melting section
the oxygen station 
weighing of doré bars
khabarovsk
nikolaevsk
onamur


komsomolskonamur


kherpuchi

oglongi
1
albazino
amursk pox
mines      albazino     mayskoye        processing plants     town       port 1 2 
performance in 2012
construction of the amursk pox facility was completed in 
2011 and the plant started the commissioning process at the 
beginning of 2012 the ﬁrst gold was poured in april and the 
rampup process started with a gradual increase in throughput 
applied across all of the plant’s sections lower grade third
party and own concentrates were used during the rampup 
process in order to avoid excessive losses into tailings
the rampup process however did not develop fully in line  
with our expectations in the third quarter due to mechanical  
issues – mainly defective stainless pipe welding – the facility 
underwent several lengthy maintenance shutdowns which  
led to a material delay in the original rampup schedule
during october and november the plant was steadily ramping 
up towards capacity daily throughput with several scheduled 
shutdowns which were required to complete the necessary 
upgrades of highpressure stainlesssteel pipes weighing 
down on the total amount of concentrate processed and 
average recoveries in early december the plant successfully 
ramped up to full throughput and approximately 90 recovery 
however in middecember the presence of chlorine in the 
process water caused a signiﬁcant decrease in recoveries and 
accelerated the corrosion of certain parts of the circuit made 
from complex alloys to prevent loss of gold to tailings the 
facility was shut down in late december subsequently the 
source of the chlorine in the process water was traced to 
limestone used to neutralise discharge from the autoclave 
limestone supply was changed accordingly and measures  
to implement chlorine control for all incoming consumables 
were put in place
as a result a total of 16 kt of albazino concentrate was 
processed at amursk pox during 2012 below our initial 
expectations with artiﬁcially lower average gold grades  
in concentrate of 38 gt and an average recovery of 79 
including periods of shutdowns and restarts when the 
recoveries are lower due to lowerthandesigned pressure  
and temperature this has resulted in total gold production  
of 14 koz in 2012
potential impact from albazino expansion
the expected expansion of mining operations and 
concentrator capacity at albazino will also require additional 
capacity at the pox plant which was originally designed to 
process 225 ktpa of concentrate from a mix of albazino and 
mayskoye output this capacity can be freed up by redirecting 
concentrate from mayskoye to thirdparty offtakers instead  
of internal processing at the amursk pox – a much preferred 
option which will allow signiﬁcant capital expenditure savings 
the pox facility will then be fully focused on processing 
concentrates from albazino with uniform chemical content 
alternatively we are considering the simultaneous expansion  
of the mine and concentrator at albazino and the pox facility  
at amursk which has sufﬁcient land and infrastructure onsite 
this decision will largely depend on the potential offtake 
conditions for mayskoye we expect that even in the event  
of pox expansion the experience gained during construction 
and rampup of the existing facility will be of great value 
allowing us to reduce cost and time to launch
processing plant
amursk pox
type pox  cyanidation
capacity ktpa 225 concentrate
commencement of production year 2012
ore from which  
mines is processed
concentrate from
 albazino and mayskoye
production 20112012 statistics
amursk pox plant
2012 2011
 
change
concentrate processed kt 16 –na
gold grade in ore processed gt 380 –na
recoveries 79 –na
total gold equivalent production koz 14 –na
concentrate sourced from mines
albazino mayskoye total
status operating construction
mineralisation type mineralised
 zones
 refractory
ore
narrow vein 
refractory
ore
mine type open pitunderground mining method openpit underground
commencement of mining year 2009 2011
current life of mine end year 2020 2024
reservesresources
reserves
gold moz 18 24 43
gold reserve grade gt 43 96 62
resources
gold moz 37 48 86
gold resource grade gt 46 83 61
no n
po pox po
1
business review
annual report 2012 polymetal international plc 39 38 polymetal international plc annual report 2012 albazino 
our newest operating mine with  
signiﬁcant further growth potential
russia khabarovsk territory
managing director alexander simon
employees 878
24
gold recovery to concentrate 87
albazino is our newest operating 
mine and is a major greenﬁeld 
exploration success 2012 was a 
remarkable year for the asset with 
the mine and concentrator achieving 
expected throughput and recoveries 
and a major exploration success 
during the year which places 
albazino in the world class assets 
league as a result albazino 
produced more than 180 koz  
of gold in concentrate in 2012 and 
the resource base has doubled 
compared to the beginning of the 
year in 2013 further improvements 
in performance are expected as soon 
as the amursk pox plant reaches 
capacity on the back of this sizeable 
resource increase we are now 
undertaking a feasibility study for 
albazino2 with a view to expanding 
the mine and concentrator 
205
gold in concentrate produced 181 koz
25
total cash costs usge oz 767
27 moz
mineral resources growth
priorities for 2013
the year ahead will be an important 
milestone in the development  
of albazino
in 2013 the albazino mine and 
concentrator will operate at capacity  
for a full year which will lead to further 
growth in mining and processing 
volumes we will reconsider the option 
to use the offtake agreements during 
the continued rampup of the amursk 
pox plant which is expected to 
achieve capacity for throughput and 
recoveries by q4 2013 therefore gold 
production will be split between pox 
and offtake
a number of cost saving and 
debottlenecking measures will be 
implemented in addition to the 
expected cost savings which will 
emerge as soon as the concentrate 
processing is fully redirected  
to the pox plant
we will continue the development of the 
underground decline and underground 
inﬁll drilling at the olga zone and will 
also focus on detalisation of the ore 
bodies at zones ekaterina1 and 
ekaterina2 further exploration will  
be performed at the ﬂanks of the 
albazino ﬁeld with a view to 
discovering additional resources
a conversion of the newly discovered 
mineral resources to reserves and  
the feasibility study for the albazino 
expansion project are expected to be 
produced in the ﬁrst half of 2014 with  
the construction decision to be put  
to the board for approval by the middle 
of 2014
business review
annual report 2012 polymetal international plc 41 40 polymetal international plc annual report 2012
business review
operating review business review 
operating review
2012 highlights
albazino
continued
ore transportation bird’seye view of the plant
operational activity at albazino
khabarovsk
nikolaevsk
onamur


komsomolskonamur


kherpuchi

oglongi
1
albazino
amursk pox
    albazino 1
processing plants
town 
mines
exploration success and our expansion plans
as a result of our extensive exploration programme between 
2009 and 2012 several new zones were identiﬁed and a new 
mineral resource estimate totalling 37 mt at an average grade 
of 48 gt more than doubling the total resource base to  
a total of 57 moz inclusive of ore reserves was prepared  
and audited in 2012 the cost of discovery was approximately  
us12 dollars per ounce of resources
the mineral resources and ore reserves estimates now cover 
ﬁve ore zones olga anﬁsa nadezhda ekaterina1 and 
ekaterina2 anﬁsa is currently subject to openpit mining  
the development plan for other zones will be determined after 
the completion of the optimisation study currently expected  
in q2 2013
in 2012 the nadezhda and olga zones were combined in  
a single ore zone and new mineralised intersections were 
discovered south of ekaterina2 we have also started 
underground exploration of deep ore bodies in the olga zone
active exploration at albazino is ongoing with further resource 
potential identiﬁed most importantly at ekaterina2 and the 
new tatyana zone inﬁll underground drilling in 1h 2013 is 
expected to lead to a substantial upgrade of inferred resources 
and allow meaningful resourcetoreserve conversion
the exploration results at albazino highlight the tremendous 
potential of this asset and pave the way for an expansion 
decision to be taken in the second half of 2013 – beginning  
of 2014 albazino has become an excellent example of 
polymetal’s ability to create value by discovering highgrade 
ounces close to existing processing facilities 
different options are currently being considered for the 
albazino expansion and decisions are to be made in 2013
2014 during the feasibility study the expansion project will 
beneﬁt from a common infrastructure with the current mine 
but power generation capacity and concentrator expansion  
will still require signiﬁcant additional capital expenditure  
we are also evaluating different options for mining operations 
at the new zones including a combination of openpit and 
underground mining or a large single openpit
further the refractory nature of the ore similar to the current 
ore mined at albazino will require additional capacity at the 
pox plant this capacity can be secured by redirecting 
concentrate from mayskoye to thirdparty offtakers instead  
of internal processing at the amursk pox – a much preferred 
option which will allow signiﬁcant capital expenditure savings 
alternatively we are considering simultaneous expansion  
of the mine and concentrator at albazino and the pox facility  
at amursk which has sufﬁcient land and onsite infrastructure 
available this decision will largely depend on the potential 
offtake conditions for mayskoye
mining
the openpit mine at albazino quickly achieved its target 
capacity in 2012 with 1216 kt of ore mined in the year  
a 45 increase over 2011 importantly as the mine has 
accessed deeper levels of the pit grades grew from 43 gt  
in 2011 to 54 gt in 2012 a 27 increase mining volumes  
are set to further increase in 2013
processing
the ﬂotation concentrator at albazino commissioned in 2011 
reached capacity throughput and recovery by q2 2012  
total ore processed grew twofold to 1226 kt of ore  
while average gold grade processed grew 23 to 53 gt 
recoveries to concentrate grew to 87 up from 70 in 2011 
marking a successful rampup of the plant as a result gold  
in concentrate produced was 181 koz a threefold increase 
compared to 2011 out of 115 kt of concentrate produced  
with an average gold grade of 49 gt 40 kt with 635 koz  
of payable gold content was sold during the year to thirdparty 
offtakers in china allowing us to maximise cash ﬂows during 
the rampup period at the amursk pox plant as the pox 
facility has started its rampup process from april 2012 a 
further 16 kt of concentrate were processed at the pox plant 
in 2012 yielding production of 14 koz of gold total albazino 
gold production in the year was 77 koz up 26 times 
compared to 2011
ongoing improvement process
in 2012 several smallscale infrastructural projects were 
underway at albazino all of them are focused on 
debottlenecking the mine and enhancing its infrastructure  
we have started construction of an allyearround road which 
will connect albazino and komsomolskonamur in order to 
optimise outbound concentrate logistics for delivery to amursk 
pox and inbound supplies and personnel logistics the road  
is expected to be commissioned in the middle of 2013  
an emulsion explosives plant has been constructed with 
operations starting in early 2013 
processing plant
albazino concentrator
type flotation
capacity ktpa 1500
commencement of production year 2011
ore from which mines is processed albazino
mining 20112012 statistics
2012 2011
 
change
stripping kt 15160 14584 4
underground development m – –na
ore mined kt 1216 841 45
gold grade in ore mined 54 43 27
production 20112012 statistics
2012 2011
 
change
ore processed kt 1226 620 98
gold grade in ore processed gt 53 43 23
recoveries to concentrate 87 70 24
concentrate produced kt 115 43 166
gold grade in concentrate produced gt 490 427 15
gold in concentrate koz 181 59 205
concentrate sold kt 40 20 101
saleable gold in concentrate sold to offtakers koz 63 30 113
gold production at amursk pox 14 –na
total gold equivalent production koz 77 30 160
total cash costge oz usoz 767 1018 25
adjusted ebitda usm ex mayskoye 325 45 618
mine
albazino
status operating
mineralisation type mineralised zones refractory ore
mine type open pitunderground mining method openpit
commencement of mining year 2009
current life of mine end year 2020
reservesresources
reserves
gold moz 18
gold reserve grade gt 43
resources
gold moz 37
gold resource grade gt 46
business review
annual report 2012 polymetal international plc 43 42 polymetal international plc annual report 2012 mayskoye 
on track to launch in april 2013
russia chukotka
managing director igor nikolishin
employees 811
24 moz
gold reserves
mayskoye is the one remaining  
large construction project to be 
completed to achieve our medium
term production target of 14 moz  
of gold equivalent in 2014 upon 
completion mayskoye will be our 
second largest underground 
operation and our second mine  
with refractory ore brought into 
production the development of this 
underground mine in a distant region 
of chukotka – with access by sea  
only possible during the summer 
navigation period – is justiﬁed by its 
average reserve grade of 96 gt one 
of the highest across our portfolio
96 gt
average reserve grade
2013
start of commercial production
priorities for 2013
we continue to deliver the remaining 
small batches of equipment for  
the construction of the mayskoye 
concentrator construction is on track  
for the revised startup deadline in april 
2013 with works currently concentrated 
on the installation of electrical 
controlling and auxiliary equipment
given the more than twofold resource 
expansion at albazino and targeted 
construction decision for the expansion 
of the albazino mine and concentrator  
in h2 2013 we will assess and make  
the decision on the option of thirdparty 
concentrate offtake for mayskoye  
in 2013 this will potentially allow  
us to signiﬁcantly reduce capital 
expenditure on the expansion project  
by fully reallocating existing pox 
capacity to the processing of 
concentrate from albazino
negotiations with potential offtake 
partners have already started and the 
decision will be taken upon startup of 
the mayskoye concentrator after larger 
samples of concentrate have been 
tested by offtakers and the treatment 
charges and the transportation costs 
are known
business review
annual report 2012 polymetal international plc 45 44 polymetal international plc annual report 2012
business review 
operating review business review 
operating review
2012 highlights
mining
underground development at mayskoye is continuing as 
planned with the ﬁrst ore mined from stopes in december  
a total of 11068 m of underground development was 
completed during 2012 a relatively small amount of ore –  
40 kt – was mined in 2012 as our focus remained on the 
underground development in preparation for active mining 
upon startup of the processing facility nevertheless current 
stocks of ore mined to date are sufﬁcient to provide the 
processing plant with more than three months of feedstock  
as the plant commissioning date approaches we have 
continued active ore mining from stopes with the annual 
amount of ore mined expected to exceed 600 kt in 2013
construction
originally the startup of mayskoye concentrator was 
scheduled for the end of 2012 however during the second 
half of 2012 there were signiﬁcant delays in delivering  
the remaining construction materials by rail to the ports  
for onward shipping to mayskoye as a result some of the 
materials had to be airlifted after the navigation period was 
over given this fact the startup of mayskoye concentrator is 
now scheduled for april 2013 this will allow the concentrator 
to produce and ship concentrate to the pox facility andor 
offtakers in the summer navigation period of 2013  
as originally planned albeit in lower than expected volumes
during 2012 all major construction works were completed at 
the processing plant including installation of equipment at the 
crushing grinding ﬂotation thickening ﬁltering and drying 
sections in q1 2012 the site was connected to a local  
110 kw power grid a coalﬁred heat plant was also launched 
in late 2012
at the underground mine construction and commissioning  
of the main ventilation unit was completed all work on water 
supply and the construction of tailing facilities were completed 
initial accumulation of water in the tailings pond was performed 
in spring 2012
mayskoye
continued
ore loading vehicles in action underground mining
operating activity at mayskoye
mayskoye
albazino
amursk pox
pevek
vanino
2
1
    albazino
    mayskoye
1
2
processing plants
port
mines
processing plant
mayskoye concentrator
type flotation
capacity ktpa 850
commencement of production year 2013
ore from which mines is processed mayskoye
mining 20112012 statistics
mayskoye
2012 2011
 
change
underground development m 11068 10999 1
ore mined kt 40 79 –49
gold grade in ore mined 99 98 1
mine
mayskoye
status construction
mineralisation type narrow vein 
refractory
ore
mine type open pitunderground mining method underground
commencement of mining year 2011
current life of mine end year 2024
reservesresources
reserves
gold moz 24 
gold reserve grade gt 96 
resources
gold moz 48
gold resource grade gt 83
mayskoye’s ﬂotation section
business review
annual report 2012 polymetal international plc 47 46 polymetal international plc annual report 2012 khakanja
transforming one of our core assets  
into a genuine processing hub
russia khabarovsk territory
managing director alexander akamov
employees 1181 
28
gold equivalent produced in 2012 
164 koz
khakanja delivered a strong 
performance in 2012 with a 28 
growth in gold equivalent production 
driven by the increased grade  
proﬁle from different ore sources  
the increased average grades 
supported excellent proﬁtability  
of the operation in 2012 marked  
by 9 reduction in total cash costs 
to us614ge oz and growth  
of adjusted ebitda by 57 to 
us178 million in 2013 the  
khakanja plant will operate as  
a genuine processing hub treating 
ore from four deposits – khakanja 
yurievskoye avlayakan and ozerny
26
average gold equivalent grade  
in ore processed in 2012 24 gt
9
total cash costs usge oz 614
57
adjusted ebitda growth
priorities for 2013
after conducting geotechnical studies 
the decision was made to postpone the 
development of an underground mine  
at the khakanja main deposit in favour 
of another pushback at the open pit 1  
this approach will reduce shortterm 
capital costs and the risks associated 
with underground mining in difﬁcult 
geotechnical conditions
at avlayakan openpit mining will 
continue followed by the start of 
underground mining in q4 2013early 
2014 port facilities at kiran will be 
upgraded in order to achieve the 
appropriate stability and safety  
of ore shipping conditions 
at ozerny mining volumes will grow  
in 2013 as the mine will be operating  
for a full calendar year with seasonal 
trucking by winter road
accordingly in the structure of ore  
feed for the khakanja plant’s the share 
of avlayakan and ozerny will increase 
while the total volume of ore processed 
will be unchanged this will result  
in a reduction of silver production 
yearonyear and the growth of gold 
production driven by structural grade 
proﬁle change
business review
annual report 2012 polymetal international plc 49 48 polymetal international plc annual report 2012
business review 
operating review business review 
operating review
2012 highlights
khakanja
continued
one of the laboratory facilities checking plant control equipment
operating activity at khakanja
1
3
okhotsk
2
khakanja
kiran
    yurievskoye
    avlayakan
    ozerny
1
2
3
processing plant
port
mines
appropriate safety procedures in this complex logistic chain in 
the future we are currently engaged in consultations with the 
regulatory authorities and are investing around us10 million 
in our own barge ﬂeet in the region in addition we are carrying 
out a port infrastructure modernisation project at kiran
in 2012 mining started at ozerny a new satellite mine located 
40 km from the khakanja plant where a winter road and mine 
infrastructure have been constructed during the year mining at 
ozerny started on schedule in the fourth quarter with the ﬁrst 
56 kt grading 48 gt gold and 46 gt silver mined and 13 kt 
successfully processed in 2012 in the ﬁrst quarter of 2013  
ore mined will be trucked by winter road and the mine will  
then build up an ore stockpile for processing in 2014
processing
total ore processed at the khakanja plant in 2012 was stable 
compared to 2011 and comprised 622 kt however gold 
production grew by 8 to 91 koz and silver production grew 
by 66 to 44 moz this impressive growth has been achieved 
on the back of increased average grades mostly due to high 
gold grade ore from avlayakan and high silver grade from 
khakanja’s pit 3 average gold grade processed increased  
by 4 to 48 gt and silver grade grew by 60 to 277 gt  
the growth in grades was further supported by increased 
recoveries of 96 for gold and 80 for silver
mining
at the main khakanja deposit ore mined grew more than 
twofold to 1211 kt with mining works concentrated on  
pit 3 this resulted in increased silver grade proﬁle  
average of 220 gt an increase of 7 compared to 2011
ore mined at yurievskoye reached a record 148 kt with mining 
works on the deposit completed in january 2013 high average 
grades at yurievskoye 65 gt gold supported the overall 
grade proﬁle at the khakanja processing facility the remaining 
ore and equipment will be trucked from the deposit by winter 
road in early 2013 and rehabilitation of the land will take place
at avlayakan openpit mining volumes decreased to  
79 kt as openpit mining based on current resources  
is expected to be completed in 2014 followed by underground 
development 47 kt of ore mined was shipped by sea  
to the port of okhotsk and further trucked to khakanja for 
processing this complex logistic chain is justiﬁed by the  
high gold and silver grades 15 gt and 124 gt respectively 
mined at avlayakan
we deeply regret the loss of the ship amurskaya and its  
crew in the okhotsk sea in october 2012 this third party 
vessel was contracted by polymetal to transport the avlayakan 
ore from the local port of kiran for further processing  
at khakanja in order to secure ore supplies and ensure 
mines
khakanja yurievskoye avlayakan kirankan ozerny total
status operating operating operating scoping operating
mineralisation type veinveinlet vein vein vein vein zone
mine type open pitunderground  
mining method
openpit 
to be 
followed by 
underground
openpit
to be
followed by 
underground
openpit
to be
followed by 
underground
na openpit
commencement of mining year 2002 2007 2010 na 2012
current life of mine end year 2018 2013 2018 tbd 2015
reserves
gold equivalent moz 03 – 03 02 07
gold equivalent reserve grade gt 48 – 219 58 75
resources
gold equivalent moz 006 – 008 003 010 03
gold equivalent resource grade gt 56 – 158 67 32 53
mining 20112012 statistics
khakanja  yurievskoye ozerny avlayakan total
2012 2011
 
change 2012 2011
 
change 2012 2011
 
change 2012 2011
 
change
stripping kt 4435 9601 54 449 –na 1637 1 191 37 6521 10792 40
underground 
development 
m 1489 1764 16 – –na – –na 1489 1764 16
ore mined kt 1359 528 157 56 –na 79 128 38 1494 657 128
metal in ore 
mined grades
– gold 26 29 9 48 –na 150 17  1 12 34 57 40
– silver 197 199 1 46 –na 124 38 229 188 167 12
production 20112012 statistics
khakanja plant
2012 2011
 
change
ore processed kt 622 617 1
metal in ore processed grades
– gold 48 46 4
– silver 2772 1727 60
recoveries
– gold 96 92 4
– silver 80 78 3
production
– gold koz 91 84 8
– silver moz 44 26 66
gold equivalent koz 164 128 28
total cash costge oz usoz 614 672 9
adjusted ebitda usm 178 113 57
processing plants
khakanja plant
type cyanide leaching and
merrillcrowe
capacity ktpa 600
commencement of production year 2003
ore from which mines is processed khakanja yurievskoye
avlayakan ozerny
exploration
our exploration efforts are focused on a large area surrounding 
the khakanja processing plant with the main objective 
remaining to extend the current life of mine by identifying 
mediumsized highgrade deposits in the area additional 
drilling has been performed at kundumi where a number  
of highgrade ore intercepts were identiﬁed however the key 
results of the 2012 season are resourcetoreserve conversions 
at ozerny where mining started in q4 2012 and avlayakan 
where inﬁll drilling has been performed to prepare for 
underground mining total reserve growth was 045 moz  
of gold equivalent
business review
annual report 2012 polymetal international plc 51 50 polymetal international plc annual report 2012 voro 
our ﬁrst mine at the peak of its performance
russia sverdlovsk region
managing director andrey novikov
employees 928
559
cash cost per gold equivalent  
ounce in 2012 usoz
voro was the ﬁrst of polymetal’s 
assets and it continues to deliver 
robust operating and ﬁnancial 
performance the grades and 
production volumes in 2012 were 
stable which resulted in continued 
leadership among our assets in 
terms of cost levels and ebitda 
margin – a record 65 in 2012 
65
adjusted ebitda margin in 2012
157 koz
gold equivalent produced in 2012
priorities for 2013
in 2013 primary ore will continue to be 
mostly sourced from the central pit 
with potential additional thirdparty 
supplies and oxidised ore from the 
south pit our team at voro will also be 
involved in the evaluation of options and 
development of mining operations at 
maminskoye a newly acquired deposit 
in the region although maminskoye  
is expected to operate as a standalone 
operation we expect that expertise 
sharing will be a great beneﬁt enabling 
fasttrack development of the deposit
business review
52 polymetal international plc annual report 2012 annual report 2012 polymetal international plc 53
business review 
operating review ongoing improvement process
voro continues to be the lowest cost and highest margin mine 
mostly due to solid grade proﬁle stable operating performance 
and favourable location allowing access to cheap power and 
infrastructure nevertheless we are committed to continuous 
improvement searching for further measures to enhance 
efﬁciency and proﬁtability of the operation in 2012 such 
measures included additional automated components  
and further development of computerised mine planning 
including implementation of medium and longterm plans
2012 highlights
mining
stripping and ore mining volumes at the main voro deposit 
were largely ﬂat at 11265 kt and 1684 kt respectively  
the average grades both in primary and oxidised ore were 
stable at 58 gt and 17 gt the preparations for mining  
at the south part of the voro pit which will be a main source  
of the oxidised ore in 2013 were completed during the year
at degtyarskoye mining was fully completed in november 
with 104 kt of ore grading 30 gt mined during 2012  
some of the ore from degtyarskoye was processed  
at the voro cip plant while the bulk of the ore was sent  
for processing to varvara 
both degtyarskoye and fevralskoye satellite deposits of voro 
were sold in december 2012
processing
at the heap leach circuit the amount of ore stacked was in line 
with previous year and recoveries were stable – all of which 
resulted in stable production output at 32 koz of gold at the 
cil plant ore processed was at 917 kt 2 above 2011 and 
recoveries increased to 789 also a 2 increase these 
improvements helped to partially compensate for the decline  
in average grade processed 53 gt in 2012 compared to  
59 gt in 2011 a 11 decrease and total production at the 
cil circuit comprised 118 koz of gold 6 below 2011 
voro
continued
part of the ore transportation system transport operations at the openpit mine
production activity at voro
yekaterinburg
karpinsk
serov

nijniy tagil
maminskoye


voro

1
2
    vorontsovskoye
 maminskoye licence area
1
2
processing plant
town 
mines
processing plants
voro cip
type flotationgravitation
capacity ktpa 940
commencement of production year 2005
ore from which mines  
is processed
vorontsovskoye
degtyarskoye
voro heap leach
type cyanide leaching and
merrillcrowe
capacity ktpa na
commencement of production year 2000
ore from which mines  
is processed
vorontsovskoe
degtyarskoe
mining 20112012 statistics
vorontsovskoye degtyarskoye total
2012 2011

change 2012 2011

change 2012 2011
 
change
stripping kt 11265 10954 3 1125 1591 29 12390 12788 3
ore mined kt 1684 1665 1 104 194 46 1788 1871 4
– oxidised 926 914 1
– primary 758 751 1
gold grade in ore mined 36 36 1 30 42 28 35 36 3
– oxidised 17 17 0
– primary 58 58 1
production 20112012 statistics
voro cip voro heap leach total
2012 2011
 
change 2012 2011
 
change 2012 2011
 
change
ore processed kt 917 901 2 901 902 0 1818 1803 1
metal in ore processed grades
– gold 53 59 11 16 17 9 34 38 10
recoveries
– gold 79 78 2 74 74 0
production na
– gold koz 118 125 6 32 32 1 154 157 2
– silver moz 01 01 2 003 004 16 02 02 2
gold equivalent koz 120 127 6 33 32 1 157 160 2
total cash costge oz usoz 559 553 1
adjusted ebitda usm 174 175 1
mines
vorontsovskoye
status operating
mineralisation type mineralised zones
mine type open pitunderground mining method openpit
commencement of mining year 1999
current life of mine end year 2026
reserves
gold equivalent moz 14
gold equivalent reserve grade gt 29
resources
gold equivalent moz 007
gold equivalent resource grade gt 15
business review
annual report 2012 polymetal international plc 55 54 polymetal international plc annual report 2012
business review 
operating review varvara 
delivering stable operating performance  
in kazakhstan
kazakhstan kostanay region
managing director nikolay goncharov
employees 725 
10
adjusted ebitda growth 20122011
varvara is running fully in line with 
expectations nevertheless we 
remain focused on continuous 
improvement implementing best 
practices in mining and processing 
technologies and leveraging existing 
capacity by the use of thirdparty  
ore sources a major highlight of the 
year was the increase in reserves  
and resources on the back of 
exploration results on the ﬂanks of 
varvarinskoye – gold equivalent ore 
reserves up 50 to 16 moz mineral 
resources more than doubled  
to 36 moz of gold equivalent
6
gold equivalent production growth 
20122011 
36 moz
gold equivalent resources growth
priorities for 2013
in 2013 we will continue mining works  
in the central and northern parts of 
varvara’s main pit and plan to start 
stripping in the pit’s southern part  
the use of thirdparty ores is set  
to continue as this will allow the plant  
to maintain full capacity utilisation at the 
leach circuit exploration at the ﬂanks  
of varvara will continue in order to 
further strengthen the reserve and 
resource base
business review
56 polymetal international plc annual report 2012 annual report 2012 polymetal international plc 57
business review
operating review  ongoing improvement process
in 2012 we carried out a number of projects aimed at 
debottlenecking and efﬁciency improvement these included 
the design of an additional cyanidation tank a control ﬂotation 
cell on the ﬂotation circuit and construction of a railway spur 
which will be used for the transportation of supplies most 
importantly ore from thirdparty sources and shipping of 
concentrates sold to offtakers from varvara in addition  
in 2012 we installed a walking excavator which will allow  
us to reduce stripping costs through the use of relatively  
cheap electricity and improved stripping methods  
the excavator was commissioned in january 2013
2012 highlights
mining
ore mining at varvara was 9 lower yearonyear while 
stripping volumes were ﬂat due to volatility of the stripping 
ratios at different parts of the deposit however the average 
gold grades for both ﬂoat and leach ores demonstrated 
positive dynamics average gold grade was up 13 for the 
ﬂoat ore to 13 gt and up 11 for the leach ore to 09 gt 
while copper content in the ﬂoat ore grew 31 to 08 
processing
gold production grew 10 yearonyear exceeding the  
100 koz level this growth was mainly attributable to the  
leach circuit where throughput grades and recoveries 
increased by 5 9 and 3 respectively the leverage  
in throughput was achieved by securing thirdparty sources  
of ore in the region and the company expects to continue this 
practice in 2013 copper production in 2012 was 66 kt down 
5 yearonyear as a result of lower grades in ore processed  
in the period partially compensated for by increased 
throughput and improved recoveries 4 and 2  
yearonyear respectively
varvara
 continued
mining activity at the openpit mine stippler samples
operating activity at varvara
kostanay
varvara

1
    varvarinskoe 1
processing plant
town 
mines
mining 20112012 statistics
varvara – ﬂoat ore
2012 2011
 
change
stripping kt 26072 25993 0
ore mined kt 3609 3983 9
– ﬂoat ore 1031 1508 32
– leach ore 2577 2475 4
metal in ore mined grades
– gold gt – ﬂoat ore 13 1 1 13
– gold gt – leach ore 09 08 11
– copper  ﬂoat ore 08 06 31
production 20112012 statistics
varvara – ﬂotation varvara – leaching total
2012 2011
 
change 2012 2011
 
change 2012 2011
 
change
ore processed kt 992 950 4 2654 2523 5 3647 3473 5
metal in ore processed grades
– gold gt 12 13 4 12 1 1 9 12 11 5
– copper  08 09 13 – –na 021 024 13
recoveries
– gold 61 61 0 85 82 3
– copper 92 89 2
production na
– gold koz 22 22 1 79 70 13 101 92 10
– copper t 6567 6915 5 6567 6915 5
gold equivalent koz 55 57 3 79 70 13 134 127 6
total cash costge oz usoz 804 747 8
adjusted ebitda usm 100 91 10
mines
varvarinskoye
status operating
mineralisation type stockstockwork
mine type open pitunderground mining method openpit
commencement of mining year 2006
current life of mine end year 2023
reserves
gold equivalent moz 16
gold equivalent reserve grade gt 12
resources
gold equivalent moz 36
gold equivalent resource grade gt 14
processing plant
varvara plant
type cip flotation
capacity ktpa 3150 1050
commencement of 
production year 2002 2001
ore from which mines 
is processed varvarinskoye varvarinskoye
business review
annual report 2012 polymetal international plc 59 58 polymetal international plc annual report 2012
business review
operating review business review 
operating review
polymetal pursues standalone 
exploration projects with the aim  
of discovering sizeable and high 
quality deposits
exploration 
we are conducting exploration works in four regions  
of russia – khabarovsk magadan karelia and sverdlovsk – 
as well as in kazakhstan polymetal currently has 54 licences 
for geological studies exploration and gold silver and copper 
mining and one coal mining licence our current exploration 
portfolio includes 43 licences with a total area of approximately 
10503 km
2

exploration activities in 2012 took place in 31 licensed areas of 
which 7 areas are at an advanced stage greenﬁeld exploration 
continues to be one of the principal sources of growth for 
polymetal as demonstrated in the past by our success at 
albazino which has seen multiple resource increases since its 
acquisition as an exploration property in 2006 our greenﬁeld 
exploration programme is focused on prospecting for new 
precious metals deposits with a potential resource base 
sufﬁcient in grade and size to justify construction of a 
standalone mine such targets are set to form the next 
generation of our growth assets and ensure company’s 
longterm growth prospects
the most signiﬁcant exploration targets include
01 svetloye
svetloye is located 220 km south west of okhotsk in an 
undeveloped and sparsely populated region openpittable 
inferred resources of 41 mt at 59 gt for 08 moz of contained 
gold to a depth of 100 m mineralised potential of the zone 
inclusive of resources is estimated at 3040 mt at 1822 gt 
for 225 moz of gold internal nonjorc estimate
in 2012 we have performed technological mapping and bulk 
lab sampling in the elena and emi zones and the ores were 
determined to be suitable for heap leaching prospecting at  
the southwest ﬂank of the emi zone continued to delineate  
the zone and identify potential additional resources in the 
elena zone inﬁll drilling has started in order to prepare for 
reserve estimation we have also commenced construction  
of the winter road from svetloye to unchithe nearest seaport 
for delivery of fuel and inventories
currently the metallurgical test work to determine viability of 
heap leaching is continuing with a reserve estimate for the bulk 
heap leach processing option targeted for the fourth quarter  
of 2013 the deposit could deliver potential annual gold 
production of 100150 koz at full capacity should the decision 
to develop the heap leaching be taken
02 kutyn
kutyn a licence area located 113 km northeast of albazino 
currently has openpittable inferred resources of 55 mt at  
41 gt for 07 moz of contained gold to a depth of 140240 m 
only 25 of the 120 km
2
 licence territory has been tested by 
drilling the mineralised potential of the zone inclusive of 
resources is estimated at 1015 mt at 2535 gt for  
112 moz of gold internal nonjorc estimate
this deposit has two types of ore – oxidised and sulphide and 
an intensive exploration programme is under way with 11 km 
drilled in 2012 and a further 23 km planned for 2013 in 2012 
we continued prospecting in the geoﬁzicheskaya 
sedlovinnaya yubileynaya and delinskaya zones and started 
preparation of a temporary winter road for fuel and inventory 
supply the additional mineralised potential identiﬁed as a 
result of the 2012 drilling campaign comprised 06 moz  
of gold contained in 2012 we also started inﬁll drilling  
at the sedlovinnaya zone in order to delineate the oxidised  
ore body and start preparation for trial openpit mining
in the coming year we will be continuing drilling activities 
across the deposit to establish resources with a focus on the 
sedlovinnaya zone which is most promising for heap leaching 
after completion of the 2013 exploration season we are 
planning to produce an initial jorc reserve estimate with 
either heap leach or cip plant on site options to be examined 
for the oxidised ore based on current assessment of the 
oxidised resources 100150 koz of annual gold equivalent 
production could be achieved from 2017 
03 tamunier
located in the sverdlovsk region of russia the tamunier 
licence covers 23 km
2
 tamunier is located in a historical 
mining area with good infrastructure and the project is 
accessible by yearround gravel road the nearest paved  
road is 5 km away a 110kv power line is 18 km away  
and the nearest railway spur is 41 km away
following geophysical and geochemical studies and the drilling 
of 155 prospecting holes we have drilled 129 exploration 
diamond holes the new holes are up to 200 m depth from the 
surface with 100 m x 50 m and 50 m x 25 m drill patterns in 
2012 an initial jorc resource estimate was prepared for the 
deposit of 50mt at 12 gt gold further substantial exploration 
potential has been identiﬁed with ongoing exploration seeking 
to expand and upgrade the resource estimate however the 
tamunier project does not ﬁt with our strategy of concentrating 
on highergrade assets and we will therefore consider a sale 
or partnership to advance the development of the asset
04 maminskoye purchased in april 2013
maminskoye is located in the sverdlovsk region of russia 
approximately 70 km from the regional capital ekaterinburg 
and 30 km from the city of kamenskuralsk population 
130000 our voro mine is approximately 450 km to the north 
the 178 km
2
 licence area is accessible by a paved highway 
and is adjacent to a 10 kv power line the maminskoye licence 
area covers a 1205 ha 2978 acre site which includes the 
potential mine processing facilities and waste rock stockpile
probable ore reserves at maminskoye have been estimated  
by snowden in accordance with jorc guidelines at 122 mt  
of ore at 19 gt gold representing 07 moz of contained gold 
mineral resources additional to reserves were estimated at  
51 mt at 19 gt representing 03 moz of contained gold 
these estimates were prepared for the previous owner and are 
based on construction of a cip mill on site ore bodies have 
been drilled out to a depth of 200250m and remain open at 
depth and along strike in one direction 
one of our exploration teams at work in tamunier the svetlobor exploration area sverdlovsk region 
pursuing standalone 
exploration projects 
china
north 
korea
south 
korea
japan
finland
russia 
kazakhstan
st  petersburg
moscow 
petrozavodsk  
elmus
tamuner
ekaterinburg
svetlobor
maminskoye

voro
podolsky
varvara
kostanay 
astana 
svetloye
avlayakankirankan
kutyn
omolon hub
dukat hub
khakanja hub
amursk pox hub
evensk
burgali
olcha

magadan

okhotsk
ozerny

komsomolskonamur
kundumi

khabarovsk

02
01
03
04
05
map key
hub
potential hub
standalone  
mining operation
standalone  
exploration projects
 town
we believe that heap leaching is the preferable option to treat 
mineralised material at maminskoye as it is expected to be 
signiﬁcantly less capital intensive and likely to result in lower 
unit operating costs lower costs in turn may permit 
expansion of both resources and reserves extensive test work 
is ongoing to determine the optimum parameters crushing size 
and stacking height for heap leaching scoping studylevel 
estimates indicate the potential for a 23 mtpa operation 
yielding 80120 koz of gold per year
05 elmus
the elmus licence area covers 188 km
2
 in the republic of 
karelia in northwest russia and was acquired in 2011  
during 2012 exploration season new areas of mineralisation 
were discovered and several intercepts were identiﬁed 
 gavshlamonya – 116 gt at 1 m 29 gt at 29 m
 talpus – 31 gt at 119 m and 155 gt at 67 m
the anomalies identiﬁed in the above zones support their 
further strong exploration potential
prospecting started at a new semchenskaya area where  
a major drilling campaign is scheduled for 2013
exploration activities
business review
annual report 2012 polymetal international plc 61 60 polymetal international plc annual report 2012 strong ﬁnancial 
performance
highlights
financial highlights
 revenue in 2012 increased by 40 to us1854 million compared to 2011 ‘yearonyear’ driven mostly by a 33 increase  
in gold equivalent sold in addition to robust production growth metal sales in 2012 exceeded production for both gold and 
silver mainly due to destockpiling of concentrate inventories at dukat
 group total cash cost
1
 was us703ge oz and remained almost ﬂat compared to the 2011 level of us701ge oz as a  
result of intense management focus on cost control and despite external and inﬂationary cost pressures strong operating 
performance resulting in increased average grade processed and increased volumes coupled with moderate russian rouble 
depreciation against the us dollar offset the combined impact of domestic inﬂation and adverse movement in the goldsilver 
price ratio
 allin cash costs
1
 comprised us1047ge oz a 15 decrease yearonyear driven mostly by reduction in capital expenditure 
at our operating mines and stable total cash costs
 adjusted ebitda
1
 grew by 47 to us918 million ahead of revenue growth adjusted ebitda margin was up by 3 pp to 50
 net earnings were us401 million up 38 yearonyear driven by the strong increase in adjusted ebitda net earnings were 
negatively affected by additional tax provisions booked in respect of prior years and 2012 in the amount of us116 million 
which are not expected to be recurring 
 pretax return on capital employed roce
1
 was 22 and aftertax return on equity roe
1
 was 20 increasing from  
18 and 18 respectively and marking the improved capital efﬁciency of the group basic eps was us103 per share 
increasing 30 yearonyear
 a ﬁnal dividend of us031 per share a total of us119 million in respect of fy 2012 representing 30 of net earnings is 
proposed by the board in accordance with the new dividend policy
 net operating cash ﬂow more than doubled to us496 million while capital expenditures declined 24 to us351 million 
resulting in a total positive free cash ﬂow
1
 of us139 million in 2012
 group’s liquidity proﬁle remains comfortable with net debtadjusted ebitda further reduced from 14 as at ye 2011  
to 11 as at 31 december 2012 with 59 of borrowings being longterm
note
1
  the deﬁnitions and calculations of nonifrs measures used in this report including adjusted ebitda total cash costs allin cash costs roce roe  
dividend payout ratio net debt free cash ﬂow and the related ratios are detailed on pages 6875 of this section
financial highlights 
2012 2011

change
1
revenue usm 1854 1326 40
total cash cost usge oz 703 701 0
allin cash cost usge oz 1047 1231 15
adjusted ebitda usm 918 624 47
adjusted ebitda margin  50 47 3 pp
average realised gold price usoz 1 631 1 555 5
average lbma gold price usoz 1 668 1 572 6
average realised silver price usoz 300 340 12
average lbma silver price usoz 311 353 12
net earnings usm 401 290 39
roce  22 18 4 pp
roe  20 18 2 pp
basic eps usshare 103 079 30
dividend declared during the year usshare 07
2
– na
net debt usm 1 037 879 18
net debtadjusted ebitda 11 14 20
net operating cash ﬂow usm 496 212 134
capital expenditure usm 351 462 24
free cash ﬂow usm 139 260 na
notes
1
   changes can be different from zero even when absolute amounts are unchanged because of rounding likewise  changes can be equal to zero when absolute amounts 
differ due to the same reason this note applies to all the tables 
2
  final dividend proposed in respect of 2011  special dividend declared in december 2012
market summary
precious metals
the precious metals price dynamics in 2012 were mixed and continued to be largely driven by investment demand the 
continued monetary easing in the us and europe as well as uncertainty over the future of the eurozone were the main drivers 
moderately pushing the gold price up in the ﬁrst nine months of the year to a high of us1790oz recorded in the beginning of 
october although there was signiﬁcant volatility in gold prices in the middle of the year subsequently the gold price went down 
on the back of improving macroeconomic statistics from the us which triggered doubts over the continuation of the quantitative 
easing policy of the federal reserve as a result the average gold price in 2012 was us1668oz up 6 compared to 2011
silver price dynamics generally followed gold also displaying signiﬁcant volatility during the year however the average price level 
of us311oz was 12 lower yearonyear after abnormal spikes in 2011 the average goldsilver price ratio decreased from 
451 in 2011 to 541 in 2012 a level close to the longterm average 
foreign exchange
the group’s revenues and the majority of its borrowings are denominated in us dollars while the majority of the group’s costs 
are denominated in russian roubles therefore changes in exchange rates are affecting its ﬁnancial results and performance 
both yearend and average rubus exchange rates have decreased during the year resulting in moderate strengthening  
of the rouble against us dollar the average rate decreased by 3 from 3188 rubus in 2011 to 3109 rubus in 2012  
the yearend rate was 3037 rubus representing a 6 strengthening compared to the beginning of the year during the  
year the exchange rate was subject to a greater volatility with a signiﬁcant rouble strengthening in the ﬁrst quarter followed  
then by depreciation in the second quarter with lowest level of 3404 rubus in june in the second half of the year  
the rouble strengthening resumed driven by tight liquidity conditions and stable oil prices
1400
1500
1600
1700
1800
1900
03
dec
12
03
nov
12
03
oct
12
03
sep
12
03
aug
12
03
jul
12
03
jun
12
03
may
12
03
apr
12
03
mar
12
03
feb
12
03
jan
12
precious metals market summary   
 gold  silver  goldsilver
gold price usoz silver price usoz and goldsilver price ratio
10
20
30
40
50
60
70
business review
annual report 2012 polymetal international plc 63 62 polymetal international plc annual report 2012
business review 
financial review key operating statistics 
year ended  
december 31
2012 2011
 
change
waste mined kt 85173 80683 6
underground development m 46717 35150 33
ore mined kt 12591 11002 14
 openpit 10937 9636 14
 underground 1654 1366 21
ore processed kt 9925 8821 13
average ge grade in ore processed gt 44 38 15
production 
 gold koz 589 443 33
 silver moz 265 199 33
 copper kt 6567 6915 5
gold equivalent koz
1
1063 810 31
sales 
 gold koz 593 448 32
 silver moz 278 17 0 63
 copper kt 7011 6363 10
 gold equivalent koz
2
1136 851 33
headcount
3
8993 8050 12
notes
1
 based on 160 agau and 51 cuau conversion ratios
2
 based on actual realised prices
3
 average for the period
revenue
2012 2011
 
change
sales volumes
gold koz 593 448 32
silver moz 278 17 0 63
copper kt 7011 6363 10
gold equivalent sold
1
koz 1136 851 33
1
 based on actual realised prices
strong ﬁnancial 
performance
continued
sales by metal
us million unless otherwise stated 2012 2011
 
change
volume 
variance 
usm
price 
variance 
usm
gold 966 697 39 224 45
average realised price usoz 1631 1555 5
average lbma closing price usoz 1668 1572 6
share of revenues  52 53 
silver 833 580 44 366 113
average realised price usoz 300 340 12
average lbma closing price usoz 311 353 12
share of revenues  45 44 
copper 53 46 15
share of revenues  3 3 
total metal sales 1852 1323 40 442 87
other revenue 2 3 39
total revenue 1854 1326 40  
in 2012 revenue grew by 40 yearonyear to us185 billion driven mostly by 33 growth in gold equivalent metal sold to 
1136 koz gold sales volume was up by 32 and silver sales were up by 63 yearonyear on the back of production growth 
of 33 and 33 respectively sales of both gold and silver exceeded production with a notable excess in silver by 29 moz 
driven by destockpiling of saleable concentrates at dukat growth in gold equivalent sales was less due to adverse movement 
in goldsilver ratio in 2012 compared to 2011 refer to market summary on page 63
the average realised price for gold was us1631oz up 5 yearonyear and in line with market price of us1668oz  
the average realised silver price was us300oz 12 lower yearonyear also closely reﬂecting market price movements
the share of gold in total revenue declined from 53 in 2011 to 52 in 2012 while the share of silver grew from 44  
to 45 this was due to more signiﬁcant increases in silver sales offsetting changes in goldsilver price ratio from 145  
to 154 yearonyear
dukat continues to be the largest segment of the group with a 36 share in total revenue in 2012 dukat demonstrated robust 
growth of 26 driven by a 45 increase in silver equivalent sold among other mature mines only voro experienced a slight 
reduction of revenue of 4 due to lower production driven by a moderate decrease in average grades processed other mines 
varvara and khakanja performed strongly in line with their production growth omolon having successfully reached full capacity 
with processing of highgrade ore from sopka achieved a more than fourfold increase in revenues yearonyear and contributed 
16 of the group’s total revenue at albazino revenue grew to us99 million a more than twofold increase driven by full 
rampup of the mine and successful sales of concentrates to thirdparty offtakers in q2 and q3 in 2013 we expect further 
signiﬁcant growth on the back of rampup of the amursk pox plant combined with additional offtake sales
revenue by segment us million 
 dukat voro khakanja varvara omolon albazinoamursk
2011 2012
1326
1854
40
36
15
16
12
16
5
21
16
14
6
3
business review
annual report 2012 polymetal international plc 65 64 polymetal international plc annual report 2012
business review 
financial review cost of sales 
us million 2012 2011

change
onmine costs 405 320 27
smelting costs 336 264 27
purchase of ore from third parties 33 17 94
mining tax 121 97 25
total cash operating costs 894 698 28
depreciation and depletion of operating assets 202 140 44
rehabilitation expenses 4 4 8
total costs of production 1100 842 31
increase in metal inventories 224 215 4
writedown to net realisable value 11 6 78
total change in metal inventories 213 209 2
cost of other sales 2 3 26
total cost of sales 890 635 40
cash operating cost structure
2012
usm
2011
usm

change
consumables and spare parts 276 228 21
services 299 218 37
labour 157 130 21
other expenses 8 8 8
purchase of ore from third parties 33 17 94
mining tax 121 97 25
total cash operating costs 894 698 28
total cost of sales grew by 40 in 2012 to us890 million mostly driven by volumebased factors ore mined grew  
by 14 and ore processed grew by 13 key external cost drivers included the domestic inﬂation in russia 66 in 2012  
the increased operating asset base which now fully includes omolon and albazino contributed 25 pp of the 40 increase  
while volume growth at other mines and inﬂationary factors made up another 15
 
the cost of services consumables and spare parts grew by 37 and 21 respectively mainly affected by mining and 
processing volume increases 14 and 12 respectively speciﬁc cost increases in 2012 compared to 2011 were related  
to increased share of remote mines in total production as a result of full rampup at omolon and albazino both with higher 
logistics and power generation costs speciﬁc cost increases include ore haulage costs at omolon and concentrate 
transportation costs at albazino and increased underground development at dukat hub 53 yearonyear
the total cost of labour within cash operating costs in 2012 was us157 million a 21 increase this mainly stemmed from 
growth in the average number of employees directly involved in production by 8 as well as a review of the staff pay levels 
which are linked to the russian cpi at our operating mines 66 in 2012 
cost of purchase of ore from third parties increased by 94 to us33 million in 2012 mainly as a result of increased volumes  
of ore purchases at varvara allowing us to leverage the existing processing capacity at the leach circuit and contribute  
additional margin
mining tax represents a consistent 14 share of total cost of sales in both 2012 and 2011 and increased by 25 to us121 million 
driven by revenue growth
depreciation and depletion was us202 million up 44 yearonyear as the group continued to commission new mining and 
processing assets most importantly at albazino omolon and amursk pox out of us202 million an amount of us51 million 
of the depreciation charges was included in metal inventory mainly in ore and concentrate stockpiles at omolon and albazino 
respectively
in 2012 our metal inventories increased by us224 million this increase was mainly represented by concentrate produced at 
albazino awaiting processing at amursk pox and further sales to offtakers and ore stockpiled at omolon mainly represented 
by lowgrade heap leach ore at birkachan and sopka and khakanja ore from avlayakan and ozerny awaiting transportation for 
further processing at khakanja plant the concentrate stockpile is set to reduce as soon as the amursk pox plant is fully 
ramped up expected in 2013 the drawdown of lowgrade ore at omolon is expected as soon as heap leaching is started in 
2013 at birkachan and in 2016 at sopka ore stockpiles at avlayakan and ozerny are largely seasonal – with avlayakan ore 
transported during summer navigation and ozerny ore transported in the beginning of the calendar year by winter road
general administrative and selling expenses
us million 2012 2011

change
labour 92 72 28
sharebased compensation 54 57 5
services 18 15 26
depreciation 4 4 8
other 12 12 1
total 182 160 14
general administrative and selling expenses grew by 14 yearonyear from us160 million to us182 million the key 
component of the increase was labour costs of us92 million with the growth driven mainly by scheduled increases in 
administrative personnel at the new mines including amursk pox and mayskoye and as a result of regular salary reviews
other expenses
us million 2012 2011

change
taxes other than income tax 14 11 26
additional mining taxes penalties and accrued interest 66 – na
listing expenses – 10 100
exploration expenses 33 30 9
social payments 11 9 21
housing and communal services 8 6 24
loss on disposal of property plant and equipment 9 6 50
bad debt allowance 0 1 123
other expenses 13 7 77
total 154 78 96
other expenses grew from us78 million in 2011 to us154 million in 2012 the increase was attributed to additional mining tax 
charges for prior years including penalties and accrued interest of us66 million recorded by the company in relation to several 
tax claims by the russian tax authorities after relevant court decisions were made for more information refer to page 71 and  
note 13 of the consolidated unaudited ﬁnancial statements other components of other expenses demonstrated moderate 
increases on the back of increased production a larger asset base and general cost inﬂation
cash operating cost structure us million  
 consumables and spare parts services labour  
 other expenses purchase of ore from third party mining tax
2011
31
33
18
1
4
14
33
31
19
1
2
14
2012
698
893
strong ﬁnancial 
performance
continued
business review
annual report 2012 polymetal international plc 67 66 polymetal international plc annual report 2012
business review 
financial review total cash costs by mine
cash cost per ge ounce  
usoz
gold equivalent sold koz
silver for dukat
total cash costs per gold equivalent ounce
1 2012 2011
 
change 2012 2011
 
change
dukat silver equivalent 121 140 13 22565 15546 45
voro 559 553 1 161 176 8
khakanja 614 672 9 180 138 31
varvara 804 747 8 135 120 12
total – mature operations 655 642 2 890 774 15
omolon 918 1481 38 177 46 285
albazino 767 1018 25 69 31 119
total – new operations 876 1294 32 246 77 218
total 703 701 0 1136 851 33
1
  total cash costs comprise cost of sales of the operating assets adjusted for depreciation expense rehabilitation expenses and writedown of inventory to net realisable  
value and certain other adjustments and general administrative and selling expenses of the operating assets gold equivalent sales volume calculation is based on average 
realised metal prices in the relevant period total cash cost per gold equivalent ounce sold is calculated as total cash costs divided by total gold equivalent unit ounces sold 
in 2012 the company demonstrated strong cost performance on the back of solid production results and successful rampup  
of the new mines omolon and albazino total cash costs per gold equivalent ounce sold tcc in 2012 were us703ge oz 
and remained almost unchanged compared to 2011 demonstrating the company’s strong focus on cost control despite the 
external pressures 
the table below summarises major factors that have affected the group’s tcc dynamics yearonyear
reconciliation of tcc movements
usoz
  
change
total cash cost per gold equivalent ounce – 2011 701
domestic inﬂation 23 3
us rate change 37 5
mining tax change – auag price 20
auag ratio change 59 8
change in average grade processed by mine 19 3
change in recovery rate 18 3
change in share of sales between mines
2
 15 2
other 24 3
total cash cost per gold equivalent ounce – 2012 703 0
2
  effect of mix change between mines with different cost levels
total cash cost by mine 
 dukat’s total cash cost per silver equivalent ounce sold decreased by 13 yearonyear to us121ageq oz sustainable 
improvement in both grades and recoveries resulting in 13 growth in silver production more than offset signiﬁcant increases 
in underground development and increases in electricity tariff rates and other external factors
 at voro tcc in 2012 was us559ge oz just 1 above the 2011 level of us553ge oz the robust operating performance 
at voro with stable grades throughput and recoveries at both heap leach and cip circuits fully offset the external cost 
inﬂation drivers
 khakanja’s tcc was us614ge oz a 9 decrease yearonyear this superior cost performance was mainly driven by 
signiﬁcant improvement in average grade processed from 74 gt to 94 gt yearonyear as the plant treated higher gold 
grade ore from yurievskoye and high silver grade ore from deep levels of khakanja’s pit 3 due to scheduled reduction in 
average grade processed in 2013 completion of mining at yurievskoye pushback at pit 1 at the main khakanja deposit  
and higher share of remote mines in ore processed avlayakan and ozerny we expect cost levels at khakanja in 2013  
are set to increase over 2011 levels
 at varvara tcc was us804ge oz growing by 8 yearonyear the growth was mainly driven by increased purchases  
of thirdparty ore combined with reduction of copper production due to scheduled grade decline
 at omolon total cash costs reduced by a notable 38 to us918ge oz as the processing hub reached its design capacity 
and processed signiﬁcant volumes of highgrade ore from sopka however cost levels at omolon remained above average  
for the group’s assets due to a higher stripping ratios in 2012 driven by massive stripping campaigns at birkachan and  
sopka deposits and by commencement of mining at tsokol b reallocation of costs from lowgrade stockpiles to highergrade 
current feed at sopka and birkachan as a result of reﬁnements in cost allocation models undertaken by the yearend
 at albazinoamursk hub tcc was us767ge oz which is 25 lower compared to 2011 as the mine and concentrator has 
ramped up to the design throughput combined with improved recoveries and grades however due to slower than expected 
rampup of the amursk pox the company had to reallocate signiﬁcant volumes of concentrate produced to thirdparty 
offtakers in china resulting in total cash cost level which is higher than the average expected over the life of mine we expect 
further signiﬁcant improvement in total cash costs at albazinoamursk in 2013 upon full rampup of the amursk pox to its 
design throughput and recovery
allin cash costs
2012 2011
 
change
usm
us 
ge oz usm
us 
ge oz
 for 
us 
ge oz
total cash costs 798 703 596 701 0
sga and other operating expenses not included in tcc 143 126 107 125 1
capital expenditure excluding new projects 179 157 278 327 52
exploration expenditure capital and current 68 60 66 78 23
allin cash costs 1189 1047 1048 1231 15
polymetal in line with the industry best practices will from now on report an additional cost metric – ‘allin cash costs’ – which  
is intended to include all ongoing operating and capital expenditure of the group excluding only capital expenditure on separate 
growth projects we believe that allin cash costs are an important metric to analyse the cash ﬂow generation capacity in our 
capitalintensive sector
allin cash costs are comprised of
 total cash costs current conventional deﬁnition
 all selling general and administrative expenses for operating mines and head ofﬁce not included in tcc mainly represented  
by head ofﬁce sga
 other expenses excluding writeoffs and noncash items in line with the methodology used for calculation of adjusted  
ebitda and
 current period capex for operating mines ie excluding new project capex but including all exploration expenditure  
both expensed and capitalised in the period and minor brownﬁeld expansions
allin cash costs in 2012 and 2011 include total capital expenditure for omolon and albazino from the start of commercial 
production at those mines despite some of the capital spending being related to plant expansion andor completion of the major 
construction projects this approach was taken to ensure transparency of the allin cash costs calculation
total cash costs usge oz
per silver equivalent ounce sold for dukat gold equivalent ounce sold 
for all operations and totals
 2011  2012
dukat voro khakanja varvara omolon total albazino total
new
operations
total
mature
operations
140
121
553 559
672
614
747
804
642 655
1481
918
1018
767
1294
876
701 703
strong ﬁnancial 
performance
continued
business review
annual report 2012 polymetal international plc 69 68 polymetal international plc annual report 2012
business review 
financial review allin cash costs in 2012 were us1047ge oz a 15 decrease yearonyear driven mostly by reduction in capital expenditure 
at our operating mines and stable total cash costs
adjusted ebitda and ebitda margin
1
 
reconciliation of adjusted ebitda
us million 2012 2011
 
change 
net earnings 401 290 38
finance cost net 22 25 10
income tax expense 216 119 82
depreciation and depletion 156 97 62
ebitda 796 530 50
sharebased compensation 54 57 5
exchange gainslosses 7 14 149
listing expenses – 10 100
change in fair value of contingent liability 5 7 31
rehabilitation costs 4 4 8
writedown of inventory 11 6 78
change in fair value of derivatives – 2 100
gain on acquisition of remaining interest in joint venture and lossproﬁt on disposal of subsidiaries 10 5 110
additional mining taxes penalties and accrued interest
2
 66 – na
adjusted ebitda 918 624 47
adjusted ebitda margin 50 47 3pp
adjusted ebitda by segment
us million 2012 2011
 
change 
dukat 378 282 34
voro 174 175 1
khakanja 178 113 57
varvara 100 91 10
omolon 124 5 nm
amursk hub including albazino and mayskoye 23 6 nm
corporate and other and intersegment operations 59 36 61
total 918 624 47
1
  the company deﬁnes adjusted ebitda a nonifrs measure as proﬁt for the period adjusted for depreciation expense rehabilitation expenses writedown of inventory  
to net realisable value sharebased compensation listing expenses additional mining taxes penalties and accrued interest gains and losses on acquisitions and disposals 
foreign exchange gainloss change in fair value of derivatives change in fair value of contingent consideration ﬁnance income ﬁnance costs and income tax expense 
adjusted ebitda margin is adjusted ebitda divided by revenue the ﬁgures presented above have been rounded and accordingly may not sum to the total shown
 
2
  these additional charges principally relate to interest and penalties on lost tax litigation and cumulative mineral extraction tax exposures which do not meet the deﬁnition  
of a tax for accounting purposes see page 67
in 2012 adjusted ebitda grew by 47 to us918 million ahead of revenue growth with adjusted ebitda margin reaching 
50 the key growth and proﬁtability drivers were production growth reduction of cost levels at our growth projects omolon 
and albazino and excellent operating and cost performance at dukat and khakanja adjusted ebitda at dukat grew by 34  
to us378 million at khakanja by 57 to us178 million omolon and amursk pox hub excluding mayskoye contributed 
us124 million and us35 million respectively 
other income statement items
foreign exchange differences in 2012 resulted in a net gain of us7 million versus a us13 million loss in 2011 these gains
losses are unrealised noncash items and represent the appreciationdepreciation of the group’s mostly us dollar denominated 
borrowings against the russian rouble the functional currency of the group the us60 million noncash net foreign exchange 
loss recorded in 1h 2012 due to devaluation of the russian rouble in mayjune 2012 was more than offset by subsequent 
appreciation in the second half of the year
the company does not use any hedging instruments for managing foreign exchange risk other than a natural hedge arising 
from the fact that the majority of the group’s revenue is denominated or calculated in us dollars though income statement 
volatility may arise in the ﬁnancial reporting the company believes that the underlying matching of revenue cash ﬂows against 
debt repayments and related interest represents an economically effective hedging strategy
a us10 million net gain on acquisition and disposal of subsidiaries was recorded in 2012 mainly as a result of transactions with 
the group’s holding in amikan holding limited which owns the veduga gold deposit in the krasnoyarsk region of the russian 
federation the group has initially consolidated 100 holding in amikan previously held in joint venture with anglogold ashanti 
holdings and then formed a new entity polygon gold inc in which it currently owns 426
additional mining and proﬁt tax charges and provisions
in 2012 the group lost two court cases in respect of its tax litigations related to prior periods at dukat magadan silver and 
varvara resulting in us295 million and us231 million of additional taxes paid during the year respectively
further there is an ongoing litigation at dukat cjsc magadan silver where the application of technical loss limits applied in the 
calculation of mineral extraction tax has been challenged by the tax authorities the group assesses the probability of additional 
taxes to be accrued as high and accordingly has created provisions for the tax exposure in the amount of us92 million
none of the above provisions or additional taxes is expected to be recurring andor to signiﬁcantly affect the group’s future 
effective tax rate
the group has also provided for a number of other tax exposures in the amount of us366 million in respect of other taxes  
it considers likely to be payable and us171 million in respect of excess proﬁt tax in kazakhstan
the additional taxes paid or accrued as at 31 december 2012 are summarised below
magadan 
silver 
case
varvara 
case
technical 
loss limits
excess proﬁt 
taxes in 
kazakhstan
other tax 
exposures total
total additional tax exposures 295 231 92 171 366 1155
settled during 2012 295 231 – – – 526
provisions for tax exposures made at 31 december 2012 – – 92 171 366 629
total additional tax exposures 295 231 92 171 366 1155
 included in other operating expenses 150 101 92 – 316 659
 included in income tax expense 145 130 – 171 50 496
adjusted ebitda margin  
 2011 2012
dukat voro khakanja varvara omolon total albazino
amursk
ex mayskoye
53
56
63
65
53
59
50
47
7
42
10
33
47
49
strong ﬁnancial 
performance
continued
business review
annual report 2012 polymetal international plc 71 70 polymetal international plc annual report 2012
business review 
financial review net earnings earnings per share and dividends
proﬁt before tax in 2012 was us617 million up 51 compared 2011 exceeding the adjusted ebitda growth mostly due to 
positive impact of the foreign exchange gainslosses the group’s effective income tax rate in 2012 was 35 up from 29 in 
2011 this is mainly due to the fact that it includes us496 million of additional proﬁt tax charges see page 71 the effective tax 
rate for the reporting period which excludes additional mining and income tax charges see page 71 was 243 the difference 
between this rate and the statutory proﬁt tax rate of 20 arises mainly from nondeductible expenses most importantly 
sharebased compensation a noncash item us54 million in 2012
as a result net proﬁt for the year in 2012 was us401 million up 38 from the us290 million in 2011 basic earnings per share 
were us103 up 30 yearonyear return on equity roe and return on capital employed roce increased to 20 and 
22 in 2012 from 18 and 18 in 2011 respectively demonstrating the increased capital discipline and operating efﬁciency  
of the group
in accordance with the new dividend policy revised in october 2012 the board proposes a ﬁnal dividend of us119 million  
or us031 per share representing 30 of the group’s net proﬁt for the year attributable to the equity holders of the company 
in addition to that a special dividend of us191 million or us050 per share was declared in december 2012 and paid  
in january 2013 with the two dividend payments taken together the group’s payout ratio
1
 increases dramatically from 26  
in 2011 to 79 in 2012
1
 dividend payout ratio is total dividends declared in relation to the ﬁnancial period divided by net proﬁt attributable to equity holders of the company
capital expenditure
us million 2012 2011
 
change 
amurskalbazino 79 133 41
mayskoye 66 85 22
omolon 40 68 41
dukat 49 55 10
khakanja 20 20 1
voro 11 13 10
varvara 16 15 6
corporate and exploration 77 79 3
capitalised interest 14 12 16
total capital expenditure
2
372 479 22
2
 total capital expenditure includes amounts payable at the end of the period on a cash basis capital expenditure was us351 million in 2012 2011 us462 million
in 2012 total capital expenditure was us372 million down 22 yearonyear which reﬂects the completion of several major 
group investment projects in 2011 including construction of albazino and amursk pox and expansion at omolon the only 
continuing major project in 2012 was the construction of mayskoye which is on track to be completed in april 2013 capital 
expenditure exceeded the group’s original target mainly due to accelerated development at the group’s new growth  
projects albazino2 kutyn svetloye and additional expenses incurred during rampup of the amursk pox plant
the major capital expenditure items in 2012 were
 us79 million were invested at albazinoamursk most importantly in commissioning activities at pox 60 of total and 
drilling and underground exploration drift at the newly discovered ore bodies in the licence area albazino2 27 of total  
and infrastructure development at albazino allyear round access road explosives plant etc
 us66 million was spent on construction of the processing plant and underground mine at mayskoye where the group  
is targeting completion in april 2013 the investments in 2012 were concentrated on installation of equipment at the site  
mills ventilation piping power substation etc while the remaining activities in 2013 only include airlifting remaining auxiliary 
equipment and its installation
 us40 million was invested in the omolon hub operations the expenditure in 2012 mainly represented expansion of the hub’s 
mining ﬂeet with growing mining and stripping volumes at birkachan and sopka 46 of total spending and development of 
tsokol mine 4 of total in addition the construction of an allyearround heap leaching facility at birkachan commenced in 
2012 19 of total
 capital expenditure at dukat was us49 million a 10 decrease the expenditure apart from mining ﬂeet upgrades and 
maintenance capex mainly comprises expansion of underground operations development at dukat lunnoye goltsovoye 
totalling approximately 20 of capital expenditure and maintenance at the omsukchan concentrator approximately 14
 us20 million was invested in the khakanja hub representing mainly development of a new mine at ozerny where mining 
started in q4 2012
 voro and varvara’s capital expenditures in 2012 were less signiﬁcant and mainly represented routine maintenance investment 
and upgrades to the mining ﬂeet and the total amount remained slightly below 2011 level at us27 million
 the company continues to actively invest in greenﬁeld and brownﬁeld exploration included in corporate segment capital 
expenditure on exploration in 2012 was us68 million and focused on key advanced targets such as the expansion of 
albazino us8 million in 2012 inﬁll drilling at mayskoye prior to start of stoping and development of kutyn us4 million 
and svetloye us5 million our two greenﬁeld projects with highest potential
 total capital expenditure in 2012 includes us14 million of capitalised interest 2011 us12 million
 in addition to capital expenditure additions to property plant and equipment in the ﬁnancial statements also include asset 
purchases during the year in the total amount of us12 million the most signiﬁcant being the acquisition of svetlobor platinum 
project see page 26
capital expenditure us million 
 amurskalbazino mayskoye omolon dukat khakanja  
 voro varvara corporate and exploration capitalised interest  
2011 2012
479
372
79
66
40
49
20
11
16
77
14
133
85
68
55
20
13
15
79
12
strong ﬁnancial 
performance
continued
business review
annual report 2012 polymetal international plc 73 72 polymetal international plc annual report 2012
business review 
financial review cash ﬂows
us million 2012 2011
 
change 
operating cash ﬂows before changes in working capital 710 477 49
changes in working capital 215 265 19
total operating cash ﬂows 496 212 134
capital expenditure 351 462 24
other 6 11 44
investing cash ﬂows 357 472 24
financing cash ﬂows 
net decreaseincrease in gross debt 149 197 176
proceeds from the ipo – 763 – 
mto and squeezeout obligation repayment 569 – na
dividends paid 77 – na
other – 52 100
total ﬁnancing cash ﬂows 794 907 188
net decreaseincrease in cash and cash equivalents 655 647 na
cash and cash equivalents at the beginning of the year 659 11 5859
effect of foreign exchange rate changes on cash and cash equivalents 15 1 2433
cash and cash equivalents at the end of the year 19 659 97
operating cash ﬂows in 2012 strengthened dramatically supported by excellent operating results and consequent ebitda 
growth operating cash ﬂows before changes in working capital grew 49 yearonyear to us710 million net operating cash 
ﬂows more than doubled and comprised us496 million as a result of decreasing demand for working capital in 2012 19 
lower yearonyear 
investing cash ﬂows’ dynamics were mainly driven by decreasing capital expenditure down 24 from us462 million in 2011  
to us351 million in 2012 investment in the major growth projects omolon albazino and amursk pox is completing  
as a result free cash ﬂow
1
 was positive at us139 million in 2012 compared to a negative of us260 million in 2011
total cash and cash equivalents decreased from us659 million as at 31 december 2011 to us19 million as at 31 december 
2012 as a result of the following
 settlement of the mto obligation and further buyouts of the remaining shares in jsc polymetal totalling us569 million
 inaugural dividend payment of us77 million in june 2012 and
 net repayment of borrowings of us149 million during 2012
balance sheet
in 2012 the company recorded the following signiﬁcant movements of key balance sheet items
 net increase in current inventories of us261 million incurred mainly due to growth of lowgrade ore inventories at omolon  
and concentrate inventories at albazino awaiting further processing at the pox facility or sale to offtaker 
 net increase in current payables of us205 million mainly due to recognition of a dividend payment liability for special 
dividends of us191 million declared in december 2012 and the subsequently paid in january 2013 and
 full settlement of the mto obligation us534 million as at 31 december 2011 and additional repurchases of shares in jsc 
polymetal of us27 million during 2012 resulting in reduction of noncontrolling interest and share purchase obligation balances 
within equity and a corresponding net decrease in retained earnings balance attributable to the equity holders of the company
liquidity and funding
net debt
31 december 
2012
31 december 
2011
 
change
shortterm debt and current portion of longterm debt 244 348 30
mtosqueezeout obligation – 535 100
dividends payable 191 – na
longterm debt 620 655 5
gross debt 1055 1538 31
less cash and cash equivalents 19 659 97
net debt 1037 879 18
net debtadjusted ebitda 11 14 20
the group continues to maintain a safe liquidity and funding proﬁle underpinned by strong operating cash ﬂows and robust 
shortterm and longterm liquidity management policies
the group’s net debt stood at us1037 million as of 31 december 2012 representing a net debtadjusted ebitda ratio  
of 11 down 20 from 14 as at 31 december 2011 the decrease was a result of strong growth in operating cash ﬂows 
combined with completion of a major investment cycle and a corresponding decrease in capital expenditure 
the group continues to focus on building a healthy debt proﬁle which is comfortable both from the liquidity and cost 
standpoints the majority of our borrowings 59 were longterm as of 31 december 2012 while the average cost of debt 
remained at a low 31 in 2012 2011 32 supported by low base interest rates and our ability to negotiate competitive 
premiums on the back of the improved ﬁnancial position of the company and our excellent credit history 
2013 outlook
the ﬁnancial performance in 2013 will be driven by the following key factors
 the company is on track to deliver on its 12 moz of gold equivalent production guidance 
 our revenue base will be dependent on the gold and silver price dynamics currently demonstrating signiﬁcant volatility in 
response to uncertainty in the global ﬁnancial markets
 in the cost base while the appreciation of the russian rouble may have an adverse effect the continued increase in operating 
efﬁciency and throughput at the new mines most importantly albazinoamursk will serve as a key internal factor supporting 
the current cost levels and
 low capital requirements due to completion of all current major investment projects and resulting signiﬁcant free cash  
ﬂow generation
1
 free cash ﬂow is deﬁned as total operating cash ﬂows less investing cash ﬂows
strong ﬁnancial 
performance
continued
business review
annual report 2012 polymetal international plc 75 74 polymetal international plc annual report 2012
business review 
financial review business review 
risks and risk management
effective risk identiﬁcation  
and management
managing our risks well is critical  
to the longterm sustainability and 
success of the company we believe 
that delivery of sustainable value  
to our stakeholders should be based 
on effective risk identiﬁcation and  
an appropriate response to each risk
risk management process
polymetal’s risk management process is designed to minimise 
the potential threats to achieving our strategic objectives  
the process incorporates the following stages
 identiﬁcation and documentation of risks
 assessment qualiﬁcation and quantiﬁcation of each risk
 development and implementation of risk mitigation 
control strategies 
 monitoring reporting and reviewing risks and
 input of effective internal control procedures
the audit and risk committee of the board sets the agenda 
for the risk management policies and procedures of the group 
and is responsible for reviewing their effectiveness its duties 
include the review of
 policies and overall process to identify and assess  
business risks and manage their impact on the company 
and the group
 regular assurance reports from management internal audit 
external audit and others on matters related to risk and 
control and
 the timeliness of and reports on the effectiveness  
of corrective action taken by management
risk identiﬁcation
an awareness of risk is embedded within the group and is 
grounded in our strong ethical values and proactive corporate 
culture our risk management philosophy is driven by the 
company’s board of directors and runs through all our 
management employee and connected stakeholder  
activities – from developing strategy to daytoday operations 
risk management is one of the key functions of the audit  
and risk committee strategic risks are identiﬁed by the  
board based on a detailed understanding of the company  
its markets and the legal social political economic 
technological environmental and cultural environments  
in which we operate our risk identiﬁcation system considers 
not only single mutually exclusive risks but also multiple linked 
and correlated risks
risk matrices are used to record prioritise and track each risk 
through the risk management process these are regularly 
reviewed by the audit and risk committee
risk assessment
once identiﬁed potential risk factors are assessed to consider 
the impact consequences the event or events may have on 
achieving objectives and the likelihood probability of the event 
see table on top of page 77 together these create a risk proﬁle
risk response
when the appropriate ranking has been identiﬁed a response 
to each risk is formulated and implemented management 
assesses the effects of a risk’s likelihood and impact as well  
as costs and beneﬁts a response is then evaluated that brings 
the risk within acceptable tolerance levels
monitoring and reporting
ongoing monitoring processes are embedded in polymetal’s 
business operations these track the effective application of 
internal control and risk management policies and procedures 
including internal audit and speciﬁc management reviews  
risk matrices are used to reevaluate and adjust controls in 
response to changes in company’s objectives business and 
the external environment
management is responsible for the implementation of effective 
followup procedures to ensure appropriate actions occur  
in response to changes in risk and control assessments
impactﬁnancial consequences
us50m us50mus10mus10mus5mus5mus01mus01m
catastrophic
 signiﬁcant impact  
on strategy or  
operational activities
 multiple signiﬁcant 
stakeholder concern
major
 major impact on  
strategy  
or operational activities
 major stakeholder 
concern
moderate
 serious impact on 
strategy or operational 
activities
 moderate stakeholder 
concern
insigniﬁcant
 minimal impact on 
strategy or operational 
activities
 low stakeholder 
concern
minor
 minor impact on strategy  
or operational activities
 limited stakeholder 
concern
likelihoodprobability
almost certain 
occurs one or more times 
per year and is likely to 
reoccur within one year
likely 
occurs less than once  
a year and is likely to 
reoccur within ﬁve years
possible 
could occur or may  
reoccur at some point  
within 10 years
unlikely
has happened at some  
time or could happen  
within 20 years
rare
is highly unlikely  
that it could occur  
in the next 20 years
risk category risk description and potential effect risk response
1 
market risk
gold and silver price volatility can result in material and 
adverse movement in the group’s operating results 
revenues and cash ﬂows
movement in gold equivalent price for all metals produced 
of 10 will cause ebitda to increasedecrease by 
approximately 25 in accordance with group budgeted 
ﬁgures for 2013
the group monitors gold and silver prices on an ongoing basis 
the group has decided not to hedge gold prices in order to 
maximise the beneﬁts from the positive price trends in order  
to manage the risk of potential decline in the metal prices  
the group uses price conservative estimates for budgeting 
purposes usually below spot prices by 1020 and actively 
manages cutoff grades and mediumterm mine planning in 
response to changes in metal prices
2 
production risks
the risk of failure to meet the planned production 
programme
failure to meet production targets may adversely affect 
operating performance and ﬁnancial results of the group
annual quarterly and monthly production budgeting and 
subsequent monthly control against budget is designed to 
mitigate the risk the effectiveness and efﬁciency of the 
production process is ensured by the group’s engineering 
team senior management
21 
production risk –  
low gradepotential 
dilution of ore
the risk of lower than expected metal grade or dilution  
is caused by complex mining and geological conditions 
mainly at underground mines
an approved production programme includes increased 
volume of operational prospecting works such as inﬁll  
drilling and grade control sampling
22
production risk –  
ore and concentrate 
shipping
the company operates in remote locations that require 
complex and signiﬁcant transportation of ore and gold
silver concentrates most of which is conducted by third 
party contractors production targets may not be reached 
if any element of the logistics chain is disrupted in 2012 
some ore losses took place in transit from remote sites 
via sea routes
to mitigate the logistics risk the group invests considerable 
amounts into construction and maintenance of permanent  
and temporary winter roads at exploration and production 
sites the group exercises effective control over the whole 
logistics chain including selection and operation  
of contractors
23
production risk –  
supply chain risks
the group’s production activity depends heavily on the 
effectiveness of supply chains these might be negatively 
affected by complex logistics to remote locations and delays 
in construction and delivery of purchased mining and 
processing equipment or spare parts
the group has implemented and constantly improves the supply 
chain system to closely link the production demand of resources 
with inventory levels optimise the number of order placements 
and ensure the intime inventory and equipment delivery  
to production sites
24
production risk –  
low recovery rate 
recoveries at the group’s processing plants may not  
reach planned levels due to complex technological 
properties of ore processed
to mitigate the risk the group invests considerable amounts  
in ore quality assessment procedures and seeks to control  
ore quality by formation of ore stacks with the required 
characteristics
the use of such methods at the group’s production  
plants in 2012 was deemed effective it allows the company  
to reduce this type of risk to medium
 
25
production risk –  
construction and 
renovation
failure to meet return required from the major capital 
expenditure projects such as building new mines and 
processing facilities or production capacity increase
renovation at existing mines as a result of failure to meet 
project delivery timeline and budgets which can adversely 
affect the group’s ﬁnancial results cash ﬂow position  
and increase capital costs
most signiﬁcant ongoing projects include construction  
of mayskoye concentrator
the company implements global best practices in project 
management the group’s engineering team is responsible for 
the oversight of capital expenditure projects including project 
support coordination of service organisations contractors 
constructors and cooperation with regulatory bodies
signiﬁcant parts of exploration and development projects are 
performed by the group inhouse by polymetal engineering  
a subsidiary company with signiﬁcant expertise and track 
record of designing and commissioning mines and  
processing plants
on complex projects such as construction of the amursk 
pox plant the group employs world class consultants with 
recognised international experience
residual risk level
high  medium  low 
identify and 
document risks
assess quantify  
and classify  
each risk
monitor report 
and review risk
develop and 
implement  
risk mitigation 
strategies
1
2
3
4
business review
annual report 2012 polymetal international plc 77 76 polymetal international plc annual report 2012 risk category risk description and potential effect risk response
3
legal risk
operating in developing countries such as russia and 
kazakhstan involves the risk that changes in tax and 
other legislation may occur from time to time the most 
sensitive areas are regulation of foreign investments 
private property environmental protection and taxation 
in recent years however the governments of both  
russia and kazakhstan have become more consistent 
regarding the introduction of new regulations and taxes 
demonstrating awareness of investment climate issues 
however in the application of existing legislation requiring 
interpretation courts often uphold the more assertive 
position of the tax authorities which does not always 
coincide with the company’s position
polymetal has a successful track record of operating in both 
russian and kazakh jurisdictions having developed its own 
expertise in corporate tax licensing and other legal areas 
the group’s ﬁnancial and legal teams monitor current 
legislation and proposed changes and incorporate these  
into the practice
corporate and operating management teams are responsible 
for meeting the legal requirements in their operating activities 
head ofﬁce and onsite legal teams guarantee appropriate 
controls over compliance issues
the group takes into account the results of tax audits and 
court rulings when interpreting taxation rules and determining 
future tax positions
4
taxation risk
due to frequent changes in tax legislation in russia and 
kazakhstan lack of established practices in tax law 
means that additional costs such as taxes or penalties 
may occur
the taxation risk level correlates with the legal and  
political risks levels
the company’s policy is to comply fully with the requirements 
of the applicable tax laws providing adequate controls over 
tax accounting and tax reporting
given the prevailing practice accepted by arbitration tribunals 
when deciding on certain cases in tax disputes in 2012 as 
well as particular outcomes of tax disputes involving kazakh 
and russian subsidiaries of the group the tax risk is  
assessed as ‘high’
the consolidated ﬁnancial statements reﬂect provisions 
booked in connection with the company’s evaluation  
of tax risks
to date the company is not aware of any signiﬁcant 
outstanding tax claims which could lead to additional taxes 
accrued in the future except for amounts already booked  
or disclosed in the group’s ﬁnancial statements
5
mergers and 
acquisitions
the group invests considerable amounts in gold mining 
assets and operations in the russian federation and 
kazakhstan there is a risk of failure to achieve expected 
beneﬁts from any acquisition in the case of adverse 
changes in assumptions or inaccuracy of estimates made 
or where the information used for decision making was 
incomplete or inaccurate
failure to deliver expected beneﬁts from an acquisition 
can results in adverse ﬁnancial performance lower 
planned production volumes or problems with  
product quality
rigorous due diligence procedures are applied to the 
evaluation and execution of all acquisitions to assess the 
consequences of the acquisition based on economic 
ecological political and social factors
board andor shareholder approval is required for  
any acquisition 
6
environmental risks
environmental damage may arise from operations 
including air and water pollution from toxic waste  
waste storage and recycling is subject to government 
regulation potential impacts include ﬁnes and penalties 
statutory liability for environmental rehabilitation and other 
ﬁnancial consequences that may be signiﬁcant
the group has implemented a number of initiatives to monitor 
and limit the impact of its operations on the environment  
these include external expert assessment of pollution 
generated and adoption of industry best practice  
on the corporate level policies and procedures  
refer to pages 8083 of this report
risk category risk description and potential effect risk response
7
political risk
operating in russia and kazakhstan involves some  
risk of political instability which may include changes  
in government negative policy shifts and civil unrest 
these may have an adverse effect on the group’s  
market value and operating environment
the group actively monitors political developments  
on an ongoing basis
we aim to maintain open working relationships with local 
authorities in the countries where we operate
8
currency risk
currency risk arises as the group’s revenue is linked to 
london bullion market association lbma gold and silver 
ﬁxings and denominated in us dollars the expenses are 
mostly incurred and denominated in russian roubles
natural hedging is used to reduce the risk exposure  
revenue is matched with us dollar denominated debt
flexible budgeting is used to monitor the effect of exchange 
rate ﬂuctuations on the group’s ﬁnancial results
9
human resources
failure to retain key employees or to recruit new staff 
mainly at the group’s mining and processing facilities  
may lead to increased staff costs interruptions to existing 
operations and delay in new projects
lack of skilled and knowledgeable staff at remote  
locations may occur due to extreme weather conditions
a working conditions improvement programme is in place
remuneration policies are designed to incentivise motivate 
and retain key employees
there is an increased focus on health and safety –  
refer to page 84 of this report and there is active promotion  
of a positive corporate culture within the group
10
liquidity risk
inability to raise sufﬁcient funds to meet current  
operating or ongoing ﬁnancial needs to develop new 
projects and growth 
the group’s treasury function is responsible for ensuring  
that there are sufﬁcient funds in place including loan facilities  
cash ﬂow from operating activities and cash on hand to meet 
shortterm business requirements longterm credit lines  
are used to ﬁnance new projects and organic growth
11
failure to meet 
exploration objectives
exploration and development are capital and time
intensive activities and may involve a high degree of risk 
they are however necessary for the future growth  
failure to discover new reserves of sufﬁcient magnitude 
could adversely affect the group’s medium and longterm 
growth prospects 
the group invests considerable amounts in focused 
exploration projects to obtain sufﬁcient information about the 
quantity and quality of expected reserves and to estimate 
expected cash ﬂows the group’s team of geologists and 
engineering specialists has a track record of successful 
greenﬁeld and brownﬁeld exploration leading to subsequent 
development of exploration ﬁelds into commercial production
12
interest rates
the group is exposed to interest rate risk as signiﬁcant 
part of the group’s debt portfolio comprises us dollar 
denominated ﬂoating rate borrowings
based on analysis of the current economic situation the 
group has decided to accept the risk of ﬂoating interest rate 
rather than hedge it or borrow at ﬁxed rates however the 
group does not rule out the possibility of ﬁxing the interest  
rate on its borrowings in the future should assessment of the 
on going economic situation suggest this may be proﬁtable
13
inﬂation risk
the group is exposed to potentially high rates of inﬂation  
in the russian federation and kazakhstan higher rates  
of inﬂation may increase future operating costs and have  
a negative impact on ﬁnancial results if there is no related 
depreciation of the local currency against us dollar  
or an increase in lbma gold and silver ﬁxings 
as part of the budgeting process the group estimates  
possible inﬂation levels and incorporates them into  
cost planning
residual risk level
high  medium  low 
residual risk level
high  medium  low 
effective risk identiﬁcation  
and management
continued
business review
business review 
annual report 2012 polymetal international plc 79 78 polymetal international plc annual report 2012 sustainability – 
ensuring progress
our approach to sustainability
we regard sustainability as an 
essential element of our activities  
it is an investment in society as well  
as in our own future that’s why  
we ﬁrmly believe that anchoring 
sustainability as part of our business 
strategy will lead to economic 
environmental and social progress
sustainability is the ultimate responsibility of our group  
ceo vitaly nesis to help him in this a technical council  
is convened monthly to monitor among other issues 
performance against our sustainability priorities and 
implementation of associated policies across all of the 
operating companies our heads of department report  
into the council covering employees community outreach 
health and safety and environmental management 
the un global compact
the overall sustainability strategy is designed to meet the 
requirements of the un global compact this voluntary 
international standard commits afﬁliated companies  
to comply with ten principles in the areas of human rights 
labour environment and anticorruption polymetal became  
a signatory in 2009 and is an active member of the  
un global compact network russia
the un global compact and our corporate values deﬁne  
the focus for more detailed policies and associated 
management systems all of which are deﬁned at group level 
and implemented through our head ofﬁce and the subsidiary 
companies ongoing monitoring and regular audit ensures  
that performance is measured against the relevant regulatory 
and company internal requirements
assessing risks
the ceo board of directors and technical council aided by 
the internal audit department identify risks to the business 
and associated management operations in doing so they are 
informed by interaction with government agencies the ﬁnancial 
community employees local communities ngos customers 
and suppliers our risk management process is deﬁned and 
monitored by the audit and risk committee of the board 
stakeholder engagement 
our stakeholders help to deﬁne sustainability priorities and 
provide a vital check on how we are performing we are 
therefore open honest and clear in the way we communicate 
through many channels including corporate reporting 
company news brieﬁngs hotlines and digital technology 
we have identiﬁed ﬁve main stakeholder groups 
shareholders and investors
they are interested in governance strategy and sustainable 
ﬁnancial returns
employees
they are interested in careers beneﬁts health and safety 
corporate reputation and clear lines of communication
partners and suppliers
they are interested in fair dealing openness and transparency
government
they are interested in compliance transparency and  
economic development
communities and ngos 
they are interested in directing investments openness  
and transparency economic opportunity and longterm 
relationships
for more details on our sustainability performance including 
compliance with gri recommendations and meeting level b  
of reporting please refer to our sustainability report 2012
our sustainability focus for 20132014
our sustainability focus is inﬂuenced by those issues that 
present a risk to our business performance and those that are 
deemed important by our stakeholders while our focus for 
201314 is deﬁned our approach is ﬂexible and responsive to 
changes in the policy and ﬁnancial environment developments 
in best practice regarding employee relations and safety and 
new or heightened concerns for communities that inﬂuence  
our investments 
through our risk management and stakeholder engagement 
programmes we have identiﬁed ﬁve key sustainability priorities 
which are material for the business 
 to maintain positive working relationships with local 
government ngos and communities by enhancing our 
partnership agreements and increasing the effectiveness  
of our investments
 to attract and retain high quality people and ensure and 
improve the quality and terms of their employment
 to further improve our health and safety systems through 
more sophisticated visualisation risk management and  
more rigorous monitoring as well as to enrol it to our wide 
supplier network
 gaining third party certiﬁcation for our environmental 
management system and embedding the system into 
production operations and
 to enhance the rigour and transparency in our 
communications with suppliers customers and partners
environmental responsibility
the group operates complex 
processes on a large scale in remote 
locations some of which are home  
to indigenous people these processes 
create waste and emissions including 
toxic substances therefore we operate 
a management system to reduce the 
associated impacts while complying 
with national and international 
government regulations 
we operate a groupwide environmental management  
system that is planned and coordinated by our deputy chief 
operating ofﬁcer and director for environment health and 
safety from our headquarters in st petersburg the system  
is based on international best practice applies across all 
group businesses and complies with relevant russian and 
kazakh legislation one of our priorities for 2012 was to 
prepare for independent certiﬁcation to iso 14001 this 
certiﬁcation was granted in march 2013 after an external audit 
by bureau veritas an independent environmental assurance 
ﬁrm the environmental management system is also subject  
to regular internal review 
the core of the system is an environmental policy which is 
available at wwwpolymetalinternationalcom this focuses  
on the use of best practice continuous improvement risk 
reduction compliance and issues management there is a 
strong focus on incident and emergency control use of the 
most environmentally friendly materials and resource efﬁciency
each of our subsidiary companies has its own environmental 
team which runs and monitors the system and provides 
monthly performance reports to the group air quality  
surface water and ground water samples collected through  
the system are analysed at laboratories certiﬁed to international 
standards our inhouse engineering operation polymetal 
engineering employs more than 100 specialists in the  
design and construction of mines and processing facilities  
all ecological aspects are taken into account at the stage  
when new facilities are being designed
 
new community buildings at ozerny khabarovsk territory environmental focus in the sverdlovsk region urals
investing in sustainability
business review
business review 
annual report 2012 polymetal international plc 81 80 polymetal international plc annual report 2012 auditing and compliance
regular audit and monitoring activities are built into the 
management system and comply with the requirements of 
relevant russian and kazakh legislation external audits are 
undertaken by state supervisory authorities such as the 
russian federal service for supervision of natural  
resource usage 
employee environmental training
our human resources department annually reviews 
environmental training opportunities at national and 
international level an inhouse training programme also 
supplements ongoing professional development with site  
visits and attendance at conferences each year our 
environmental managers attend the allrussian industrial 
ecologists’ seminar for an update on environmental legislation 
speciﬁc courses attended by environmental specialists  
include those covering environmental management systems 
hazardous waste land reclamation water quality assessment 
and environmental security
investment in environmental protection
our overall investment in environmental management and 
monitoring has increased from us56 million in 2011 to  
us78 million in 2012 reﬂecting growth in the scope and 
intensity of external monitoring and expenditure on equipment 
people and training in 2012 48 of this investment went into 
protection of water resources 33 into land reclamation and 
19 into reductions in atmospheric emissions
regulatory authorities specify that we make quarterly 
payments in line with the intensity of monitoring and auditing 
required in 2012 these payments amounted to us27 million 
compared to us23 million in 2011 reﬂecting continued 
expansion of our production capacity 
future plans
our action plan for 201315 focuses on continuous 
improvement to our environmental management systems 
including improving performance against the most signiﬁcant 
environmental impacts at each site and embedding this into 
standard operating procedures
maintaining and managing biodiversity
in accordance with the federal law of the russian federation 
we do not operate in or near ’special protected areas’ nor 
those that are designated of natural historical or cultural value 
by imn prior to operating on any site we are required to 
undertake comprehensive surveys and impact assessments 
of the 11 mineral ﬁelds that we are currently developing seven 
are situated in areas where rare endemic and vanishing ﬂora 
and fauna are found in all seven as well as the remaining four 
sites we operate a system designed to protect ﬂora and fauna 
this involves baseline monitoring of the predevelopment state 
and the creation of protection and buffer zones away from key 
extraction transport and construction activity 
sustainability – 
ensuring progress
continued
our performance
ghg emission
co
2
 equivalent tonnes 
per 10kt of ore mined 
the use of diesel generators to power our plants natural 
gas and coal for heating and diesel fuel for vehicles 
accounts for our main ghg emissions during 2012  
we increased our diesel generation capacity however 
our ability to use this energy more efﬁciently saw  
an incremental reduction in ghg emission intensity
2010 2011 2012
18
20
19
all air emissions
tonnes per 10kt  
of ore mined
stripping mined waste storage ore processing and 
energy use generate air emissions including carbon 
dioxide and oxides of nitrogen and sulphur
2010 2011 2012
46 47
62
waste
tonnes per tonne  
of ore mined 
we operate against a set of procedures that are 
designed to minimise the amount of waste maximise  
the volumes recycled and minimise the potential impacts 
on people and the environment the rise has been 
driven by an increase activity at some of our new 
operations combined with signiﬁcant growth in 
underground development 2010 2011 2012
6581
5985
6754
discharges to  
surface water 
thousand cubic 
metres per 10kt  
of ore mined 
the reduction in discharge intensity reﬂects the work 
done to enhance the efﬁciency of water use and  
increase recycling
2010 2011 2012
33
48
61
energy use
gigajoule per 10kt  
of ore mined
group companies operate in remote areas subject  
to extremes of weather and far from centralised power 
sources they must generate their own sources of 
electricity and heat which currently necessitates 
signiﬁcant use of diesel generators costs environmental 
impacts and alternatives are constantly reviewed
2010 2011 2012
580
530
662
surveying activity in the chukotka autonomous territory tailing storage at mayskoye
maintaining high standards
business review
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annual report 2012 polymetal international plc 83 82 polymetal international plc annual report 2012 health and safety
a safe and healthy working 
environment is a fundamental right  
for all employees and a measure  
of management effectiveness
polymetal’s approach to health and safety is set by its 
employee protection and workplace safety management 
system this is designed to detect assess and manage 
production risks ensure employee health and workplace  
safety and deﬁne the safe use of buildings other structures 
and all equipment the system complies with iloosh 2001  
ohsas 18001 and gost r 1200072009
in 2012 health and safety activity focused on
 ongoing implementation operation and reﬁnement  
of the system
 reducing workplace injuries
 enhancing the culture of safety within every operation
 ensuring that the latest safety techniques and equipment  
are applied
 enhancing safety training
we operate 102 production sites and processes each with  
its own inherent risks including open and underground mines 
geological exploration sites ore processing explosive depots 
as well as transportation of people equipment waste and  
ore every employee receives illustrated guides backed  
up by regular brieﬁngs and formal training sessions as well as 
the provision of necessary equipment and work wear this is 
backed up by ongoing internal audits that identify areas of poor 
and positive practice that maintain the integrity of the system
workplace accidents
in 2012 there were 11 workplace accidents across the group 
none of which were fatal one of which was serious and ten of 
which were minor of this total 62 of the accidents involved 
being struck by an object 18 involved falling from height  
9 falling while walking and 11 were burns related while the 
total number of nonfatal accidents in 2012 was the same as in 
2011 there was only one serious accident compared with two 
the previous year the remainder being classiﬁed as minor  
our target is to get the accident rate as close to zero as 
possible therefore we will continue to improve our health  
and safety systems to prevent incidents
a key corporate kpi is the ongoing reduction of the lost time 
injury frequency rate ltifr this has reduced from 063  
in 2011 to 059 in 2012 following a major improvement from  
19 in 2010 we have also experienced our second consecutive 
year with zero fatalities which is a tangible and meaningful 
outcome from the measures taken to improve safety systems 
and risk management
in 2012 we initiated daily risk assessments dras introduced 
a 5s programme at all of our processing plants and transport 
depots started to integrate contractors into the health and 
safety system and established ongoing monitoring of risk
health and safety performance
2012 2011 2010 
accidents 11 11 24
incidents  0 2–
occurrences  19 14 14
injury frequency coefﬁcient  12 13 35
injury gravity coefﬁcient 36 61 75
lost time injury frequency rate ltifr  06 06 19
fatal injury frequency rate fifr 0 005
contractor organisations 
accidents  2 50
occurrences  13 9 10
workrelated illness
zero cases of productionrelated illness were recorded in 2012 
each employee receives as a minimum an annual health 
check from one of our medical professionals in some cases 
these checks identify the need for speciﬁc treatment perhaps 
involving time away from the workplace in one of our  
health centres
focus for 201315
our health and safety focus for 20132015 is on enhancing our 
capabilities in training visualisation and monitoring as well as 
rolling out the system to our supplier and contractor network 
employees
our employees are contributors to  
and beneﬁciaries of our commercial 
success they expect a high quality 
working environment direction  
and a career pathway in return  
we expect a clear commitment  
to our corporate goals 
as a key stakeholder group our employees expect a certain 
standard of behaviour from the company and in turn we 
provide a code of conduct to which they commit to adhere 
the code of conduct is supported by speciﬁc policies on 
recruitment and equality professional development appraisal 
training resources and skills organisational design motivation 
and reward and productivity the code also summarises  
our position on harassment and bullying drugs conﬂicts of 
interest bribery entertainmentgifts government relations 
antitrust and anticompetition laws community relations 
insider dealing data protection transparencydisclosure and 
environmental protection
employment policies and proﬁle
in line with the un global compact principles our main 
employment objectives are
 to build a team that is motivated to achieve business 
performance targets
 to create working conditions and a system of incentives  
that improves safety
 to supply company operation projects with appropriately 
skilled personnel and
 to operate a continuous employee skills improvement 
programme 
human resources policies are coordinated by our group head 
of human resources from our headquarters in st petersburg 
these are implemented by the managing directors of our 
operating companies working through their human  
resources teams
as at 31 december 2012 we employed 9237 people across 
the group with 7 862 in production 554 in exploration and 821 
in research development design logistics and management 
most of those working in extraction and exploration work on  
a shift basis due to the demanding nature of the work and the 
remote locations of many sites on average shift workers 
account for 60 of the headcount the growth in employee 
numbers between 2011 and 2012 is largely accounted for  
by the development of the amursk and omolon hubs
more than 60 of all employees work in magadan and 
khabarovsk regions in the hubs at omolon dukat and 
amursk as well as khakanja and albazino
 
 
headcount distribution by regions of operations  
35
32
9
11
8
5
 magadan region
 khabarovsk region
 chukotka autonomous territory
 sverdlovsk region
 kazakhstan
 st petersburg and karelia
in 2012 women occupied 23 of our management roles 
compared to 19 in 2011 we have also made signiﬁcant 
efforts to work with local universities to provide internships and 
a pathway for graduates and young specialists into the 
business in 2012 we employed 260 people under this 
scheme up from 190 in 2011 
competitive salaries and beneﬁts
our salary levels comply with all legal requirements in russia 
and kazakhstan and are highly competitive exceeding the 
average across each of our operating regions and the  
russian and kazakh mining sectors
sustainability – 
ensuring progress
continued
management of blasting operations at khakanja personnel discussing operations at varvara
focusing on a safe working environment
business review
business review 
annual report 2012 polymetal international plc 85 84 polymetal international plc annual report 2012 skills development and training
all polymetal employees have access to a comprehensive 
training programme covering general aspects of our 
operations and speciﬁc technical curricula this is delivered  
as part of an appraisal system that measures employee 
development and maps out career pathways when new 
employees join the company they undergo an initial appraisal 
as part of which a detailed training plan is drawn up  
and agreed
over 2012 we invested us11 million 2011 us09 million  
in professional training across all disciplines in 2012 this 
meant that 2096 employees had some form of additional 
professional development training in 2012 the average 
number of hours of training was the same as for 2011  
41 hours per person for managers and 42 hours per person  
for specialists between 2011 and 2012 the average hours  
of training for all other employees increased from 47 to 90 
reﬂecting the work done to enhance our occupational  
health and safety system 
employee relations
we support our employees’ right to freedom of association  
and their desire to enter into collective agreements in 2012 
7 526 employees or 81 of the total workforce were 
participating in collective agreements at our eight main 
operating sites in russia and kazakhstan some of the 
agreements expire and will be renegotiated in 2013 while  
most will run to midlate 2015 at each of these sites at least 
one employee with a maximum of nine sits on a labour 
relations commission lrc a vehicle for discussing work
related queries and concerns in tandem with the lrc six  
of the sites hosted workers’ councils which act as a further 
voice for employees in that operation on the two sites that  
do not those contributing to the lrc act as the conduit for 
views from the workforce
the principles that we adhere to when engaging with local 
communities and indigenous peoples in these locations are
 to be open to ideas and comments from those living and 
working close to our operations
 to be transparent in our dealings with those living and 
working close to our operations – providing timely relevant 
and accurate information on the progress of corporate and 
community investment projects 
 to take a longterm view of interaction and investment and 
put in place systems for identifying investment priorities  
and monitoring progress
 to identify and act on the most signiﬁcant issues for local 
communities and indigenous peoples – entailing open and 
regular dialogue and
 to provide real and tangible beneﬁts to local communities 
and indigenous peoples
investing in communities
our community investment priorities have been determined 
through feedback from our employees and our experience  
of working with communities and indigenous peoples over  
many years at least once a year we evaluate local community 
requirements through public meetings questionnaires  
surveys and one to one dialogue this allows us to identify  
key investment targets and assess the impact of existing 
investments in the main these investments focus on the 
following activities and groups
 education and healthcare
 infrastructure
 sports facilities and healthy lifestyle initiatives
 cultural and creative development with indigenous peoples
 indigenous minorities of the north imn
these investments totalled us6 million in 2012 more than 
80 of which was directed towards sports education and 
healthcare projects
social investments in 2012  
42
26
15
6
6
5
 sports
 education
 health
 infrastructure
 cultural and creative potential
 imn
community
our aim is to operate with the tacit 
support of our neighbours in the form 
of local communities and indigenous 
peoples our relationship with these 
communities has many facets as an 
employer a user of services a user  
of resources producer of waste 
materials and emissions and as an 
investor in local infrastructure and  
the social fabric we therefore offer 
multiple contact points both formal 
and informal such that needs are 
addressed and the beneﬁts of the 
relationships are maximised
we recognise that our business cannot operate without formal 
and informal licence to operate from local authorities and their 
associated communities in our areas of operation we are  
a signiﬁcant employer and creator of infrastructure that  
impacts upon adjacent communities and indigenous peoples 
consequently we have formalised our approach to and  
attitude towards local and indigenous peoples in our code  
of corporate governance and policy on social investments 
that are informed by the un global compact and the un 
declaration on the rights of indigenous peoples compliance 
with the code is monitored by the technical committee  
and implemented through our group companies by their  
respective management teams
our operations – and hence the regional and local populations 
with which we interact – are numerous and widespread 
including russia’s far east omsukchan srednekansk and 
severoevensk districts in magadan region okhotsk amursk 
ayanomaysk and polina osipenko as well as the town of 
amursk in khabarovsk territory northern urals the towns  
of krasnoturinsk karpinsk degtyarsk and sukhoi log and 
vorontsovka village chaun district in chukotka autonomous 
territory and taranovka district in kazakhstan
community engagement
in 201112 we organised 30 meetings with local communities 
and imn groups eight round table discussions and 
consultations with the representatives of local ecological and 
social welfare groups and organised six sites visits for nature 
conservation organisations 
feedback obtained from these meetings informal contact  
and ongoing evaluation of community investment work was 
overwhelmingly positive while this is a pleasing outcome we 
are conscious of our longterm commitments to the economic 
social and environmental wellbeing of the people and places 
associated with our operations
in line with our own codes and policies we have six 
agreements in place with imn communities in our russian  
far east operations these agreements are drawn up in 
consultation with imn and local authority representatives and 
focus on support for traditional reindeer breeding activity 
educational and cultural programmes designed to celebrate 
and preserve language and traditions provision of fuel food 
vehicles and building materials maintaining and restoring 
festival and holiday traditions learning about local ecosystems 
exchanging knowledge on environmental protection and 
facilitating exchanges between others in the local area and  
imn representatives
community beneﬁt
over and above our tax commitments and employment 
commitments we maintain and enhance local infrastructure 
and services maintain and grow the working population 
increase employment opportunities provided training and 
education for local people and operate a longterm programme 
of community investment as an average the proportion of 
employees drawn from the local population across all of our 
sites is about 90 of the total workforce in addition at the 
end of 2012 we also employed more than 80 people from 
indigenous minorities living and working adjacent to our 
production sites
sustainability – 
ensuring progress
continued
a folk festival for the indigenous minorities of the north the panthers junior ice hockey team in action
committed to community involvement
business review
business review 
annual report 2012 polymetal international plc 87 86 polymetal international plc annual report 2012 governance 
board of directors
 chairman
 executive director
 nonexecutive director
 independent nonexecutive director
01 bobby godsell
chairman of the board of directors 
chairman of the nomination committee
mr godsell has over 30 years’ experience  
in the international mining sector and brings 
valuable industry and leadership insight  
to the board he is chairman of business 
leadership south a member of the south 
african national planning commission and 
cochairman of the south african millennium 
labour council he is also nonexecutive 
director of the south african industrial 
development corporation his previous roles 
have included president of the south african 
chamber of mines and chairman of eskom 
chief executive of anglogold ashanti as  
a director of african barrick gold and chair  
of the board of optimum coal holdings 
acquired by glencore plc he has a ba from 
the university of natal and an ma from the 
university of cape town
skills international mining sector
02 vitaly nesis 
chief executive ofﬁcer
mr nesis was jsc polymetal’s chief 
executive from 2003 becoming a member of 
its board in june 2004 between 2002 and 
2003 he was ceo of vostsibugol and in 2000 
he was strategic development director at the 
ulyanovsk automobile plant from 2001 to 
2002 he headed the investment planning 
department at sual holding from 1999 to 
2000 he worked for mckinsey in moscow 
and from 1997 to 1999 he was an analyst  
at merrill lynch in new york he graduated 
from yale university in 1997 with a ba  
in economics
skills economics and mining
04 jeanpascal duvieusart 
nonexecutive director
mr duvieusart is a director of ppf advisory 
russia and has been a member of the 
supervisory board of ppf since 2010  
he joined mckinsey in 1992 and was 
managing partner for central europe and  
the cis from 2005 until the end of 2009  
mr duvieusart graduated from the catholic 
university of louvain belgium with a  
master’s degree and received an mba  
from the university of chicago in 1992
skills business strategy
05 marina grönberg 
nonexecutive director
ms grönberg has been a member of the 
board since 2011 formerly serving on  
jsc polymetal’s board of directors since 
september 2008 she is also a board  
member of waterstones booksellers 
hachetteatticus publishing group mig 
credit marenco swiss helicopters spar
retail mlp and ann capital management 
fund she is a president of the nadezhda 
charity fund and managing director of ann 
schweiz ms grönberg’s qualiﬁcations 
include degrees in law from moscow state 
law academy and in applied mathematics 
from moscow state university
skills law
06 charles balfour 
senior independent nonexecutive director 
member of the audit and risk remuneration 
and nomination committees
mr balfour has over 40 years’ experience  
in the investment banking industry in the  
us uk france and hong kong working  
for companies including dillon read banque 
paribas durlacher and fleming family 
partners between 1993 and 2004 he was  
an executive of nasdaq international and 
served as its chairman from 2000 until 2004 
he has served as a director of humber power 
and is currently a director of humber energy  
and a trustee of the bawdsey estates  
mr balfour was educated at eton and the 
sorbonne in paris
skills finance
07 jonathan best 
independent nonexecutive director 
chairman of the audit and risk committee  
member of the remuneration committee
mr best was an independent director of jsc 
polymetal’s board since december 2006  
he has more than 30 years’ experience in the 
mining industry in 2006 he served as the 
interim ceo of transsiberian gold prior to 
that he was cfo and an executive director  
of anglogold ashanti where he was involved  
in the company’s formation and its listing in 
new york he is currently a nonexecutive 
director of anglogold ashanti holdings plc 
and a member of its audit committee  
he is chairman of sentula mining and bauba 
platinum where he serves on the nomination 
and remuneration committees and of 
goldstone resources mr best is chairman  
of the audit committees of metair investments 
and gulf industrials he is an associate  
of the chartered institute of management 
accountants an associate of the chartered 
institute of secretaries and administrators  
and holds an mba from the university of the 
witwatersrand johannesburg
skills mining ﬁnance and business strategy
08 russell skirrow 
independent nonexecutive director 
member of the audit and risk committee
dr skirrow was an independent director of 
jsc polymetal’s board since september 
2008 dr skirrow previously spent ten years at 
merrill lynch as head of global metals mining 
 steel research and subsequently as global 
chairman of the metalsmining team he is 
chairman of dampier gold and has 12 years’ 
experience in the international mining industry 
having worked with companies such as gold 
fields south africa and western mining 
corporation in australia and the us he is a 
member of the institute of materials minerals 
 mining with chartered engineer status and 
a fellow of the financial services institute  
of australia he has a bsc in geology from 
durham university and a phd from the royal 
school of mines imperial college london
skills mining
09 leonard homenuik 
independent nonexecutive director 
chairman of the remuneration committee 
member of the nomination committee
mr homeniuk was an independent member of 
the board of jsc polymetal since june 2010 
from 2004 to 2008 he served as president 
ceo and member of the board of directors  
of centerra gold in 2011 he founded polygon 
gold inc and subsequently assumed the role of 
chair president and chief executive ofﬁcer he 
has also held executive positions with centerra 
gold kumtor gold and cameco corporation 
mr homeniuk received an msc from the 
university of manitoba and is a member of the 
ontario society of professional engineers the 
canadian institute of mining and metallurgy 
and the prospectors and developers 
association of canada he is an honorary 
professor at the kyrgyz mining institute
skills mining and engineering
01 03
07
06 04
08
02
05
09
senior management 
vitaly savchenko 
chief operating ofﬁcer
mr savchenko was appointed coo of  
jsc polymetal in 2009 and elected to the 
management board in september 2011  
from 2007 to 2009 he was director of the 
production department having held senior 
production technical and mining positions 
since 2004 from 1994 to 2003 he worked  
at priargunskoye mining and chemical 
company latterly as a chief engineer  
mr savchenko graduated from the kyrgyz 
mining institute in 1994 with a degree in 
underground mineral mining engineering and 
is a recipient of a thirdcategory miner’s glory 
medal he has completed stage 1 of the mba 
course at the uk’s open university business 
school and is currently undertaking stage 2
sergey cherkashin 
chief financial ofﬁcer
mr cherkashin was appointed cfo of jsc 
polymetal in 2005 having previously held 
senior management positions in the food 
processing and machine building industries 
he was cfo of the timashevsk dairy plant 
sales director of the ulyanovsk automotive 
plant and deputy ceo of development at  
the volgograd dairy plant having previously 
been a consultant for at kearney in moscow  
mr cherkashin graduated from the moscow 
institute of physics and technology in applied 
mathematics and has completed a oneyear 
mba programme at the university of hartford
sergey trushin deputy ceo mineral resources
mr trushin was appointed deputy ceo 
mineral resources in 2010 from 2008  
to 2010 he was chief geologist at the 
khabarovsk exploration company and 
between 2006 and 2008 he was chief 
geologist at albazino resources where  
he had held various positions since  
1998 in 1997 he was a geologist with 
dalnevostochnie resources and in the 
preceding six years he was a geologist  
with the production geological association 
‘dalgeology’ and the nizhneamursk 
exploration expedition mr trushin has  
a degree in geological surveying and  
mining engineering exploration from the 
novocherkassk state polytechnic institute
roman shestakov 
deputy ceo project development  
and construction
mr shestakov was appointed deputy ceo for 
development and construction of polymetal 
management company in 2009 from 2007 
to 2009 he was a chief engineer at gold of 
northern urals where he also held a position 
of a pit superintendent from 2006 during 
20042005 he was a mine superintendent  
at the okhotsk mining and exploration 
company and in the preceding two years  
he was a mining engineer in the production 
and technical department of jsc polymetal  
he graduated with honours from the mining 
department of the st petersburg state 
mining institute majoring in openpit mining
valery tsyplakov 
managing director jsc polymetal 
engineering
mr tsyplakov was appointed managing 
director polymetal engineering in 2004  
from 2000 to 2004 he held senior roles in the 
production and technology and technological 
research departments subsequently 
becoming deputy general director for  
mineral resources design and technology 
previously he served as department head  
at the soviet union research institute of 
aeronautical automation and prior to this  
at orhus university’s physics institute 
denmark he was also a research fellow  
in the plasma physics department of the 
moscow physics and engineering institute 
from where he graduated in experimental 
nuclear physics he also holds a phd in 
physics and mathematics mr tsyplakov  
is a professional member of the institute  
of materials minerals  mining london
pavel danilin 
deputy ceo strategic development
mr danilin was appointed deputy ceo  
for strategic development in 2009 having 
previously been director of corporate finance 
and investor relations from 2003 to 2005  
he was head of corporate finance and 
between 2002 and 2003 he worked at  
cjsc ict in the same capacity from 1998  
to 2001 he was deputy head of the currency 
department and head of the ﬁnancial 
resources department at the kaliningrad 
branch of bank petrocommerce mr danilin 
graduated in 1998 from kaliningrad state 
technical university in economics and 
management he received an mba in 2007 
from the university of california at berkeley 
haas school of business
igor kapshuk 
chief legal ofﬁcer
mr kapshuk was appointed chief legal 
ofﬁcer in 2009 having been head of the legal 
department since 2005 and deputy head 
since 2003 between 2001 and 2003 he held 
various positions including deputy general 
counsel head of the department for legal 
matters and head of the claims department  
at the siberia energy coal company and 
vostsibugol irkutsk from 1999 to 2001 he 
worked as a legal advisor for pharmasintez 
and from 1997 to 1998 he worked at the 
irkutsk teapacking factory as a legal advisor 
and acting head of the legal department  
mr kapshuk graduated from the law school 
of irkutsk state university in 1995 
03 konstantin yanakov 
nonexecutive director
mr yanakov has been a member of the board 
since 2011 having served on jsc polymetal’s 
board of directors since september 2008 and 
as a member of the audit committee until 
2011 he is currently chief financial ofﬁcer  
of ict group and prior to joining ict he held 
various positions at mdm bank and was cfo 
of jsc polymetal until 2004 mr yanakov  
is also a board member at piraeus bank  
he graduated from the government of 
russia’s finance academy with a degree in 
global economics and received a phd in 
economics from the russian state university 
of management in 2007 mr yanakov received 
an mba from the london business school
skills finance
governance
annual report 2012 polymetal international plc 89 88 polymetal international plc annual report 2012 governance 
corporate governance
dear shareholders
governance is at the heart of our culture providing a 
framework within which we can maintain and develop the 
values and practices that support our corporate objectives 
and which ensure that polymetal reﬂects high levels of ethical 
and responsible behaviour
during our ﬁrst full year as a premium listed company  
on the london stock exchange we have worked hard to  
ensure that we follow both the letter and the spirit of the  
uk corporate governance code we have a disciplined 
approach characterised by a system of regular review and 
assessment and a programme of continuous improvement 
this approach is designed to achieve a balance between 
encouraging positive and dynamic commercial values and 
applying the appropriate discipline and regulatory guidance 
where required such balance ensures that we achieve our 
business objectives by operating a rigorous system of internal 
control supported by culture of control and accountability 
throughout the organisation
in 2012 we have been particularly focused on the code’s 
emphasis on the analysis of alignment of remuneration with 
shareholder interests the balance and effectiveness of the 
board and its composition and the active stewardship of risk 
management 
with the exception of certain legacy share option scheme 
arrangements which will be subject to changes in june 2013 
and which are already addressed by forwardlooking changes 
to the remuneration policy we are complying with the 
provisions of the code and will continue to assess and 
develop our governance framework as appropriate part  
of this process encompasses a formal internal evaluation  
of the performance of the board its committees and individual 
members while evaluation during the year has conﬁrmed the 
board’s effectiveness further feedback will form part of 
ongoing recommendations for its development
polymetal is a unique and strongly focused business  
we believe that our robust corporate governance structure  
and effective operation of the board are already translating into 
delivery of our tactical and strategic targets and shareholder 
value creation delivery on projects and production targets and 
consequently our ability to sustain ﬁnancial performance and 
dividend ﬂow to shareholders all these solid achievements are 
already meaningfully differentiating polymetal from many  
of our peers in the sector
we are on track with our strategy both operationally and 
ﬁnancially going forward we are committed to ensuring that 
the company is run in the best interests of all its stakeholders 
and that the board is accountable for responsible stewardship 
disciplined performance and sustainable value delivery
bobby godsell
chairman
statement of compliance with uk corporate 
governance code 
the directors are committed to maintaining high standards of 
corporate governance as a premium listed company during 
the year ended 31 december 2012 polymetal international was 
required to comply with the uk code of corporate governance 
‘the uk code’ published in june 2010 and available at the uk 
financial reporting council’s website or where the provisions 
of the uk code have not been complied with to provide 
appropriate explanations in 2012 the company has complied 
with the provisions of the uk code except for the following
 schedule a of the uk code recommends share options and 
awards should not vest in less than three years the existing 
option scheme will become fully compliant with schedule a 
from june 2013 
the reason for noncompliance was the existence of share 
option arrangements prior to admission 
the uk code recommends that share options and awards 
should not vest in fewer than three years in november 2010 
prior to the uk code becoming applicable to the company 
sharebased payment awards were granted to certain 
employees that could subject to the meeting of speciﬁc 
performance criteria vest in june 2013 a period of two years  
7 months this vesting period was considered appropriate as 
it aligned employee incentives with the company’s objectives 
in june 2013 option holders will either exercise their options  
or have an opportunity to extend them for a further year at a 
higher performance condition level see details on page 109 
below following which the existing option scheme will become 
fully compliant with schedule a as no outstanding share 
options and awards granted under it will vest in less than three 
years from the date of their grant
the board has already made appropriate amendments  
to the company’s remuneration policy so that any future 
sharebased payment award arrangements will comply with 
the recommendations of the uk code refer to the directors’ 
remuneration report on page 105 for more detail
role and structure of the board
the company’s board comprises one executive director the 
nonexecutive chairman and seven nonexecutive directors 
excluding the chairman four members of the board are 
independent nonexecutive directors refer to the schedule 
below for the structure of the board and its committees 
showing the status of each director
the independent nonexecutive directors are those determined 
by the board to be independent in character and judgement 
and to be free from relationships or circumstances which may 
affect or could appear to affect the director’s judgement
the role of independent directors on the board is to challenge 
the strategy and scrutinise the performance of management in 
meeting agreed goals and objectives to monitor performance 
of the company to review the integrity of ﬁnancial information 
and to review the appropriateness of the company’s internal 
controls and risk management systems 
directors’ interests are disclosed in annual declarations and  
the company secretary is notiﬁed promptly of any changes  
to those interests before each board meeting directors 
reconﬁrm their independence and all directors disclose 
whether they hold any interests in any matters to be reviewed 
at the board meeting 
the signiﬁcant shareholders of the company are represented 
on the board by mr yanakov who is a representative of 
powerboom investments limited ms grönberg who is  
a representative of vitalbond limited ann and capital 
management fund limited and mr duvieusart who is a 
representative of ppf group bv mr nesis is the brother of the 
beneﬁcial owner of powerboom investments limited save for 
the potential conﬂicts inherent in these relationships there are 
no potential conﬂicts of interest between the duties owed by 
the directors or senior management to the company and their 
private interests or other duties
the board has determined charles balfour jonathan best 
russell skirrow and leonard homenuik to be independent 
nonexecutive directors bobby godsell met the independence 
criteria on appointment jonathan best has been on the board 
of the company since september 2011 and on the board of 
jsc polymetal since december 2006 and his reappointment  
is subject to particularly rigorous review the board believes 
that jonathan continues to display all of the qualities of 
independence pursuant to the criteria set out in the code
in 2012 the company sold 100 of amikan holdings limited 
which owns the veduga gold deposit ‘veduga’ in the 
krasnoyarsk region of the russian federation to polygon gold 
inc ‘polygon’ mr homeniuk serves as polygon’s executive 
chairman and ceo polygon operates as a standalone 
company with independent management and polymetal 
provides certain technical and regulatory assistance to polygon 
on an ongoing basis polymetal currently holds 426 equity 
ownership in polygon and one of the four board seats and 
therefore has signiﬁcant inﬂuence but does not have control 
over its activities the board continues to consider mr 
homeniuk to be an independent nonexecutive director  
the board concluded that the relationship between polymetal 
and polygon is not material given the carrying value of veduga 
which is us193 million and represents approximately 05  
of the group’s total assets as at 31 december 2012 
 
governance
annual report 2012 polymetal international plc 91 90 polymetal international plc annual report 2012 governance 
corporate governance
continued
the ceo is responsible for the daytoday management  
of the group and developing the group’s business strategy 
objectives budget and forecasts and once approved  
by the board overseeing their successful implementation  
the chief executive ofﬁcer reports to the chairman and  
to the board directly the board interacts with the executive 
management on a regular basis directors welcome senior 
executives to attend relevant parts of the board and  
committee meetings for reporting on items of the agenda  
and participating in discussion all members of executive 
management report directly to the chief executive ofﬁcer  
his responsibilities include
 development and proposal of group strategy including 
communicating annual plans and commercial objectives  
to the board 
 upholding the group’s responsibilities to its shareholders 
customers employees and other stakeholders
 identifying and executing strategic opportunities
 regularly reviewing the operational performance and 
strategic direction of the group
 making recommendations on remuneration policies 
executive remuneration and terms of employment  
for senior employees
 ensuring the development needs of the executive directors 
and senior management are identiﬁed and met and ensuring 
effective succession planning and
 ensuring effective communication with shareholders and that 
appropriate timely and accurate information is disclosed to 
the market with issues escalated promptly to the executive 
management and the board
senior independent director
charles balfour acts as the board’s senior independent 
director mr balfour is available to shareholders and as an 
intermediary for the other directors if necessary he attends 
meetings with major shareholders to listen to their views in 
order to help develop a balanced understanding of the issues 
and concerns of major shareholders meetings between 
independent directors including mr balfour and major 
institutional shareholders took place in 2012 the board  
is regularly updated on the shareholders’ opinions following 
meetings with the company’s management 
separate meetings are held between with the nonexecutive 
directors without the chairman or executive directors being 
present and between the independent nonexecutive 
directors without the other nonexecutive directors being 
present this includes both formal and informal meetings 
between directors
constructive use of the agm
the board uses the agm to communicate with investors and 
to encourage their participation to ensure the company’s 
shareholders have time to consider our annual report and 
accounts and notice of the agm and lodge their proxy votes  
in good time all meeting materials are mailed more than  
20 working days prior to the meeting separate resolutions  
are proposed on each substantially separate subject and all 
resolutions are put to a poll the company also offers 
shareholders the ability to abstain
shareholders who are not able to attend the agm are 
encouraged to submit proxy votes either electronically or in 
paper format at the company’s 2012 agm we received votes 
representing approximately 85 of our issued share capital 
the results of the proxy vote are read at the meeting with the 
ﬁnal results announced via the london stock exchange and 
available on the website 
in addition our agm provides a valuable opportunity for 
shareholders to meet with and put questions to the directors  
in person the 2012 agm was attended by all directors 
including the chairmen of the audit and risk remuneration 
and nomination committees live webcast and conference 
call facilities are available for the shareholders unable to be 
present in person and a recording of the agm webcast  
is made available on the company’s website
the primary means of communication with the majority  
of our shareholders who have not requested paper copies  
of our documentation is through our corporate website  
wwwpolymetalinternationalcom
board and committee meetings’ attendance 
board
meetings
1
seven
audit 
and risk
committee
meetings
2
three
remuneration
committee
meetings
3
two
nomination 
committee 
meetings 
two
bobby godsell all na na all
vitaly nesis all na na na
jonathan best all all all na
russell skirrow all all na na
leonard homeniuk all na all all
charles balfour all all all all
konstantin yanakov all na na na
marina grönberg all na na na
jeanpascal 
duvieusart all na na na
notes
1
  further business conducted by the board was approved by written resolutions  
on two further occasions
2
  further business conducted by the audit and risk committee was approved  
by written resolutions on two further occasions
3
  further business conducted by the remuneration committee was approved  
by written resolutions on three further occasions
evaluation and reelection policies
nomination committee
the nomination committee is chaired by mr godsell and  
its other members are mr homenuik and mr balfour the 
committee has responsibility for making recommendations  
to the board on the composition of the board and its 
committees including appointments of additional and 
replacement directors the committee
 leads the process for board appointments and makes 
recommendations to the board
 regularly reviews the board structure size and composition 
including the skills knowledge independence experience 
and diversity and makes recommendations to the board 
about any changes that the committee considers necessary
the company considers that the board and its committees 
have the appropriate balance of skills experience 
independence and knowledge of the company to enable  
them to discharge their respective duties and responsibilities 
effectively all directors have access to the advice and services 
of the company secretary and are able to take independent 
professional advice if necessary at the company’s expense
board meetings
in 2012 the board met seven times further business was 
approved by written resolutions of the board on two occasions 
role of the board
the board is responsible for
 deﬁning the commercial strategy and longterm objectives  
of the group
 approving annual operating and capital expenditure budgets 
and any material changes to them 
 overseeing the group’s operations ensuring competent and 
prudent management sound planning a strong system of 
internal control and compliance with all statutory and 
regulatory obligations 
 reviewing the performance of the group in the light of its 
business strategy objectives business plans and budgets 
and ensuring that any necessary corrective action is taken 
 approving any material extension of the group’s activities  
into new businesses or geographic areas and any decision 
to cease to operate all or any material part of the group’s 
business and
 ensuring a mutual understanding of objectives and 
maintaining constructive dialogue with shareholders 
the schedule of matters reserved for the board is reviewed  
at least annually
roles of the chairman chief executive ofﬁcer and  
senior independent director
the board has approved the division of responsibilities 
between the chairman and the chief executive ofﬁcer ceo 
and the role of the senior independent director sid 
the chairman reports to the board and is responsible for the 
leadership and overall effectiveness of the board and setting 
the board’s agenda his responsibilities include
 effective running of the board
 ensuring there is appropriate delegation of authority from the 
board to executive management 
 promoting a culture of openness and debate by facilitating 
the effective contribution of nonexecutive directors in 
particular and ensuring constructive relations between 
executive and nonexecutive directors
 encouraging active engagement by all members of the 
board and
 ensuring that the views of the shareholders are 
communicated to the board as a whole 
mr godsell is able to commit sufﬁcient time to his role as 
nonexecutive chairman of polymetal international  
mr godsell’s other signiﬁcant commitment is membership  
of the south african national planning commission a 
government commission and up to march 2012 was the chair 
of the board of optimum coal holdings a johannesburg listed 
medium size coal mining company in january 2012 he also 
accepted a nonexecutive directorship in the south african 
state owned industrial development corporation however  
the additional time commitment required by this additional  
role is more than offset by the termination of his role on the 
board of optimum coal holdings acquired by glencore 
international plc
board member appointed executive nonexecutive independent
audit risk 
committee 
member 
chairman
remuneration 
committee 
member 
chairman
nomination 
committee 
member
chairman
bobby godsell 29 september 2011 chairman
vitaly nesis
1
29 september 2011 jonathan best
2
29 september 2011 chairman member
russell skirrow
3
29 september 2011 member
leonard homeniuk
4
29 september 2011 chairman member
charles balfour
5
29 september 2011 member member member
konstantin yanakov
6
29 september 2011 marina grönberg
7
29 september 2011 jeanpascal duvieusart 29 september 2011 1
 mr nesis was appointed ceo of jsc polymetal the previous parent and reporting entity of the group on 30 june 2004
2
 mr best was appointed nonexecutive director of jsc polymetal on 28 december 2006
3
 dr skirrow was appointed nonexecutive director of jsc polymetal on 25 september 2008
4
 mr homeniuk was appointed nonexecutive director of jsc polymetal on 29 june 2010
5
 senior independent director
6
 mr yanakov was appointed nonexecutive director of jsc polymetal on 25 september 2008
7
 ms grönberg was appointed nonexecutive director of jsc polymetal on 25 september 2008
governance
annual report 2012 polymetal international plc 93 92 polymetal international plc annual report 2012 governance 
corporate governance
continued
 
audit and risk committee report
dear shareholders
as part of the board’s overall responsibilities – in particular  
as they relate to risk management and internal control – the 
audit and risk committee has a speciﬁc role in the review  
and supervision of the company’s ﬁnancial reporting and 
internal controls in addition it has responsibility for the  
review evaluation and stewardship of the company’s risk 
management processes with particular emphasis on areas  
of possible or likely change
the audit and risk committee is a fully independent body 
consisting only of independent nonexecutive directors with 
relevant skills and experience in ﬁnancial reporting and risk 
management
in 2012 three meetings of the audit and risk committee were 
held and further business conducted by the committee was 
approved by written resolutions on two further occasions  
the audit and risk committee dealt with the following matters
 reviewed and recommended for approval ﬁnancial and risk 
information included in the annual report 2011
 reviewed and recommended for approval polymetal’s results 
for the six months to 30 june 2012
 discussed and approved the committee work plan
 supervised compliance with the company’s antibribery  
and corruption policy
 reviewed the group’s internal audit plan and monitored the 
effectiveness of internal audit
 reviewed the group’s external audit plan and recommended 
for approval the year end audit fee 
 reviewed the actual audit fee in 2012 compared to the 
authorised amount
 approved the terms of engagement including engagement 
letter issued at the start of each audit and the scope of  
the audit
 reviewed the independence and effectiveness of the  
external auditor
 reviewed the critical risks and exposures of the group 
including tax risks
 recommended approval of deloitte llp as external  
auditors and
 reviewed the capability of group’s ﬁnance team  
performed a self assessment review of the committee’s 
effectiveness relative to the requirements of its terms  
of reference
in 2012 the committee focused in particular on risks – 
including those relating to tax following recent rulings – and 
made signiﬁcant progress in improving the quality of external 
and internal reporting
further the audit and risk committee has reviewed the 
approach taken both by management and the external auditors 
in the key judgements and risk areas of the ﬁnancial reporting 
ensuring the fair presentation of the company’s ﬁnancial 
statements supported by an independent external audit
in common with the company’s overall approach to 
governance we have instilled a strong culture of discipline 
throughout our business and are conﬁdent that we have  
a strong system of ﬂexible processes which enable the 
committee to operate effectively
at a meeting of the committee held on 23 april 2013 the 
committee reviewed the ﬁnancial statements for the 2012 
ﬁnancial year and the report from the external auditors  
was considered after due consideration the committee 
recommends the approval of the 2012 ﬁnancial statements  
by the board and shareholders
the committee also reviewed various assurance reports 
provided by the external auditor internal audit and 
management and concluded that – in respect of the 2012 
ﬁnancial year – the system of internal ﬁnancial controls is 
adequate and that there were no signiﬁcant breakdowns  
in internal controls
going forward we as a committee are set to operate 
effectively as a key body scrutinising the reporting internal 
control and risk management process in order to ensure 
transparency and objectivity of the company’s reporting
jonathan best
chairman audit and risk committee
 considers plans and makes recommendations to the  
board for orderly succession to the board and to senior 
management so as to maintain an appropriate balance of 
skills and experience within the company and on the board 
and to ensure progressive refreshing of the board taking 
into account the challenges and opportunities facing  
the company
 keeps under review the leadership needs of the group both 
executive and nonexecutive with a view to ensuring the 
continued ability of the group to compete effectively in the 
marketplace
 before any appointment is made by the board evaluate the 
balance of skills knowledge experience independence  
and diversity of the board and in the light of this evaluation 
prepares a description of the role and capabilities required 
for a particular appointment and the expected time 
commitment and
 reviews the results of the board’s performance evaluation 
process that relate to the composition of the board and 
whether nonexecutive directors are spending enough  
time to fulﬁl their duties
there were no changes to the board structure in 2012 and the 
company has not employed external search consultants
in accordance with the articles of association of the company 
the articles at every annual general meeting one third of the 
directors on the board must retire or if the number of directors 
is not divisible by three the number of directors nearest to one 
third shall retire from ofﬁce but any director who has held ofﬁce 
for three years or more since he or she was last appointed  
or reappointed at the date ﬁxed for the annual general 
meeting must retire in accordance with the uk code all 
directors are subject to annual reelection 
full terms and conditions of appointment of the nonexecutive 
directors are available for inspection at the company’s 
registered ofﬁce
the directors’ biographical details are set out on pages 88 to 
89 and the board considers that each of the directors will be 
an effective contributor to the success of the group following 
their performance evaluations the chairman believes that each 
director standing for reelection continues to be effective  
and to demonstrate commitment to his or her role  
a performance evaluation of the chairman was conducted  
by the board in 2012 and the board believes that the 
chairman continues to be effective and to demonstrate 
commitment to his role 
upon appointment directors receive a full induction including 
information about the company an outline of the role of a 
director and a summary of his or her responsibilities and 
ongoing obligations under legislation regulation and best 
practice a copy of the uk listing authority ‘ukla’ model 
code and details of the company’s policies regarding 
directors’ share dealings and the disclosure of price sensitive 
information directors also receive the company’s guidelines 
on matters reserved for the board and terms of reference of 
the board committees and other governing documents of the 
company directors and chairmen of the board committees 
regularly receive updates on changes to the corporate 
governance and regulatory requirements and other changes 
affecting the company the board is kept informed of relevant 
developments in the company by way of monthly management 
reports including comprehensive information on operating and 
ﬁnancial performance and progress of capital projects a ﬁeld 
trip to the omolon and dukat hubs for nonexecutive directors 
took place in october 2012 
there were two meetings of the nomination committee in 
2012 evaluation of performance of the board its committees 
and individual directors was performed in 2012
the nomination committee at its meetings discussed diversity 
and ways of helping to promote women in the company  
the board welcomes diversity at all levels it believes that the 
right way to approach diversity is not to introduce ﬁxed quotas 
but to seek the right qualities in every appointment where 
competence comes ﬁrst diversity becomes a bonus of such 
an approach despite challenges presented by the industry  
the company operates in it takes steps to promote women 
including hiring women in positions traditionally held by men 
this approach has led to an increase in the number of women 
holding senior positions in the group from 19 in 2011  
to 23 in 2012 
full terms of reference of the nomination  
committee are available at the company’s website  
wwwpolymetalinternationalcom
the board considers that the composition of the board and 
the nomination committee complies with the requirements  
of the uk code
board evaluation
the board carried out a performance evaluation of itself its 
committees the chairman and ceo this was conducted 
without the assistance of an external facilitator in accordance 
with the uk code it is the board’s intention that the evaluation 
process will be externally facilitated every three years
the process consisted of the board discussing its composition 
and operational integrity the balance of executive and 
nonexecutive directors independent directors and directors 
representing major shareholders the balance of skills 
experience and knowledge of the company and international 
diversity the number of board and committee meetings held 
was discussed as well as the performance of each committee 
of the board it was agreed that the board worked effectively 
together as a unit the remuneration of directors and senior 
management was also considered areas for further 
development identiﬁed included the enhancement of formal 
succession planning and the process by which assessment  
of individual board member performance was performed  
the overall conclusion was that the board and its committees 
operated successfully and that directors receive accurate 
timely and clear information ensuring ongoing board 
effectiveness each director continues to contribute effectively 
and to demonstrate commitment to the role including 
commitment of time for board and committee meetings  
and any other duties
governance
annual report 2012 polymetal international plc 95 94 polymetal international plc annual report 2012 governance 
audit and risk committee report
continued
internal control and risk management
the company aims to ensure that all its activities are 
adequately controlled to mitigate risk and support the 
achievement of its objectives while avoiding the creation  
of excessive bureaucracy the system of internal controls  
is designed to manage rather than completely eliminate  
the risk to achieve the company’s business objectives  
in order to bring the residual risk to an acceptable level
in conducting its annual review of the effectiveness of risk 
management and internal control including ﬁnancial operating 
and compliance controls the board considers the key ﬁndings 
from the ongoing monitoring and reporting processes 
management assertions and independent assurance reports 
the board also takes account of material changes and trends 
in the risk proﬁle and considers whether the control system 
including reporting adequately supports the board in achieving 
its risk management objectives
during the course of the year the board considered the 
group’s responsiveness to changes within its business 
environment the board is satisﬁed that there is an ongoing 
process which has been operational during the year and  
up to the date of approval of the annual report for identifying 
evaluating and managing the signiﬁcant risks faced by  
the group
internal audit
the internal audit function supports this aim by providing the 
directors through the audit and risk committee with an 
objective evaluation of the company’s and the group’s 
governance framework the internal audit function also aims  
to raise levels of understanding and awareness of risk and 
control throughout the group
the head of internal audit reports to the ceo and through the 
audit and risk committee to the board of directors where 
relevant the internal audit function will additionally report its 
ﬁndings to members of the company’s executive management
the internal audit function’s annual work plan is designed to 
focus on matters arising from the operational risk matrix and  
is approved by the audit and risk committee in advance
the internal audit function uses an annual selfcertiﬁcation 
process which requires managers throughout the group  
to personally conﬁrm the testing of internal controls and 
compliance with group policies within their business or 
function and the steps taken to address actual or potential 
issues that are identiﬁed
management provides a timely response to issues raised by 
internal audit where possible the issues are resolved within 
one reporting period
internal control framework and activities
the management structure of the group and internal policies 
and procedures are aimed at maintaining a robust control 
framework within the group which will result in the 
achievement of strategic objectives within the set risk tolerance 
levels this framework includes
 appropriate tone set from the top from the board level 
aimed at building the appropriate control environment
 a proper risk identiﬁcation and management system  
for more detail please refer to page 76
 the strict division of responsibilities and adequate delegation 
of authority
 speciﬁc control activities implemented at all levels of the 
group and
 a periodic review of the effectiveness of internal controls
the governance framework reﬂects the speciﬁc structure and 
management of the group where authority and control are 
delegated by the board to different levels from the chief 
executive to the managers of the group’s operating entities 
and then downward to business and project managers  
as appropriate 
within this framework authority is delegated within clearly 
prescribed limits and decisions are escalated where either 
project size or risk proﬁle require a higher level of authority
in addition to controls operating in speciﬁc areas production 
exploration construction procurement the control framework 
also includes a set of common procedures for ﬁnancial 
accounting reporting and budgeting – see details below 
the board conﬁrms that the actions it considers necessary 
have been or are being taken to remedy any failings or 
weaknesses in the group’s system of internal controls  
this has involved considering the matters reported to it and 
developing plans and programmes that it considers are 
reasonable in the circumstances based on the results of the 
review of risk management and internal control activities 
undertaken by the board and the audit and risk committee 
the board considers that the risk management and internal 
control systems are in accordance with the revised guidance 
for directors on the uk code
audit and risk committee 
the audit and risk committee is chaired by mr best and its 
other members are mr skirrow and mr balfour all independent 
nonexecutive directors the directors consider that mr best 
has recent and relevant ﬁnancial experience refer to page 89 
for details of mr best’s experience in addition the other 
members of the committee have a wide range of ﬁnancial  
and other relevant experience
the responsibilities of the audit and risk committee comprise
 monitoring the integrity of the group’s consolidated ﬁnancial 
statements and reviewing its annual and interim ﬁnancial 
statements including but not limited to the consistency of 
and any changes to accounting and treasury policies across 
the company and the group the methods used to account 
for signiﬁcant or unusual transactions the reasonableness  
of signiﬁcant estimates and judgements taking into account 
the views of the external auditor and the clarity and 
completeness of disclosure in the consolidated  
ﬁnancial statements
 considering and making recommendations to the board to 
be put to the shareholders to consider at the annual general 
meeting in relation to the appointment reappointment 
resignation or removal of the group’s external auditors
 overseeing the group’s relationship with its external auditors 
and reviewing the effectiveness of the external audit process 
the committee meets with the external auditors at least once 
a year without management being present to discuss their 
remit and any issues arising from the audit
 reviewing the independence of external auditors and the 
appropriateness of the provision of any nonaudit services  
by the external auditor
 reviewing the effectiveness of the group’s system of internal 
controls and risk management systems
 monitoring and review of the effectiveness of the group’s 
internal audit function in the context of the group’s overall 
risk management system 
 reviewing the group’s policies and procedures for preventing 
and detecting fraud the systems and controls in place for 
preventing bribery and its policies for ensuring that the 
group complies with relevant regulatory and legal 
requirements and
 approving signiﬁcant transactions
full terms of reference of the audit and risk  
committee are available at the company’s website  
wwwpolymetalinternationalcom 
the ultimate responsibility for reviewing and approving the 
interim and annual ﬁnancial statements remains with the  
board the committee gives due consideration to applicable 
laws and regulations the provisions of the uk code and the 
requirements of the listing rules
the audit and risk committee monitors the company’s 
relationship with its external auditors relating to the provision  
of nonaudit services to ensure that auditor objectivity and 
independence is safeguarded this is achieved by disclosure  
of the extent and nature of nonaudit services see note 14  
to the consolidated ﬁnancial statements and the prohibition 
against selected services being provided by the external 
auditor policy on the provision of nonaudit services by the 
external auditor was approved by the committee in 2012 and 
deﬁnes permitted audit and nonaudit services preapproval 
thresholds are in place for the provision of nonaudit services 
by the external auditor for which the preapproval of the  
cfo if below us5000 chairman of the audit and risk 
committee if between us5000 and us20000 and audit 
and risk committee if above us20000 is required above  
a certain threshold if it is determined that the external auditor 
has no obvious competitive advantage in the performance of 
proposed nonaudit services then the provider of those 
services must be chosen by way of a competitive tender 
certain types of nonaudit work may be undertaken by the 
auditors without prior referral to the audit and risk committee 
up to a cumulative annual value of us100000 any further  
nonaudit work is subject to approval by the audit and risk 
committee in further tranches of us100000 in the event  
that the cumulative value of nonaudit fees exceeds 
us500000 in any given year separate approval of the  
audit and risk committee is required explaining why there  
is no threat to independence a copy of the policy is available 
on the company’s website 
the audit and risk committee has considered information 
pertaining to the balance between fees for audit and nonaudit 
work for the company in 2012 and concluded that the nature 
and extent of nonaudit services provided do not present  
a threat to the external auditor’s objectivity or independence
the reappointment of deloitte llp as the group’s external 
auditors is reviewed annually by the audit and risk committee 
deloitte llp were appointed auditors in 2011 with deloitte cis 
having been auditors of jsc polymetal since the last tendering 
process in 2007 
the committee’s assessment of the external auditors’ 
performance and independence underpins its recommendation 
to the board to propose to shareholders the reappointment  
of deloitte llp as auditors until the conclusion of the agm  
in 2014 resolutions to authorise the board to reappoint and 
determine their remuneration will be proposed at the agm  
on 12 june 2013 
the board considers that the audit and risk committee 
complies with the requirements of the uk code
governance
annual report 2012 polymetal international plc 97 96 polymetal international plc annual report 2012 governance 
audit and risk committee report
continued
 
directors’ report
financial reporting systems
the quality of the ﬁnancial accounting and reporting is ensured 
through a set of control procedures in the following areas 
accounting methodology preliminary review of the new 
transactions documentation accounting techniques and 
ﬁnancial closing procedures 
accounting policies are developed centrally for each of the 
group’s subsidiaries and are adapted for the peculiarities  
of each entity and the groupwide policies employees 
responsible for accounting and reporting functions have 
powers to review upcoming transactions and propose 
adjustments where necessary to ensure proper accounting 
and tax treatments 
the use of a centralised erp system in each of the group 
companies ensures uniﬁcation of the business and accounting 
processes the group implements a multilevel set of controls 
over ﬁnancial and accounting data recorded in the system 
these controls involve the accounting department of each 
subsidiary senior management of the subsidiary and controls  
at the head ofﬁce level in addition the accounting and 
reporting data are regularly audited by internal and  
external auditors 
 
procedures for approval of capital and current 
expenditures 
the company prepares annual operating and capital 
expenditure budgets based on its current and strategic  
goals and objectives in addition to periodic control of actual 
ﬁnancial performance versus budgeted a procedure of 
ongoing control and authorisation of expenses is in place  
the current system of preapproval of signiﬁcant transactions 
along with accounting procedures in the erp system  
achieves a level of control over the amount and 
appropriateness of expenses 
treasury operations
the group operates a centralised treasury function which  
is responsible for payments on behalf of all subsidiaries  
of the group use of such a centralised system achieves  
the best level of control over the payments function without 
compromising the speed and reliability of payments  
all interactions with banks on accounts maintenance  
deposits and borrowings and foreign currency transactions  
is also performed at the head ofﬁce level
controls over it systems used in ﬁnancial accounting 
and reporting
the group uses a 1c enterprise 8 erp system for automation  
of everyday enterprise activities these include various 
business tasks of economic and management functions  
such as management accounting business accounting  
hr management crm srm mrp  polymetal also uses the 
erp system for budgeting accounting hr record keeping  
and payroll supply chain management operational reporting  
and procurement the group operates an it management 
framework based on cobit control objectives for information 
and related technology which provides a complete set  
of highlevel requirements to be considered by for effective 
control of each it process
uk bribery act 2010
the company and the directors are committed to ensuring 
adherence to the highest legal and ethical standards this 
must be reﬂected in every aspect of the way in which the 
group operates bribery is a criminal offence in the countries  
in which the group operates and corrupt acts expose the 
group and its employees to the risk of prosecution ﬁnes  
and imprisonment as well as endangering the company’s 
reputation the group has antibribery policies in place which 
extend across all of group’s business dealings in all countries 
and territories in which the group operates and apply to all 
employees of the group as well as relevant business partners 
and other relevant individuals and entities the board attaches 
the utmost importance to this policy and applies a ‘zero 
tolerance’ approach to acts of bribery and corruption by any of 
the group’s employees or by business partners working on the 
group’s behalf and prohibits the payment offer or authorisation 
of bribes the receipt or acceptance of a bribe or the payment 
offer or promise to pay any facilitating payments any breach of 
this policy is regarded as a serious matter by the company and 
is likely to result in disciplinary action
as part of its implementation of internal procedures to comply 
with the uk bribery act the group has in place a formalised 
whistleblowing policy which describes processes in place for 
staff to communicate in conﬁdence concerns about possible 
improprieties unethical or illegal activities and ensures that 
arrangements are in place for independent investigation  
of such matters
copies of the antibribery and corruption policy and the 
whistleblowing policy are available on request from the 
company’s ofﬁces
the directors submit the annual report of polymetal 
international plc together with the audited ﬁnancial  
statements of polymetal international plc for the year  
ended 31 december 2012
principal activities and business review 
polymetal international is a large gold and silver mining 
company operating central processing hubs and a number  
of standalone mines in russia and kazakhstan detailed 
information on the group’s business activities and ﬁnancial 
performance can be found in overview and business review 
sections of this report on pages from 2 to 61 these sections 
also include description of likely future developments and any 
research and development activities held by the company  
and the group
principal risks and uncertainties
refer to pages 77 to 79 for a description of principal risks and 
uncertainties and the group’s response and pages 97 to 98  
for a description of the main features of group’s system of 
internal control for details of ﬁnancial risk management  
please refer to note 30 on page 152
corporate governance 
refer to pages 90 to 98 for a description of the group’s 
corporate governance structure and policies
going concern 
the business of the group its strategy and the factors  
that may affect future performance are described on pages 2 
to 61 of this report the risks in achieving the group’s strategic 
objectives together with assessment of their potential impact 
and mitigating actions are set out on pages 77 to 79 of this 
report the ﬁnancial position of the group its cash ﬂows and 
liquidity are further analysed on pages 62 to 75 of this report
the board having considered all relevant factors related  
to ﬁnancial position risks and business prospects of the 
group and its projected future cash ﬂows has a reasonable 
expectation that the group has adequate resources to 
continue operations in the foreseeable future accordingly the 
group continues to adopt the going concern basis in preparing 
the ﬁnancial statements for the year ended 31 december 2012 
refer also to note 1 of the ﬁnancial statements
financial and business reporting
the board believes that the disclosures set out on pages 2  
to 75 of this annual report provide the information necessary 
for shareholders to assess the company’s performance 
business model and strategy
directors
the directors their status and board committee memberships 
are set out on pages 88 to 92 of the report
directors’ interests
information on directors’ interests in shares of the company  
is set out in the remuneration report on page 108
directors’ indemnities
to the extent permitted by the companies jersey law 1991 
the company indemniﬁed every director or other ofﬁcer of the 
company other than any person whether an ofﬁcer or not 
engaged by the company as auditor out of the assets of the 
company against any liability incurred by him for negligence 
default breach of duty breach of trust or otherwise in relation 
to the affairs of the company this provision does not affect 
any indemnity that a director or ofﬁcer is otherwise entitled to
supplier payment policy
the company’s and the group’s policy is to set the terms  
of payment with suppliers when agreeing the terms of each 
transaction ensure that the suppliers are made aware of the 
terms of payment and abide by the agreed terms of payment 
polymetal international plc itself is a holding company and 
therefore did not have any material trade creditors as at  
31 december 2012
charitable and political donations
the company may not make a political donation to a political 
party or other political organisation or to an independent 
election candidate or incur any political expenditure unless 
such donation or expenditure is authorised by an ordinary 
resolution of shareholders passed before the donation is  
made or the expenditure incurred no such donations were 
made in 2012 2011 none
many of the regions in which the group operates are 
considered socially and economically undeveloped areas of 
russia and kazakhstan the group pursues a responsible 
social strategy in those regions and views the implementation 
of longterm social programmes as a key factor in the 
sustainability of the group’s operations
the group’s social programmes focus on the social and 
economic development priorities in the regions in which it 
operates and aims to improve education and healthcare 
develop local infrastructure promote sports and healthy 
lifestyles promote the cultural and artistic potential of the  
local population and support local communities
as part of this social programme the group has entered into 
social partnership agreements with municipalities and regional 
governments under these social partnership agreements the 
group organises and ﬁnances a variety of humanitarian 
projects and development and maintenance projects in these 
communities in addition the group also undertakes various 
social projects in accordance with the agreements with the 
public organisations of indigenous minorities of the north  
of russia ‘imn’ and in accordance with the group’s own 
charitable programmes more detail on these activities  
can be found on pages 86 to 87 of this annual report
in 2012 the group spent us61 million on social and 
community projects 2011 us40 million
governance
annual report 2012 polymetal international plc 99 98 polymetal international plc annual report 2012 governance 
directors’ report
continued
capital structure
the structure of the company’s share capital is detailed in 
note 31 to the ﬁnancial statements
there are no speciﬁc restrictions on the size of a holding or on 
the transfer of shares which are both regulated by the articles 
of the company and applicable legislation the directors  
are not aware of any agreements between holders of the 
company’s shares that may result in restrictions on the  
transfer of shares or on voting rights
there are a number of agreements that take effect alter or 
terminate upon a change of control of the company such as 
commercial contracts bank loan agreements and employees’ 
share plans none of these is considered to be signiﬁcant in 
terms of their likely impact on the business of the group as  
a whole furthermore the directors are not aware of any 
agreements between the company and its directors or 
employees that provide for compensation for loss of ofﬁce  
or employment that occurs because of a takeover bid 
substantial shareholdings in the company are disclosed  
on page 169
details of employee option schemes are set out in the 
remuneration report on pages 104 to 109
there were no acquisitions of the company’s own shares in 
2012 at 31 december 2012 the group and its subsidiaries 
held no treasury shares 31 december 2011 no shares as at 
31 december 2012 the company had shareholders’ authority 
to purchase up to 38268578 of its own ordinary shares
 
the articles of the company can be altered by a special 
resolution of the company a resolution is a special resolution 
when it is passed by threequarters of the members who 
being entitled to do so vote in person or by proxy at a 
general meeting of the company
 
the board may appoint a person who is willing to act to be a 
director either to ﬁll a vacancy or as an additional director and 
in either case whether or not for a ﬁxed term irrespective of the 
terms of his or her appointment a director so appointed shall 
hold ofﬁce only until the next following annual general meeting 
if not reappointed at such annual general meeting he or she 
shall vacate ofﬁce at its conclusion
 
the company may by ordinary resolution remove any director 
from ofﬁce notwithstanding any provision of the company’s 
articles or of any agreement between the company and such 
director but without prejudice to any claim he or she may have 
for damages for breach of any such agreement no special 
notice needs to be given of any resolution to remove a director 
and no director proposed to be removed has any special right 
to protest against his or her removal the company may by 
ordinary resolution appoint another person in place of a 
director removed from ofﬁce
pursuant to the company’s articles directors have the power 
to allot equity securities as deﬁned in the articles at the 
annual general meeting of the company held in 2012 the 
power to allot equity securities was renewed up to an 
aggregate number of 127 561927 ordinary shares provided 
that the directors’ power in respect of such an amount may 
only be used in connection with a preemptive issue as 
deﬁned in the articles the directors are further empowered 
pursuant to article 124 of the company’s articles to allot 
equity securities for cash as if article 13 of the articles 
preemptive rights did not apply and for the purposes of 
paragraph b of article 124 of the articles the non pre
emptive shares as deﬁned in the articles are an aggregate 
number of up to 19134289 ordinary shares in 2012 the 
company used the above powers to allot 520422 new 
ordinary shares relating to the svetlobor acquisition and  
a further 775000 new ordinary shares in respect of the  
olcha acquisition 
pursuant to article 57 of the companies jersey law 1991  
the company is authorised to make market purchases of 
ordinary shares of the company provided that 
 the maximum number of ordinary shares to be purchased  
is 38268578 ordinary shares 
 the minimum price excluding expenses which may  
be paid for each ordinary share is 1 penny 
 the maximum price excluding expenses which may  
be paid for each ordinary share is the higher of 
 a  an amount equal to 105 per cent of the average of the 
middle market quotations of an ordinary share in the 
company as derived from the london stock exchange 
daily ofﬁcial list for the ﬁve business days immediately 
preceding the day on which the ordinary share is 
contracted to be purchased and 
 b  an amount equal to the higher of the price of the last 
independent trade of an ordinary share and the highest 
current independent bid for an ordinary share as derived 
from the london stock exchange trading system 
 pursuant to article 58a of the companies jersey law 1991 
the company may hold as treasury shares any ordinary 
shares purchased pursuant to the authority conferred  
in this resolution 
the authorities above shall unless previously revoked or 
varied expire at the conclusion of the company’s next annual 
general meeting or if earlier at the close of business on the 
date which is 15 months after the date of this resolution being 
13 september 2013
approval of share issues consideration for which does not 
exceed us15 million is delegated to a committee of the ceo 
the chairman of the audit and risk committee and the sid  
if the chairman of the audit and risk committee andor the 
sid are not available then any independent nonexecutive 
directors may act as their alternates on the committee
dividends
the group’s net proﬁt for the year ended 31 december  
2012 attributable to equity holders of the company was 
us394 million 2011 us 290 million in december 2012  
the company declared a special dividend of us 050 per 
share which was paid in january 2013 the directors have 
proposed the payment of a ﬁnal dividend of us031 per share 
2011 us 020 per share
annual general meeting
the annual general meeting of shareholders of the company 
will take place on 12 june 2013 at 11am bst in le hocq suite 
radisson blu waterfront hotel rue de l ’etau st helier  
jersey je2 3wf channel islands a webcast will be available 
for shareholders who will not be able to attend the meeting  
in person
auditors
each of the persons who is a director at the date of approval  
of this annual report conﬁrms that
 so far as the director is aware there is no relevant audit 
information of which the group’s auditors are unaware and
 the director has taken all steps that he or she ought to have 
taken as a director in order to make himself or herself aware 
of any relevant audit information and to establish that the 
group’s auditors are aware of that information
deloitte llp have expressed their willingness to continue in 
ofﬁce as auditors and a resolution to reappoint them will be 
proposed at the forthcoming annual general meeting the 
audit and risk committee reviews both the level of the audit 
fee and the level and nature of nonaudit fees as part of its 
review of the adequacy and objectivity of the audit process
on behalf of the board
bobby godsell
chairman
24 april 2013
governance
annual report 2012 polymetal international plc 101 100 polymetal international plc annual report 2012 governance 
remuneration report
message from the chairman  
of the remuneration committee 
dear shareholders
over the past year the remuneration committee has made 
good progress in ensuring that our remuneration policy 
continues to evolve in line with best practice and that it is 
aligned with business strategy and performance while 
remaining ﬁrmly focused on supporting the creation of 
sustainable longerterm value to shareholders
the company had a successful year delivering on its tactical 
and strategic objectives as well as delivering superior 
shareholder returns which were well ahead of our peer group 
our total shareholder return during 2012 was 9 including 
11 of dividends compared against the ftse gold mines 
index decreasing by 154 over the same period in addition  
to that in january 2013 the company paid a special dividend 
of us05 per share
the committee’s activities during 2012 included external 
benchmarking of pay levels and a review of our system of 
compensation as well as a detailed analysis of performance 
against targets the results of this review showed that the total 
remuneration package is competitive against our peers and 
that the remuneration policy taken as a whole effectively 
motivates the executive team in its objective of building 
longterm shareholder value no change to the base salary or 
maximum annual bonus opportunity available to the ceo has 
been proposed by the committee as a result of this review 
the committee is aware that the legacy option scheme which 
was put in place prior to the company’s ipo is not in line with 
typical practice for ftselisted companies however the 
scheme will expire in 20132014 and the options currently have 
zero intrinsic value the committee has already taken steps to 
ensure that the remuneration arrangements going forward are 
in line with best practice by adopting relevant changes to the 
unaudited information
remuneration committee
the membership of the remuneration committee is shown in the table below
name role
leonard homeniuk chair
jonathan best member
charles balfour member
all committee members are independent nonexecutive directors
the principal functions of the remuneration committee under its terms of reference are 
 to make recommendations to the board on the group’s policy on the remuneration of executive management 
 to determine within agreed terms of reference the remuneration of the chairman and of speciﬁc remuneration packages for 
each of the executive directors the company secretary and the members of the senior management including pension rights 
and any compensation payments
 to formulate suitable performance criteria for the performancebased pay of the executive management
 to review and oversee all aspects of any executive share scheme operated by or to be established by the company and
 to oversee and advise the board on any major changes in employee beneﬁt structures throughout the company  
or the group
the full terms of reference of the remuneration committee can be found in the corporate governance section on the 
company’s website wwwpolymetalinternationalcom
the committee met twice in 2012 and undertook the following key activities
 approved the remuneration report for the year ended 31 december 2011
 reviewed and approved a more detailed remuneration policy of the company and increased the number of senior executives 
whose annual bonus would depend on achieving individual kpis
 appointed pricewaterhousecoopers llp as independent external remuneration consultants to provide a review of the 
company’s senior executive pay and the market practice for longterm incentive schemes pricewaterhousecoopers llp  
is a member of the remuneration consultants’ group and incorporates the principles of its voluntary code of practice  
into its engagement no other services were provided by pricewaterhousecoopers llp during 2012
 analysed the company’s existing remuneration policy and practices and subsequently reviewed comments from shareholder 
bodies following such discussions in the second part of 2012 and beginning of 2013 the remuneration committee further 
reviewed the company’s remuneration policy and practices to ensure that they remain aligned with the objectives of the 
business and in line with the uk corporate governance code and best practice as a result the committee has proposed the 
introduction of a new longterm incentive scheme the performance share plan to replace the longterm employee incentive 
programme once it expires further information is provided on page 105 
 reviewed proposed changes to the remuneration report regulations and agreed approach to disclosure in future years 
although these regulations are not expected to formally apply to the company the committee believes that as a ftse 100 
company whose shares are listed on the london stock exchange it is an element of good corporate governance to voluntarily 
adopt the new disclosure provisions including the binding vote on remuneration policy at the 2014 agm
further business conducted by the remuneration committee was approved by written resolutions on three occasions 
during its work in 2012 the committee was also aided by the chief executive ofﬁcer and senior ﬁnance and human resources 
executives of the company 
the board considers that the composition and work of the remuneration committee complies with the requirements  
of the uk corporate governance code
executive director remuneration policy 
the company’s executive remuneration policy for directors and senior management is comparable to ftse 100 and other 
international mining companies and is designed to attract and retain high quality executive talent at the top level that will help 
maximise shareholder value
company’s remuneration policy which was approved by the 
board on 24 april 2013 as a result the company is proposing 
the adoption of a new longterm share plan the performance 
share plan at the agm in june 2013 under the plan awards 
will only be earned subject to polymetal’s tsr being positive 
and also outperforming that of the ftse gold mines index over 
a four year period the plan’s main features are described in 
more detail on page 105 of this report and in the notice of the 
2013 annual general meeting other key changes adopted  
by the committee which are consistent with best practice 
include the introduction of signiﬁcant shareholding 
requirements for the executive team deferral requirements 
under the annual bonus plan and clawback provisions for any 
bonus deferred in shares as well as any awards made under 
the performance share plan 
our remuneration policy remains a key element in providing  
a clear framework to motivate incentivise and retain our senior 
management team our objective is to continue developing 
these policies in order to strengthen the link between reward 
and performance thus ensuring that our management team is 
continuously focused on delivering value to our shareholders
on behalf of the committee i welcome all feedback from 
shareholders and look forward to receiving your support  
at the agm 
yours sincerely
leonard homeniuk
chairman remuneration committee
this report sets out the company’s remuneration policy  
and practice for its directors and provides details of their 
remuneration and share interests for the year ended  
31 december 2012 although it is not a requirement of  
jersey company law to have the directors’ remuneration  
report approved by shareholders the board believes that  
as a company whose shares are listed on the london stock 
exchange it is an element of good corporate governance for it 
to do so accordingly a resolution to approve the report will be 
proposed at the annual general meeting of the company on 
12 june 2013
the report has been prepared in accordance with the 
requirements of the large and mediumsized companies and 
groups accounts and reports regulations 2008 the 
“regulations” it also meets the relevant requirements of the 
listing rules of the financial services authority and describes 
how the board applied the principles relating to directors’ 
remuneration in the uk corporate governance code 
in line with the regulations the report has been split into 
audited and unaudited sections 
governance
annual report 2012 polymetal international plc 103 102 polymetal international plc annual report 2012 governance 
remuneration report
continued
the table below sets out the basis for the remuneration of mr nesis the chief executive ofﬁcer and the only executive  
board director 
element policy and objectives details
base salary provides the ﬁxed element of the remuneration package
 competitive base salary to attract and retain high  
calibre executives based on personal proﬁle  
and relevant experience
 takes into account the overall potential value  
of the package 
 the committee reviews base salary annually
 any increases are determined with reference to 
underlying company performance and benchmarking 
against ftse 100 and global mining peers and also 
within the context of salary increases provided to 
employees throughout the group
annual bonus designed to focus on achieving annual performance 
goals which are based on the company’s kpis and 
strategy
 maximum and target annual incentives are expressed  
as a percentage of base salary
 currently paid 100 in cash
 with effect from the 2013 bonus 50 of annual bonus 
earned will be paid in cash and the remaining 50  
will be compulsorily deferred into shares released 
annually to the employee during the next three years  
in equal instalments
 target bonus opportunity – 100 of base salary
 maximum bonus opportunity – 150 of base salary
 performance metrics for the ceo for 2012 and  
2013 include
 – production
 – total cash costs
 – completion of new projects on time and within  
budget and
 – health and safety
 compulsory bonus deferral over three years starting 
from 2013 with one third released each year
 deferred bonus settled in shares to encourage retention 
and alignment with shareholders
 clawback provisions will apply for the unvested portion
the new longterm 
incentive plan
 provides longterm alignment with shareholders’ 
interests
 aligns longterm incentive provision with  
uk market practice
 stretching performance targets reward participants  
for delivering positive absolute and superior relative  
tsr performance against global peers over a  
longterm horizon
 if approved by shareholders at the agm in june 2013 
the plan will replace the legacy longterm employee 
incentive programme see page 109
 the plan provides for annual rolling awards with a  
four year vesting period and an additional mandatory 
holding period of one year following vesting
 performance condition – relative tsr measured against 
the constituents of the ftse gold mines index and 
absolute tsr of polymetal share above zero
 20 vesting for median performance and 100 for 
performance in top decile of the ftse gold mines index
 150 of base salary policy grant to ceo
 clawback provisions will apply for the unvested portion
pension and  
other beneﬁts
the company does not fund any pension contributions  
or beneﬁts except for contributions to mandatory pension 
fund of the russian federation as required by russian law
remuneration policy for other senior executives 
the remuneration policy described above for the chief executive is consistent in structure and key performance indicators with 
the policy of the other members of the company’s executive team and broader management team of the group
whilst the value of remuneration will vary throughout the group depending on the role criticality to the business and level of 
seniority the remuneration of all senior executives consists of base salary an annual bonus and participation in the new ltip 
employees up to three levels below the board up to 200 employees throughout the group are expected to participate in the 
ltip at the discretion of the remuneration committee following its approval at the agm in june 2013
chief executive – remuneration elements 
base salary
mr nesis receives a salary of rub14400000 per annum equivalent to us463000 in 2012 under his employment contract 
with polymetal
following a review of the total remuneration package of the ceo the pay and employment conditions of the broader executive 
team and other employees of the group and benchmarking performed against ftse and global peers it has been decided that 
for a second year in a row there will be no increase in the base salary of the ceo for 2013 
annual bonus
variable remuneration comprises an annual bonus opportunity subject to the achievement of stretching performance criteria
the ceo’s bonus is based on achievement of the following performance metrics
kpis weight
production 30
total cash cost per ounce of gold equivalent produced 30
completion of new projects on time and within budget 30
health and safety 10
the maximum bonus payable is 150 of base salary and the bonus at target performance is 100 of base salary annual bonus 
is payable for achieving target performance on a sliding scale no bonus is payable unless at least 90 of the annual budget for 
the relevant kpis has been achieved the maximum bonus becomes payable for achieving 110 of the annual budget
currently any bonus earned is paid fully in cash starting from any bonus earned in respect of 2013 the committee has 
introduced mandatory deferral of 50 of annual bonus into shares with one third of the shares released each year following  
the year when the respective annual bonus is earned 
the table below summarises the actual kpis achieved in 2012
kpis actual performance
production 1063 koz 31 growth 
total cash cost per ounce of gold equivalent produced us703ge oz 0 increase
completion of new projects on time and within budget amursk pox and kubaka merrillcrowe plants launched
health and safety 0 fatalities second year in a row
as a result the annual bonus receivable by mr nesis for 2012 is us 542000 or 118 of base salary
following a review of the kpis of the ceo and benchmarking against ftse and global peers it has been decided that there will 
be no changes in the ceo’s annual bonus opportunity and structure of kpis for 2013
the new longterm incentive programme
in april 2013 following a detailed review of market practice and the remuneration packages of the company’s executive 
management at the recommendation of the remuneration committee the board of directors proposed to put in place  
a new longterm incentive programme the ‘performance share plan’ after the vesting of awards under the current  
longterm employee incentive programme
the board believes that the performance share plan will ensure alignment of the executive team’s performance with shareholder 
interests and provide reward for superior longterm performance and the creation of sustainable shareholder value the board 
also believes that the plan is in line with and in some elements beyond uk best practice and fully follows the provisions of the 
uk corporate governance code and other relevant guidelines
the key terms of the proposed longterm incentive programme are as follows
design element description 
plan type performance share plan ‘psp’ 
participation ceo and three levels below board 100 to 200 participants at the discretion of the  
remuneration committee
policy award level the proposed award levels are
 ceo 150 of base salary 
 executive committee 100 of base salary 
 below executive committee 50100 of base salary 
frequency of award annual award 
performance period and holding period four year performance period 
 participants will be required to hold any vested shares for a further year 
governance
annual report 2012 polymetal international plc 105 104 polymetal international plc annual report 2012 governance 
remuneration report
continued
design element description 
performance condition relative total shareholder return ‘tsr’ against the constituents of the ftse gold mines  
index in addition no part of the award will vest unless polymetal’s tsr has increased on an 
absolute basis 
 tsr measured in us dollars 
 for the purposes of measuring tsr a three month averaging period at the start and end of the 
performance period will be used 
 retesting of the performance condition in future years will not be allowed under any circumstances
 unvested awards will be subject to a clawback provision 
vesting schedule peers are ranked and polymetal’s position determines vesting
 0 vest below median
 20 vests at median
 100 vests at top decile performance and above 
 straightline vesting between these points
 0 vests if absolute tsr is negative regardless of relative performance 
dilution awards will normally be settled by newly issued shares subject to the following dilution limits
 the number of shares issued under the discretionary executive schemes cannot exceed 5  
of the issued share capital of the company in any ten year rolling period
 the overall number of shares issued under all share plans including any all employee plans  
cannot exceed 10 of the issued share capital of the company in any ten year rolling period
the performance share plan will be put to a shareholder vote at the agm in june 2013 and following approval by shareholders 
will be implemented upon vesting of the current employee incentive programme see details on page 109
shareholding requirements
there is an increasing view from shareholders and other commentators that there should be a requirement for signiﬁcant 
longterm shareholding by senior executives therefore the committee is proposing to implement substantial minimum 
shareholding requirements for the chief executive ofﬁcer and the executive management team with the following minimum 
levels set
 chief executive ofﬁcer – 500 of base salary
 chief financial ofﬁcer – 250 of base salary
 other executives reporting to ceo – 100 of base salary
these requirements have been set by the committee at a level that is signiﬁcantly above typical market practice for companies  
of polymetal’s size in keeping with the company’s objective to be consistent with best practice and to further strengthen the 
alignment between executives and shareholders the position should be built over four years and can include vested shares 
received under shortterm and longterm remuneration schemes 
pension and retirement beneﬁts
save for the group’s contributions to the mandatory pension fund of the russian federation during the ﬁnancial year ended  
31 december 2012 no amounts were set aside or accrued by the group to provide pension retirement or other beneﬁts to the 
directors and senior management 
executive director – appointment and service contract
mr nesis has entered into an appointment letter with the company in relation to his appointment as a director this appointment 
took effect from the date of admission of shares to trading on the lse on 28 october 2011 and is subject to annual reelection 
mr nesis does not receive any fees in respect of his appointment as a director of polymetal international plc but is entitled to 
reimbursement of his reasonable expenses incurred in relation to the carrying out of his duties as a director appointment of  
mr nesis as a director may be terminated at any time in accordance with the articles of association mr nesis can terminate his 
appointment as a director on one month’s notice he is not entitled to receive any compensation in respect of his role as director 
on termination of this appointment
on 25 july 2008 jsc polymetal a 100 subsidiary of the company incorporated in russia entered into an employment 
contract with mr nesis as its chief executive ofﬁcer the contract became effective on 1 september 2008 and was 
subsequently amended on 5 september 2011 the contract was entered into for a period of ﬁve years and expires on 31 august 
2013 under the terms of the contract the chief executive ofﬁcer undertakes to perform general management of jsc polymetal 
arrange for its commercial economic social and other activities with a view to provide for jsc polymetal’s further development 
the employment contract does not contain any speciﬁc grounds for early termination the contact can be terminated at any time 
on one month’s notice by mr nesis and with immediate effect by jsc polymetal in accordance with the russian labour law this 
could result in compensation of up to a maximum of three average monthly salaries
remuneration policy – nonexecutive directors
the fees of the independent nonexecutive directors are set by reference to those paid by other ftse 100 mining companies 
fees are reviewed but not necessarily increased annually no fees are paid to the nonindependent nonexecutive directors 
the table below shows the remuneration policy in place for nonexecutive directors
role fee
nonexecutive chairman £250000
senior independent director no additional fee
independent nonexecutive director basic fee £100000
additional fees
audit and risk committee chairman £30000
chairmen of other committees £15000
committee membership fee not payable to the committee chairmen £10000
board and committee meeting attendance fee £3000 per meeting
nonexecutive directors are not entitled to receive any pension beneﬁts or options in the company 
nonexecutive directors’ letters of appointment 
nonexecutive directors do not have service contracts but their terms are set out in a letter of appointment the appointment of 
each of the nonexecutive directors took effect on and from admission until the next agm of the company subject to annual 
reelection
the appointment of any nonexecutive director may be terminated at any time in accordance with the articles of association 
the appointment of each nonexecutive director may be terminated by either party on one month’s notice
a nonexecutive director is not entitled to receive any compensation on termination of his appointment each nonexecutive 
director is subject to conﬁdentiality restrictions without limitation in time
director date of letter of appointment
notice period by  
company or director
bobby godsell 29 september 2011 1 month
charles balfour 29 september 2011 1 month
konstantin yanakov 29 september 2011 1 month
jeanpascal duvieusart 29 september 2011 1 month
marina grönberg 29 september 2011 1 month
jonathan best 29 september 2011 1 month
russell skirrow 29 september 2011 1 month
leonard homenuik 29 september 2011 1 month
the full terms and conditions of appointment of nonexecutive directors are available for inspection at the company’s registered 
ofﬁce in jersey
amounts paid to third parties
no consideration was paid to or became receivable by third parties for making available the services of any person as a director 
of the company or while a director of the company as a director of any of the company’s subsidiary undertakings or 
otherwise in connection with the management of the company or any undertaking during the year ended 31 december 2012
total shareholder return
the total shareholder return graph below represents performance of the company’s shares against the ftse 100 index and 
ftse gold mines index for the period since the admission of the company’s shares to trading on the london stock exchange  
to 31 december 2012 the committee considers that the selected ftse 100 index and ftse gold mines index are the most 
appropriate benchmarks for the company as it is a constituent of both of these indexes and its performance is measured 
externally and internally against them
 
governance
annual report 2012 polymetal international plc 107 106 polymetal international plc annual report 2012 governance 
remuneration report
continued
20
40
60
80
100
120
140
total shareholder return    
 polymetal  ftse gold mines index  ftse 100
28 dec
12
28 oct
12
28 aug
12
28 jun
12
28 apr
12
28 may
12
28 jul
12
28 sep
12
28 nov
12
28 feb
12
28 mar
12
28 jan
12
28 dec
11
28 oct
11
28 nov
11
directors’ share interests
as at 31 december 2012 the directors who served during the year and subsequently together with their and their families’ 
beneﬁcial interests in shares in the company were as follows
as at 31 december 2012 as at 31 december 2011
director
number of 
shares
percentage of 
issued share 
capital 
number of 
shares
percentage of 
issued share 
capital 
bobby godsell –000 –000
vitaly nesis
1
3000000 078 3000000 078
jonathan best –000 –000
russell skirrow –000 –000
leonard homeniuk –000 –000
charles balfour –000 –000
konstantin yanakov –000 –000
marina grönberg –000 –000
jeanpascal duvieusart –000 –000
1
  in addition to the 3000000 shares held by mr nesis mr nesis has been granted the option to acquire a number of shares in 2013 or 2014 pursuant to a prescribed  
formula which is linked to share price performance the maximum number of shares that mr nesis can acquire is 12000000 see page 109 for further details subsequent  
to 31 december 2012 vitaly nesis acquired an additional 100000 shares in the company taking his holding to 3100000 shares
audited information
directors’ emoluments us
name of director
feesbasic 
salary
pension 
contributions annual bonus total 2012 total 2011
executive
vitaly nesis 458051 37261 542091 1037403 1 138013
nonexecutive
bobby godsell 449253 – – 449253 79579
jonathan best 264997 – – 264997 160371
russell skirrow 208051 – – 208051 184304
leonard homeniuk 236220 – – 236220 164815
charles balfour 258418 – – 258418 46563
konstantin yanakov – – – – –
marina grönberg – – – – –
jeanpascal duvieusart – – – – –
total nonexecutive 1416939–– 1416939 635634
total 187 4990 37 261 542091 2454342 1773646
note where directors were previously directors of jsc polymetal their remuneration for the full 12 months 2012 and 2011 is shown
directors’ share options under the longterm employee incentive programme
director
at  
1 january  
2012
awarded during 
the year
exercised during 
the year
at  
31 december 
2012 expiry date
weighted average  
exercise price
vitaly nesis 12000000 –– 12000000 11 june 201311 june 2014  
at the election of participant
1 pence
no share options vested or were exercised in 2012 there have been no variations to the terms and conditions or performance 
criteria for share options during the ﬁnancial year no options were granted to mr nesis or other directors in 2012
the longterm employee incentive programme ‘eip’ was adopted in september 2010 prior to the company’s ipo to reward 
key senior executives including the ceo for increasing the share price and delivering superior performance over a longterm 
horizon a total of over 150 employees participate in the eip selected at the discretion of the board 
the principal terms of the eip are summarised below
 the total size of the bonus fund is to be determined according to a prescribed formula which is linked to share  
price performance
 exercise price shares from the bonus fund may be purchased by participants at the price of one penny per share
 maximum number of shares 30 million shares for the eip as a whole maximum number of shares awarded to each 
participant is described in performance conditions below
 performance conditions the number of shares awarded to each participant from the bonus fund is based on certain 
nonﬁnancial performance criteria such as job performance and career growth potential all at the discretion of the board  
or the executive management
 the employee incentive programme vesting date is 11 june 2013 and may with respect to a particular participant  
at such participant’s discretion during an election window of 11 june 2013 to 11 july 2013 be postponed for one year  
until 11 june 2014 
 vesting period if 2013 is chosen is 26 years which is shorter than the three years recommended by the uk code  
if 2014 is chosen the vesting period is 36 years
 vesting mechanism in the base case scenario the aggregate number of shares comprising the bonus fund will  
be determined on june 11 2013 the ‘programme implementation date’ according to the following formula 
bf  m  x – s  x where m – maximum number of shares x – average weighted price of a share quotation period  
from 11 december 2012 to 11 june 2013 and 
s – strike price us1674 per share adjusted by the amounts of dividends paid  
 
eg if the share price during the quotation period is us1800 then the bonus fund will be determined  
as 1800 – 16741800  7 of the maximum number of shares
the possible deviations from the base case scenario include
 extension of the participants’ rights to purchase shares from the bonus fund by one year at the sole discretion of each 
participant until 11 june 2014 in this case x will be equal to the weighted average price of polymetal shares in us dollars 
during the quotation from 11 december 2013 to 11 june 2014 and s will be equal to us1875 per share and
 the option to execute the rights to purchase all or part of the shares from the bonus fund before the programme 
implementation date under certain circumstances such as change of control of the company in this case both  
x and s will be adjusted accordingly
each time the dividends upon shares are paid prior to the exercise date the strike shall be reduced by the amount  
calculated according to the following formula
d112t365 where d – dividend paid per share  
t – number of calendar days from the date of payment of dividends to the relevant exercise date
 
additional disclosures required by the regulations 
the market price of the ordinary shares at 31 december 2012 was £1175 us 1908 and the range during the year  
was £765 us 1175 to £1189 us 1926 this compares with the minimum price for any eip vesting of 1674 
approval
this report was approved by the board of directors on 24 april 2013 and signed on its behalf by
leonard homeniuk
chairman remuneration committee
governance
annual report 2012 polymetal international plc 109 108 polymetal international plc annual report 2012 financial statements 
directors’ responsibility statement independent auditor’s report to the members  
of polymetal international plc
the directors are responsible for preparing the annual report and ﬁnancial statements in accordance with applicable law  
and regulations 
company law requires the directors to prepare ﬁnancial statements for each ﬁnancial year under that law the directors are 
required to prepare the group ﬁnancial statements in accordance with international financial reporting standards as adopted 
for use in the european union ifrs the ﬁnancial statements are required by law to be properly prepared in accordance with 
the companies jersey law 1991 international accounting standard 1 requires that ﬁnancial statements present fairly for each 
ﬁnancial year the group’s ﬁnancial position ﬁnancial performance and cash ﬂows this requires the faithful representation  
of the effects of transactions other events and conditions in accordance with the deﬁnitions and recognition criteria for assets 
liabilities income and expenses set out in the international accounting standards board’s ‘framework for the preparation and 
presentation of ﬁnancial statements’
in virtually all circumstances a fair presentation will be achieved by compliance with all applicable ifrs however the directors 
are also required to
 properly select and apply accounting policies
 present information including accounting policies in a manner that provides relevant reliable comparable and 
understandable information
 provide additional disclosures when compliance with the speciﬁc requirements in ifrs are insufﬁcient to enable users  
to understand the impact of particular transactions other events and conditions on the entity’s ﬁnancial position and  
ﬁnancial performance and 
 make an assessment of the company’s ability to continue as a going concern
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the 
ﬁnancial position of the company and enable them to ensure that the ﬁnancial statements comply with the companies jersey 
law 1991 they are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included on the 
company’s website legislation in the uk and jersey governing the preparation and dissemination of ﬁnancial statements may 
differ from legislation in other jurisdictions
responsibility statement 
we conﬁrm that to the best of our knowledge
 the ﬁnancial statements prepared in accordance with international financial reporting standards give a true and fair view  
of the assets liabilities ﬁnancial position and proﬁt or loss of the company and the undertakings included in the consolidation 
taken as a whole and
 the management report which is incorporated into the directors’ report includes a fair review of the development and 
performance of the business and the position of the company and the undertakings included in the consolidation taken  
as a whole together with a description of the principal risks and uncertainties that they face
by order of the board
bobby godsell
chairman of the board of directors
vitaly nesis
chief executive
24 april 2013
we have audited the group ﬁnancial statements the ﬁnancial statements of polymetal international plc for the year ended  
31 december 2012 which comprise the consolidated income statement the consolidated statement of comprehensive 
income the consolidated balance sheet the consolidated statement of cash flows the consolidated statement of changes 
in equity and the related notes 1 to 35 the ﬁnancial reporting framework that has been applied in their preparation is applicable 
law and international financial reporting standards ifrs as adopted by european union 
this report is made solely to the company’s members as a body in accordance with article 113a of the companies jersey 
law 1991 our audit work has been undertaken so that we might state to the company’s members those matters we are 
required to state to them in an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept 
or assume responsibility to anyone other than the company and the company’s members as a body for our audit work for this
report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of the 
ﬁnancial statements and for being satisﬁed that they give a true and fair view our responsibility is to audit and express an opinion 
on the ﬁnancial statements in accordance with applicable law and international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s ethical standards for auditors
scope of the audit of the ﬁnancial statements
an audit involves obtaining evidence about the amounts and disclosures in the ﬁnancial statements sufﬁcient to give reasonable 
assurance that the ﬁnancial statements are free from material misstatement whether caused by fraud or error this includes  
an assessment of whether the accounting policies are appropriate to the group’s circumstances and have been consistently
applied and adequately disclosed the reasonableness of signiﬁcant accounting estimates made by the directors and the overall 
presentation of the ﬁnancial statements in addition we read all the ﬁnancial and nonﬁnancial information in the annual report  
to identify material inconsistencies with the audited ﬁnancial statements if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report
opinion on ﬁnancial statements
in our opinion the ﬁnancial statements
 give a true and fair view of the state of the group’s affairs as at 31 december 2012 and of the group’s proﬁt for the year  
then ended
 have been properly prepared in accordance with ifrs as adopted by european union and
 have been properly prepared in accordance with the companies jersey law 1991
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies jersey law 1991 requires us  
to report to you if in our opinion
 proper accounting records have not been kept by the parent company or proper returns adequate for our audit have  
not been received from branches not visited by us or
 the ﬁnancial statements are not in agreement with the accounting records and returns or
 we have not received all the information and explanations we require for our audit
under the listing rules we are required to review the part of the corporate governance statement relating to the company’s 
compliance with the nine provisions of the uk corporate governance code speciﬁed for our review
other matters
in our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance  
with the provisions of the uk companies act 2006 as if that act had applied to the company
we have reviewed the directors’ statement contained within the directors’ report in relation to going concern as if the 
company had been incorporated in the uk and have nothing to report to you in that respect
christopher thomas
for and on behalf of deloitte llp
chartered accountants and recognised auditor
london uk
24 april 2013
financial statements
annual report 2012 polymetal international plc 111 110 polymetal international plc annual report 2012 financial statements 
consolidated income statement
consolidated income statement of comprehensive income
 
consolidated balance sheet
year ended
notes
31 december 
2012
us’000
31 december 
2011
us’000
revenue 6 1854065 1326430
cost of sales 7 889565 635337
gross proﬁt 964500 691093
general administrative and selling expenses 11 181648 160026
other operating expenses 12 153855 78344
share of loss of associates and joint ventures 20 1804 1952
operating proﬁt 627193 450771
lossproﬁt on disposal of subsidiaries 4 10709 4931
gain on acquisition of remaining interest in joint venture 20 21051 –
net foreign exchange gainslosses 6677 13634
change in fair value of derivative ﬁnancial instruments 2930 – 1855
change in fair value of contingent consideration liability 2930 4717 6828
finance income 4657 4208
finance costs 15 26787 28746
proﬁt before income tax 617365 408847
income tax expense 16 216204 118985
proﬁt for the ﬁnancial year 401161 289862
proﬁt for the year attributable to
equity shareholders of the parent 394348 289323
noncontrolling interest 6813 539
401161 289862
us us
earnings per share
basic 31 103 079
diluted 31 103 074
year ended
31 december 
2012  
cents per 
share
31 december 
2011  
cents per 
share
31 december 
2012
’000
31 december 
2011
’000
final dividend proposed in relation to the year note 17 31 20 119034 76537
special dividend declared note 17 50 – 191343 –
year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
proﬁt for the ﬁnancial year 401161 289862
other comprehensive incomeloss
effect of translation to presentation currency 110550 115474
total comprehensive income for the ﬁnancial year 511711 17 4388
year ended
31 december 
2012
us’000
31 december 
2011
us’000
total comprehensive income for the ﬁnancial year attributable to
equity shareholders of the parent 494776 185033
noncontrolling interest 16935 10645
511711 17 4388
 
 
notes 
31 december
2012
us’000
31 december
2011
us’000
assets    
property plant and equipment 18 2149400 190197 4
goodwill 19 115106 108587
investments in associates and joint ventures 20 29822 23558
noncurrent loans 21 14811 8962
deferred tax asset 16 58024 62118
noncurrent inventories 22 100972 58222
total noncurrent assets 2468135 2163421
current inventories 22 859856 599312
vat receivable 103192 111887
trade and other receivables 23 107596 67 991
prepayments to suppliers 31044 38912
income tax prepaid 14481 11787
cash and cash equivalents 24 18622 658795
total current assets 1134791 1488684
total assets 3602926  3652105 
liabilities and shareholders’ equity    
accounts payable and accrued liabilities 27 312218 107404
current borrowings 25 244211 348429
share purchase obligation under mto –  534597
income tax payable 63021 13366
other taxes payable 72119 21327
environmental obligations 26 1565 – 
total current liabilities 693134 1025123
noncurrent borrowings 25 619612 654666
contingent consideration liability 29 25276 22290
deferred tax liability 16 75938 79342
environmental obligations 26 65128 54463
other noncurrent liabilities 134 1623
total noncurrent liabilities 786088 812384
total liabilities 1479222 1837507
net assets 2123704  1814598 
stated capital account 31 1576123 1566386 
treasury shares in jsc polymetal –  395
sharebased compensation reserve 119291  59239 
translation reserve 54366 151029
share purchase obligation under mto 1 –  561659
retained earnings 482656  753572 
total equity attributable to the parent 2123704  1666114 
noncontrolling interest –  148484 
total equity 2123704  1814598 
the notes on pages 116 to 159 form part of these ﬁnancial statements
these ﬁnancial statements are approved and authorised for issue by the board of directors on 24 april 2013 and signed  
on its behalf by
vitaly nesis bobby godsell
chief executive chairman of the board of directors
24 april 2013
financial statements
annual report 2012 polymetal international plc 113 112 polymetal international plc annual report 2012 financial statements 
consolidated statement of cash ﬂows
 
consolidated statement of changes in equity
year ended
 notes 
31 december 
2012  
us’000
31 december 
2011
us’000
net cash generated by operating activities 34 495835 211956
cash ﬂows from investing activities     
purchases of property plant and equipment 18 350807 461632
consideration for acquisitions 4 20797 4761
proceeds from disposal of subsidiary  25000  5300 
convertible loan advanced to polygon gold 20 10000 – 
other loans advanced net  4559 4249
interest received  5686  143 
contingent consideration payment 29 1227 6943
net cash used in investing activities  356704 472142
cash ﬂows from ﬁnancing activities     
borrowings obtained 25 1236036  1695078 
repayments of borrowings 25 1384913 1498518
proceeds from issuance of shares of the company 31 –  762641 
purchase of treasury shares in the company 31 –  46649
payments on ﬁnance lease obligations  –  5217
mto and squeezeout obligation repayment  568837 – 
dividends paid  76537 – 
net cash used ingenerated by ﬁnancing activities  794251 907335 
net decreaseincrease in cash and cash equivalents  655120 647149 
cash and cash equivalents at the beginning of the ﬁnancial year 24 658795  11056 
effect of foreign exchange rate changes on cash and cash equivalents  14947  590 
cash and cash equivalents at the end of the ﬁnancial year 24 18622  658795 
notes
number of 
polymetal 
international 
shares 
outstanding
stated capital 
account
sharebased 
compensation 
reserve
treasury 
shares 
in jsc 
polymetal
translation 
reserve
share 
purchase 
obligation
retained 
earnings
total equity 
attributable to 
the parent
non
controlling 
interest total equity
balance at  
1 january 2011 na 865483 7896 457 49443 – 537473 1360952 – 1360952
total 
comprehensive 
income – – – – 104290 – 289323 185033 10645 174388
amortisation of 
bonus received 
from depositary – 819 – – – – – 819 819
sharebased 
compensation – – 56266 – – – – 56266 850 57116
issue of treasury 
shares in 
exchange  
for assets 431 66966 – 24 – – – 66990 66990
issuance of 
ordinary shares 
under issf 31 332641770 – – – – – – – –
issuance of  
share on ipo 31 53350000 762641 – – – – – 762641 762641
purchase of 
treasury shares  
in the company 31 3305988 46649 – – – – – 46649 46649
share purchase 
obligation  
under mto 31 – – – – – 561659 – 561659 561659
reclassiﬁcation  
to noncontrolling 
interest – 82874 4923 38 2704 – 73224 158279 158279 –
balance  
at 31 december 
2011 382685782 1566386 59239 395 151029 561659 753572 1666114 148484 1814598
total 
comprehensive 
income – – – – 100428 – 394348 494776 16935 511711
amortisation of 
bonus received 
from depositary – – – – – – 1259 1259 – 1259
sharebased 
compensation – – 53515 – – – – 53515 764 54279
issue of shares  
in exchange for 
assets 4 520422 9737 – – – – – 9737 – 9737
dividends 17 – – – – – – 267880 267880 – 267880
acquisition of 
noncontrolling 
interest under 
mto and 
squeezeout 1 – – 6537 395 3765 561659 398643 166183 166183 –
balance  
at 31 december 
2012 383206204 1576123 119291 – 54366 – 482656 2123704 – 2123704
financial statements
annual report 2012 polymetal international plc 115 114 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
1 general
corporate information
polymetal international plc the company was incorporated on 29 july 2010 as a public limited company under companies 
jersey law 1991
on 2 november 2011 the company was admitted to the ofﬁcial list of the uk listing authority and commenced trading on  
the london stock exchange’s premium listed market the company became the new ultimate parent company of joint stock 
company polymetal jsc polymetal and its subsidiaries joint ventures and associates the jsc polymetal group and owned 
8326 of the issued share capital of jsc polymetal as at 31 december 2011 with 811 held by third parties and 863 
effectively held as treasury shares
on 17 february 2012 the company executed the mandatory tender offer ‘the mto’ made on 23 november 2011 at a cost  
of us534 million acquiring 30317 610 shares in jsc polymetal via its whollyowned subsidiary pmtl ltd
on execution of the mto otkritie securities ltd tendered the shares it had legally acquired in jsc polymetal which for 
accounting purposes were then effectively transferred from being shown as treasury shares in jsc polymetal to being held by 
pmtl ltd with a corresponding reduction in the level of the noncontrolling interest the group settled the loan balance with 
otkritie securities ltd through a payment of us250 million
through these two transactions the company’s holding in jsc polymetal increased to 397 287 592 ordinary shares 
representing approximately 9948 of the total share capital of jsc polymetal on 20 april 2012 the company delivered notice 
of its intention to proceed with a statutory squeeze out ie purchase of the remaining jsc polymetal shares on terms and within 
the period as provided under applicable russian law in the period to 10 july 2012 2087 408 additional shares in jsc polymetal 
were acquired such that at that date the company’s holding in jsc polymetal had further increased to 399375000 shares 
representing 100 of the total share capital of jsc polymetal
total cash outﬂows in respect of the mto and squeeze out for the year amounted to us569 million offsetting the share 
purchase liability recognised when the offer was initially made this comprised mto payments of us534 million and other 
payments of us35 million
on execution of the mto and the squeeze out the noncontrolling interest balance in reserves was derecognised in proportion 
to the percentage acquired in the period with the minority’s share of the other reserves previously transferred to ‘noncontrolling 
interests’ on the original formation of the group transferred back the treasury shares balance and the share purchase obligation 
reserve were also eliminated the difference of us399 million was recognised within retained earnings
signiﬁcant subsidiaries
as disclosed above at 31 december 2012 the company held an effective 100 interest in jsc polymetal through this 
subsidiary the company held the following signiﬁcant mining and production subsidiaries
effective interest held  
by jsc polymetal 
name of subsidiary deposits
country of  
incorporation
31 december  
2012
31 december  
2011
cjsc gold of northern urals vorontsovskoye russia 100 100
llc okhotskaya mining and exploration company khakandjinskoye russia 100 100
yurievskoye
avlayakan
ozernoye
cjsc magadan silver dukat russia 100 100
lunnoye
arylakh
goltsovoye
mayskoye gold mining company llc mayskoye russia 100 100
omolon gold mining company llc kubaka russia 100 100
birkachan
sopka kvartsevaya
albazino resources ltd albazino russia 100 100
amur hydrometallurgical plant llc na russia 100 100
jsc varvarinskoye varvarinskoye kazakhstan 100 100
signiﬁcant shareholders
at 31 december 2012 the signiﬁcant shareholders in the company were pearlmoon limited the ultimate beneﬁcial owner  
of which is petr kellner 2083 powerboom investments limited the ultimate beneﬁcial owner of which is alexander nesis 
1787 vitalbond limited and its afﬁliated companies the ultimate beneﬁcial owner of which is alexander mamut 1011 
mbc development limited the ultimate beneﬁcial owner of which is mr alexander mosionzhik 444 and staroak limited  
the ultimate beneﬁcial owner of which is mr oleg shuliakovskii 426 
 
following the admission to trading of shares issued in respect of zao ‘maminskaya gornorudnaya kompania’ acquisition  
see note 35 on 9 april 2013 the signiﬁcant shareholders are as follows pearlmoon limited 2050 powerboom investments 
limited 1759 vitalbond 995 mbc development limited 436 staroak limited 419 and morgan stanley  co 
international plc 411 
going concern
in assessing its going concern status the directors have taken account of the group’s ﬁnancial position anticipated future 
trading performance its borrowings and other available credit facilities and its capital expenditure commitments and plans
the board is satisﬁed that the group’s forecasts and projections having taken account of reasonably possible changes 
in trading performance show that the group has adequate resources to continue in operational existence for at least the  
next 12 months from the date of this document and that it is appropriate to adopt the going concern basis in preparing 
these consolidated ﬁnancial statements
basis of presentation
the group’s annual consolidated ﬁnancial statements for the year ended 31 december 2012 are prepared in accordance with 
international financial reporting standards ifrs as issued by the international accounting standards board iasb and 
endorsed by the european union ifrs includes the standards and interpretations approved by the iasb including international 
accounting standards ias and interpretations issued by the international financial reporting interpretations committee ifric
the ﬁnancial statements have been prepared on the historical cost basis except for certain ﬁnancial instruments which are 
measured at fair value 
the accounting policies set out in note 2 have been applied in preparing the consolidated ﬁnancial statements for the year 
ended 31 december 2012 
reclassiﬁcations
where a change in the presentational format between the prior year and current year ﬁnancial statements has been made  
during the period comparative ﬁgures have been restated accordingly 
in the current period shipping expenses have been presented within cost of sales rather than within general administrative and 
selling expenses the comparative information has been revised to be on a consistent basis with costs of us96 million for the 
year ended 31 december 2011 being reclassiﬁed
at 31 december 2012 us39 million of ore stock piles at omolon were classiﬁed as noncurrent inventories following 
management’s assessment that these stock piles will be processed starting from 2016 previously these amounts were  
included within current metal inventories the comparative ﬁgures of us14 million have been restated to be presented  
on a consistent basis
at 31 december 2012 us4 million on capital spare parts were classiﬁed as property plant and equipment rather than  
noncurrent inventories the comparative ﬁgures of us23 million have been restated to be presented on a consistent basis
financial statements
annual report 2012 polymetal international plc 117 116 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
1 general continued
standards and interpretations in issue not yet adopted
the following new or amended ifrs accounting standards not yet adopted may have a signiﬁcant impact on the group
ifric 20 stripping costs in the production phase of a surface mine provides a model for accounting for costs associated 
with the removal of waste during the production phase of a surface mine including guidance on the apportionment of the 
costs incurred for obtaining a current and future beneﬁt and how capitalised costs are depreciated this interpretation applies 
to annual periods beginning on or after 1 january 2013
the following new amended or revised ifrs accounting standards and interpretations not yet adopted are not expected  
to have a signiﬁcant impact on the group
ifrs 9 financial instruments – classiﬁcation and measurement reﬂects the ﬁrst phase of the iasb’s three stage project  
to replace ias 39 the ﬁrst phase deals with the classiﬁcation and measurement of ﬁnancial assets and ﬁnancial liabilities  
the standard applies to annual periods beginning on or after 1 january 2015
ifrs 10 consolidated financial statements replaces the portion of ias 27 consolidated and separate financial statements  
that addresses accounting for consolidated ﬁnancial statements and sic12 consolidation – special purpose entities ifrs 10 
provides a single basis for consolidation with a new deﬁnition of control the standard applies to annual periods beginning  
on or after 1 january 2014
ifrs 11 joint arrangements replaces ias 31 interests in joint ventures and sic13 jointlycontrolled entities – nonmonetary 
contributions by venturers under ifrs 11 a joint arrangement is classiﬁed as either a joint operation or a joint venture and the 
option to proportionately consolidate joint ventures has been removed interests in joint ventures must be equity accounted  
this standard applies to annual periods beginning on or after 1 january 2014
ifrs 12 disclosures of interests in other entities will accompany ifrs 10 and ifrs 11 this standard combines the disclosure 
requirements previously covered by ias 27  related to consolidated ﬁnancial statements ias 31 interest in joint ventures and  
ias 28 investments in associates as well as including additional disclosure requirements this standard applies to annual 
periods beginning on or after 1 january 2014
ifrs 13 fair value measurement provides a single framework for all fair value measurements and applies to annual periods 
beginning on or after 1 january 2014
an amendment to ias 1 presentation of financial statements which requires items to be grouped in other comprehensive 
income based on whether those items are subsequently reclassiﬁed to proﬁt or loss the amendment is to be applied  
for annual periods beginning on or after 1 july 2012
an amendment to ias 19 employee beneﬁts is to be applied retrospectively for annual periods beginning on or after  
1 january 2013
amendments have been made to ias 27 consolidated and separate financial statements and it has been reissued as ias 27 
separate financial statements the revised standard prescribes the accounting and disclosure requirements for investments in 
subsidiaries joint ventures and associates when an entity prepares separate ﬁnancial statements the accounting and disclosure 
requirements for investments in subsidiaries joint ventures and associates in consolidated ﬁnancial statements are prescribed by 
ifrs 10 ifrs 11 and ifrs 12 the revised standard is to be applied for annual periods beginning on or after 1 january 2013 
amendments have been made to ias 28 investments in associates and it has been reissued as ias 28 investments in 
associates and joint ventures the revised standard prescribes the application of the equity method when accounting for 
investments in associates and joint ventures the revised standard is to be applied for annual periods beginning on or after  
1 january 2013
amendments to ifrs 1 government loans and to ifrs 7 disclosures – offsetting financial assets and financial liabilities  
are effective for annual periods on or after 1 january 2013
amendments to ias 32 financial instruments – presentation is effective for annual periods on or after 1 january 2014
2 signiﬁcant accounting policies
basis of consolidation
subsidiaries
the consolidated ﬁnancial statements of the group include the ﬁnancial statements of the company its subsidiaries and  
if applicable special purpose entities from the date that control effectively commenced until the date that control effectively 
ceased control is achieved where the company has the power to govern the ﬁnancial and operating policies of an entity  
so as to obtain beneﬁts from its activities
income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated income 
statement from the effective date of acquisition and up to the effective date of disposal as appropriate
when necessary adjustments are made to the ﬁnancial statements of subsidiaries to bring their accounting policies into line with 
those used by other members of the group
all intragroup balances transactions and any unrealised proﬁts or losses arising from intragroup transactions are eliminated  
on consolidation
changes to the group’s ownership interests that do not result in a loss of control over the subsidiaries are accounted for as 
equity transactions the carrying amount of the group’s interests and noncontrolling interests are adjusted to reﬂect the change 
in their relative interests in the subsidiaries any difference between the amount by which the noncontrolling interest is adjusted 
and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the parent
when the group loses control of a subsidiary the proﬁt or loss on the disposal is calculated as the difference between 1 the 
aggregated fair value of the consideration received and the fair value of any retained interest and 2 the previous carrying amount 
of the assets including goodwill and liabilities of the subsidiary and noncontrolling interests
for nonwholly owned subsidiaries noncontrolling interests are initially measured at the noncontrolling interest’s proportion 
of the fair values of net assets recognised at acquisition thereafter a share of the proﬁt or loss for the ﬁnancial year and other 
movements in the net assets or liabilities of the subsidiary is attributed to the noncontrolling interests as shown in the income 
statement and balance sheet
business combinations
ifrs 3 business combinations applies to a transaction or other event that meets the deﬁnition of a business combination when 
acquiring new entities or assets the group applies judgement to assess whether the assets acquired and liabilities assumed 
constitute an integrated set of activities whether the integrated set is capable of being conducted and managed as a business 
by a market participant and thus whether the transaction constitutes a business combination using the guidance provided in 
the standard acquisitions of businesses are accounted for using the acquisition method the consideration for each acquisition 
is measured at the aggregate of the fair values at the date of exchange of assets given liabilities incurred or assumed and 
equity instruments issued by the group in exchange for control of the acquiree acquisitionrelated costs are recognised in the 
consolidated income statement as incurred transaction costs incurred in connection with the business combination are 
expensed provisional fair values are ﬁnalised within 12 months of the acquisition date
where applicable the consideration for the acquisition may include an asset or liability resulting from a contingent consideration 
arrangement contingent consideration is measured at its acquisitiondate fair value and included as part of the consideration 
transferred in a business combination subsequent changes in such fair values are adjusted against the cost of acquisition 
retrospectively with the corresponding adjustment against goodwill where they qualify as measurement period adjustments 
measurement period adjustments are adjustments that arise from additional information obtained during the measurement 
period about facts and circumstances that existed at the acquisition date the measurement period may not exceed one year 
from the effective date of the acquisition the subsequent accounting for contingent consideration that does not qualify for as  
a measurement period adjustment is based on how the contingent consideration is classiﬁed contingent consideration that  
is classiﬁed as equity is not subsequently remeasured contingent consideration that is classiﬁed as an asset or liability is 
remeasured at subsequent reporting dates in accordance with ias 37 provisions contingent liabilities and contingent assets  
or ias 39 financial instruments recognition and measurement with the corresponding amount being recognised in proﬁt or loss
the identiﬁable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date except that
 deferred tax assets or liabilities and liabilities or assets related to employee beneﬁt arrangements are recognised and 
measured in accordance with ias 12 income taxes and ias 19 employee beneﬁts respectively
financial statements
annual report 2012 polymetal international plc 119 118 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
 liabilities or equity instruments related to sharebased payment arrangements of the acquiree or sharebased payment 
arrangements of the group entered into to replace sharebased payment arrangements of the acquiree are measured in 
accordance with ifrs 2 sharebased payment at the acquisition date and
 assets or disposal groups that are classiﬁed as held for sale in accordance with ifrs 5 noncurrent assets held for sale  
and discontinued operations are measured in accordance with that standard
where a business combination is achieved in stages the group’s previously held interests in the acquired entity are remeasured 
to fair value at the acquisition date ie the date the group attains control and the resulting gain or loss if any is recognised  
in the consolidated income statement amounts arising from interests in the acquiree prior to the acquisition date that have 
previously been recognised in equity are reclassiﬁed to proﬁt or loss where such treatment would be appropriate if that interest 
was disposed of
goodwill and goodwill impairment
goodwill arising in a business combination is recognised as an asset at the date that control is acquired the acquisition date 
goodwill is measured as the excess of the sum of the consideration transferred the amount of any noncontrolling interests  
in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree if any over the net of the 
acquisitiondate amounts of the identiﬁable assets acquired and the liabilities assumed
if the group’s interest in the fair value of the acquiree’s identiﬁable net assets exceeds the sum of the consideration transferred 
the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer’s previously held equity interest  
in the acquiree if any the excess is recognised immediately in the consolidated income statement as a bargain purchase gain
goodwill is not amortised but is reviewed for impairment at least annually for the purpose of impairment testing goodwill  
is allocated to each of the group’s cashgenerating units expected to beneﬁt from the synergies of the combination cash
generating units to which goodwill has been allocated are tested for impairment annually or more frequently when there is an 
indication that the unit may be impaired if the recoverable amount of the cashgenerating unit is less than its carrying amount 
the impairment loss is allocated ﬁrst to reduce the carrying amount of any goodwill allocated to the unit and then to the other 
assets of the unit prorata on the basis of the carrying amount of each asset in the unit an impairment loss recognised for 
goodwill is not reversed in a subsequent period
on disposal of a subsidiary the attributable goodwill is included in the determination of the proﬁt or loss on disposal
acquisition of mining licences
the acquisition of mining licences is often effected through a nonoperating corporate entity as these entities do not represent  
a business it is considered that the transactions do not meet the deﬁnition of a business combination and accordingly the 
transaction is accounted for as the acquisition of an asset the net assets acquired are accounted for at cost
investments in associates
an associate is an entity over which the group has signiﬁcant inﬂuence and that is neither a subsidiary nor an interest in a joint 
venture signiﬁcant inﬂuence constitutes the power to participate in the ﬁnancial and operating policy decisions of the investee 
but does not extend to a control or joint control over the enactment of those policies the results and assets and liabilities of 
associates are incorporated in the consolidated ﬁnancial statements using the equity method of accounting
interests in joint ventures
a joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject 
to joint control ie when the strategic ﬁnancial and operating policy decisions relating to the activities of the joint venture require 
the unanimous consent of the parties sharing control joint venture arrangements that involve the establishment of a separate 
entity in which each venturer has an interest are referred to as jointly controlled entities the group reports its interests in jointly 
controlled entities using the equity method of accounting
equity method of accounting
under the equity method an investment in an associate or jointly controlled entity investee is initially recognised in the 
consolidated balance sheet at cost and adjusted thereafter to recognise the group’s share of the proﬁt or loss and other 
comprehensive income of the investee when the group’s share of the losses of an associate exceeds the group’s interest  
in that entity the group ceases to recognise its share of further losses additional losses are recognised only to the extent  
that the group has incurred legal or constructive obligations or made payments on behalf of the investee
any excess of the cost of acquisition over the group’s share of the net fair value of the identiﬁable assets liabilities and 
contingent liabilities of an investee at the date of acquisition is recognised as goodwill which is included within the carrying 
amount of the investment any excess of the group’s share of the net fair value of the identiﬁable assets liabilities and  
contingent liabilities over the cost of acquisition after reassessment is recognised immediately in proﬁt or loss
the requirements of ias 39 are applied to determine whether it is necessary to recognise any impairment loss with respect  
to the group’s investments where an indicator of impairment exists or the carrying value of the asset contains goodwill with  
an indeﬁnite useful life the entire carrying amount of the investment including goodwill is tested for impairment in accordance 
with ias 36 impairment of assets ias 36 as a single cash generating unit through the comparison of its recoverable amount 
the higher of value in use and fair value less costs to sell with its carrying amount any impairment loss recognised forms part  
of the carrying amount of the investment any reversal of that impairment loss is recognised in accordance with ias 36
when a group entity transacts with its investees proﬁts and losses resulting from the transactions with the investee are recognised 
in the group’s consolidated ﬁnancial statements only to the extent of interests in the associate that are not related to the group
functional and presentation currency
the functional currency for each entity in the group is determined as the currency of the primary economic environment in which 
it operates for all russian entities the functional currency is the russian rouble rub the investment holding companies 
including polymetal international plc also have a rouble functional currency as they are in substance an extension of the russian 
group and have signiﬁcant roubledenominated intercompany loans in most cases the functional currency of the group’s entity 
located in kazakhstan and operating with signiﬁcant degree of autonomy is the kazakh tenge kzt
the group has chosen to present its consolidated ﬁnancial statements in us dollars us as management believes it is a more 
convenient presentation currency for international users of the consolidated ﬁnancial statements of the group as it is a common 
presentation currency in the mining industry the translation of the ﬁnancial statements of the group entities from their functional 
currencies to the presentation currency is performed as follows
 all assets and liabilities are translated at closing exchange rates at each reporting period end date
 all income and expenses are translated at the average exchange rates for the periods presented except for signiﬁcant 
transactions that are translated at rates on the date of such transactions
 resulting exchange differences are included in equity and presented as movements relating to the effect of translation to the 
group’s presentation currency within the translation reserve and
 in the consolidated statement of cash ﬂows cash balances at the beginning and end of each reporting period presented are 
translated using exchange rates prevalent at those respective dates all cash ﬂows in the period are translated at the average 
exchange rates for the periods presented except for signiﬁcant transactions that are translated at rates on the date of transaction
on the disposal of a foreign operation ie a disposal of the group’s entire interest in a foreign operation or a disposal involving 
loss of control over a subsidiary that includes a foreign operation a disposal involving loss of joint control over a jointly controlled 
entity that includes a foreign operation or a disposal involving loss of signiﬁcant inﬂuence over an associate that includes a 
foreign operation all of the exchange differences accumulated in equity in respect of that operation attributable to the owners  
of the company are reclassiﬁed to proﬁt or loss
in the case of a partial disposal that does not result in the group losing control over a subsidiary that includes a foreign 
operation the proportionate share of accumulated exchange differences are reattributed to noncontrolling interests and are not 
recognised in the consolidated income statement for all other partial disposals ie reductions in the group’s ownership interest 
in associates or jointly controlled entities that do not result in the group losing signiﬁcant inﬂuence or joint control the 
proportionate share of the accumulated exchange differences is reclassiﬁed to the consolidated income statement
goodwill and fair value adjustments on identiﬁable assets and liabilities acquired arising on the acquisition of a foreign operation 
are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each 
reporting period exchange differences arising are recognised in equity
exchange rates used in the preparation of the consolidated ﬁnancial statements were as follows
31 december 
2012
31 december 
2011
russian roubleus dollar
year end 3037 3220
average for the year 3009 2939
kazakh tengeus dollar
year end 15074 14840
average for the year 14911 14660
the russian rouble and kazakh tenge are not freely convertible currencies outside the russian federation and kazakhstan 
and accordingly any translation of russian rouble and kazakh tenge denominated assets and liabilities into us dollar for the 
purpose of the presentation of consolidated ﬁnancial statements does not imply that the group could or will in the future realise 
or settle in us dollars the translated values of these assets and liabilities
financial statements
annual report 2012 polymetal international plc 121 120 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
foreign currency transactions
transactions in currencies other than the entity’s functional currencies foreign currencies are recorded at the exchange rates 
prevailing on the dates of the transactions all monetary assets and liabilities denominated in foreign currencies are translated at 
the exchange rates prevailing at the reporting date nonmonetary items carried at historical cost are translated at the exchange 
rate prevailing on the date of transaction nonmonetary items carried at fair value are translated at the exchange rate prevailing 
on the date on which the most recent fair value was determined exchange differences arising from changes in exchange rates 
are recognised in the consolidated income statement
property plant and equipment
mining assets
mining assets and leases include the cost of acquiring and developing mining assets and mineral rights mining assets are 
depreciated to their residual values using the unitofproduction method based on proven and probable ore reserves under the 
russian resource reporting code gkz which is the basis on which the group’s mine plans are prepared changes in proven 
and probable reserves are dealt with prospectively depreciation is charged on new mining ventures from the date that the 
mining asset is capable of commercial production in respect of those mining assets whose useful lives are expected to be 
less than the life of the mine depreciation over the period of the asset’s useful life is applied the difference in the depreciation 
charge which would have been applied had the group based the depreciation expense on jorc reserves is considered to be 
immaterial when there is little likelihood of a mineral right being exploited or the value of the exploitable mineral right has 
diminished below cost an impairment loss is recognised in the consolidated income statement
capital constructioninprogress assets are measured at cost less any recognised impairment depreciation commences 
when the assets are ready for their intended use mineral exploration and evaluation costs including geophysical topographical 
geological and similar types of costs are expensed as incurred when it has been determined that a mineral property can  
be economically developed as a result of established proven and probable reserves the costs incurred in exploration and 
development of such property including costs to further delineate the ore body are capitalised
nonmining assets are depreciated to their residual values on a straightline basis over their estimated useful lives when parts 
of an item of property plant and equipment are considered to have different useful lives they are accounted for and depreciated 
separately depreciation methods residual values and estimated useful lives are reviewed at least annually
estimated useful lives are as set out below
machinery and equipment up to 20 years
transportation and other assets up to 10 years
assets held under ﬁnance leases are depreciated over the shorter of the lease term and the estimated useful lives of the assets
gains or losses on disposal of property plant and equipment are determined by comparing the proceeds from disposal with the 
asset’s carrying amount at the date the gain or loss arising is recognised in the consolidated income statement
stripping costs
when it has been determined that a mining asset can be economically developed as a result of established proven and probable 
reserves the costs to remove any overburden and other waste materials to initially expose the ore body referred to as stripping 
costs are capitalised as a part of mining assets
postproduction stripping costs are recognised as a component of inventory and included in cost of sales in the same period  
as the revenue from the sales of inventory is recognised
estimated ore reserves
estimated proven and probable ore reserves reﬂect the economically recoverable quantities which can be legally recovered in 
the future from known mineral deposits the group’s reserves are estimated in accordance with the gkz and jorc codes
leases
finance leases
leases under which the group assumes substantially all the risks and rewards of ownership are classiﬁed as ﬁnance leases 
assets subject to ﬁnance leases are capitalised as property plant and equipment at the lower of fair value or present value  
of future minimum lease payments at the date of acquisition with the related lease obligation recognised at the same value 
assets held under ﬁnance leases are depreciated over their estimated economic useful lives or over the term of the lease  
if shorter if there is reasonable certainty that the lessee will obtain ownership by the end of the lease term the period  
of expected use is useful life of the asset
finance lease payments are calculated using the effective interest rate method and allocated between the lease ﬁnance cost 
which is included in ﬁnance cost and the capital repayment which reduces the related lease liability payable to the lessor
operating leases
operating lease payments are recognised as an expense on a straightline basis over the lease term contingent rentals arising 
under operating leases are recognised as an expense in the period in which they are incurred
impairment of property plant and equipment
an impairment review of property plant and equipment is carried out when there is an indication that those assets have suffered 
an impairment loss if any such indication exists the carrying amount of the asset is compared to the estimated recoverable 
amount of the asset in order to determine the extent of the impairment loss if any where it is not possible to estimate the 
recoverable amount of an individual asset the group estimates the recoverable amount of the cashgenerating unit to which the 
asset belongs 
recoverable amount is the higher of fair value less costs to sell and value in use in assessing value in use the estimated future 
cash ﬂows are discounted to their present value using a pretax discount rate that reﬂects current market assessments of the 
time value of money and the risks speciﬁc to the asset for which the estimates of future cash ﬂows have not been adjusted if the 
recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount the carrying amount  
of the asset or cash generating unit is reduced to its recoverable amount an impairment loss is recognised as an expense 
immediately in the consolidated income statement
where an impairment loss subsequently reverses the carrying amount of the asset or cashgenerating unit is increased  
to the revised estimate of its recoverable amount but only to the extent that the increased carrying amount does not exceed  
the original carrying amount that would have been determined had no impairment loss been recognised in prior periods
a reversal of an impairment loss is recognised in the consolidated income statement immediately
inventories
metal inventories
inventories including reﬁned metals metals in concentrate and in process doré and ore stock piles are stated at the lower of 
production cost or net realisable value production cost is determined as the sum of the applicable expenditures and expenses 
incurred directly or indirectly in bringing inventories to their existing condition and location reﬁned metals are valued at the 
average total cost of production per saleable unit of metal work inprocess metal concentrate and doré are valued at the 
average total production costs at each asset’s relevant stage of production ore stock piles are valued at the average cost of 
mining that ore where ore stock piles are not expected to be processed within 12 months those inventories are classiﬁed as 
noncurrent
net realisable value represents the estimated selling price for that product based on prevailing spot metal prices less estimated 
costs to complete production and selling costs
consumables and spare parts
consumables and spare parts are stated at the lower of cost or net realisable value cost is determined on the weighted average 
moving cost the portion of consumables and spare parts not reasonably expected to be used within one year is classiﬁed  
as a longterm asset in the group’s consolidated balance sheet net realisable value represents the estimated selling price less 
all estimated costs of completion and costs to be incurred in marketing selling and distribution
financial instruments
financial assets and ﬁnancial liabilities are recognised when a group entity becomes a party to the contractual provisions  
of the instrument
financial assets and ﬁnancial liabilities are initially measured at fair value transaction costs that are directly attributable to the 
acquisition or issue of ﬁnancial assets and ﬁnancial liabilities other than ﬁnancial assets and ﬁnancial liabilities at fair value 
through proﬁt or loss are added to or deducted from the fair value of the ﬁnancial assets or ﬁnancial liabilities as appropriate 
on initial recognition transaction costs directly attributable to the acquisition of ﬁnancial assets or ﬁnancial liabilities at fair value 
through proﬁt or loss are recognised immediately in the consolidated income statement
financial instruments designated as fair value through proﬁt and loss fvtpl
a ﬁnancial instrument other than a ﬁnancial instrument held for trading may be designated as at fvtpl upon initial recognition if
 such designation eliminates or signiﬁcantly reduces a measurement or recognition inconsistency that would otherwise  
arise or
 the ﬁnancial instrument forms part of a group of ﬁnancial assets or ﬁnancial liabilities or both which is managed and its 
performance is evaluated on a fair value basis in accordance with the group’s documented risk management or investment 
strategy and information about the grouping is provided internally on that basis or
 it forms part of a contract containing one or more embedded derivatives and ias 39 financial instruments recognition and 
measurement permits the entire combined contract asset or liability to be designated as at fvtpl
financial statements
annual report 2012 polymetal international plc 123 122 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
financial instruments at fvtpl are stated at fair value with any gains or losses arising on remeasurement recognised in proﬁt  
or loss fair value is determined in the manner described in note 29
effective interest rate method
the effective interest rate method is a method of calculating the amortised cost of a ﬁnancial instrument and of allocating interest 
income or expense over the relevant period the effective interest rate is the rate that discounts estimated future cash receipts  
or payments including all fees and points paid or received that form an integral part of the effective interest rate transaction 
costs and other premiums or discounts through the expected life of the ﬁnancial instrument or where appropriate a shorter 
period to the net carrying amount on initial recognition
financial assets
nonderivative ﬁnancial assets are classiﬁed into the following speciﬁed categories fvtpl available for sale afs ﬁnancial 
assets and ‘loans and receivables’ the classiﬁcation depends on the nature and purpose of the ﬁnancial assets and is 
determined at the time of initial recognition no ﬁnancial instruments have been classiﬁed as available for sale
income is recognised on an effective interest basis for ﬁnancial instruments other than those ﬁnancial assets classiﬁed as at fvtpl
loans and receivables
loans and receivables are nonderivative ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an active 
market loans and receivables are measured at amortised cost using the effective interest rate method less any impairment 
interest income is determined by applying the effective interest rate except for shortterm receivables when the recognition of 
interest would be immaterial
afs ﬁnancial assets
investments other than those classiﬁed as held for trading heldtomaturity or loans and receivables are classiﬁed as available  
for sale ﬁnancial assets these assets are subsequently measured at fair value and unrealised gains and losses are recognised  
in equity until the investment is disposed or impaired at which time the cumulative gain or loss previously recognised in equity  
is included in the consolidated income statement
impairment of ﬁnancial assets
financial assets other than those at fvtpl are assessed for indicators of impairment at the end of each reporting period 
financial assets are considered to be impaired when there is objective evidence that as a result of one or more events that 
occurred after the initial recognition of the ﬁnancial asset the estimated future cash ﬂows of the investment have been affected 
for equity investments classiﬁed as afs a signiﬁcant or prolonged decline in the fair value of the security below its cost  
is considered to be objective evidence of impairment
for all other ﬁnancial assets objective evidence of impairment could include
 signiﬁcant ﬁnancial difﬁculty of the issuer or counterparty or
 breach of contract such as a default or delinquency in interest or principal payments or
 it becoming probable that the borrower will enter bankruptcy or ﬁnancial reorganisation or
 the disappearance of an active market for that ﬁnancial asset because of ﬁnancial difﬁculties
for ﬁnancial assets carried at amortised cost the amount of the impairment loss recognised is the difference between the 
asset’s carrying amount and the present value of estimated future cash ﬂows discounted at the ﬁnancial asset’s original effective 
interest rate
the carrying amount of the ﬁnancial asset is reduced by the impairment loss directly for all ﬁnancial assets with the exception  
of trade receivables where the carrying amount is reduced through the use of an allowance account when a trade receivable  
is considered uncollectible it is written off against the allowance account subsequent recoveries of amounts previously written 
off are credited against the allowance account changes in the carrying amount of the allowance account are recognised in the 
consolidated income statement
for ﬁnancial assets measured at amortised cost if in a subsequent period the amount of the impairment loss decreases and 
the decrease can be related objectively to an event occurring after the impairment was recognised the previously recognised 
impairment loss is reversed through the consolidated income statement to the extent that the carrying amount of the investment 
at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not  
been recognised
derecognition of ﬁnancial assets
the group derecognises a ﬁnancial asset only when the contractual rights to the cash ﬂows from the asset expire or when it 
transfers the ﬁnancial asset and substantially all the risks and rewards of ownership of the asset to another entity if the group 
neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset 
the group recognises its retained interest in the asset and an associated liability for amounts it may have to pay if the group 
retains substantially all the risks and rewards of ownership of a transferred ﬁnancial asset the group continues to recognise  
the ﬁnancial asset and also recognises a collateralised borrowing for the proceeds received
financial liabilities
other ﬁnancial liabilities
other ﬁnancial liabilities including borrowings are subsequently measured at amortised cost using the effective interest  
rate method
derecognition of ﬁnancial liabilities
the group derecognises ﬁnancial liabilities when and only when the group’s obligations are discharged cancelled or they 
expire the difference between the carrying amount of the ﬁnancial liability derecognised and the consideration paid and payable 
is recognised in the consolidated income statement
derivative ﬁnancial instruments
the group may enter into a variety of derivative ﬁnancial instruments to manage its exposure to certain risks further details  
of derivative ﬁnancial instruments are disclosed in note 29
derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently 
remeasured to their fair value at the end of each reporting period the resulting gain or loss is recognised in the consolidated 
income statement immediately unless the derivative is designated and effective as a hedging instrument in which event the 
timing of the recognition in the consolidated income statement depends on the nature of the hedge relationship
derivatives embedded in nonderivative host contracts are treated as separate derivatives when their risks and characteristics 
are not closely related to those of the host contracts and the hybrid contracts are not measured at fvtpl
borrowing costs
borrowing costs directly attributable to the acquisition construction or production of qualifying assets which are assets that 
necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets 
until such time as the assets are substantially ready for their intended use or sale
investment income earned on the temporary investment of speciﬁc borrowings pending their expenditure on qualifying assets  
is deducted from the borrowing costs eligible for capitalisation
all other borrowing costs are recognised in the consolidated income statement in the period in which they are incurred
cash and cash equivalents
cash and cash equivalents comprise cash balances cash deposits and highly liquid investments with original maturities  
of three months or fewer which are readily convertible to known amounts of cash and are subject to an insigniﬁcant risk  
of changes in value
provisions
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event it is probable 
that the group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation
the amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the 
reporting date taking into account the risks and uncertainties surrounding the obligation where a provision is measured using 
the cash ﬂows estimated to settle the present obligation its carrying amount is the present value of those cash ﬂows
environmental obligations
an obligation to incur environmental restoration rehabilitation and decommissioning costs arises when disturbance is caused  
by the development or ongoing production of mining assets such costs arising from the decommissioning of plant and other 
site preparation work discounted to their net present value using a riskfree rate applicable to the future cash ﬂows are provided 
for and capitalised at the start of each project as soon as the obligation to incur such costs arises these costs are recognised 
in the consolidated income statement over the life of the operation through the depreciation of the asset in the cost of sales line 
and the unwinding of the discount on the provision in the ﬁnance costs line costs for restoration of subsequent site damage 
which is created on an ongoing basis during production are provided for at their net present values and recognised in the 
consolidated income statement as extraction progresses
changes in the measurement of a liability relating to the decommissioning of plant or other site preparation work that result from 
changes in the estimated timing or amount of the cash ﬂow or a change in the discount rate are added to or deducted from the 
cost of the related asset in the current period if a decrease in the liability exceeds the carrying amount of the asset the excess  
is recognised immediately in the consolidated income statement
financial statements
annual report 2012 polymetal international plc 125 124 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
the provision for closure cost obligations is remeasured at the end of each reporting period for changes in estimates and 
circumstances changes in estimates and circumstances include changes in legal or regulatory requirements increased 
obligations arising from additional mining and exploration activities changes to cost estimates and changes to the risk free 
interest rate
employee beneﬁt obligations
remuneration paid to employees in respect of services rendered during a reporting period is recognised as an expense in that 
reporting period the group pays mandatory contributions to the state social funds including the pension fund of the russian 
federation and kazakhstan which are expensed as incurred
taxation
income tax expense represents the sum of the tax currently payable and deferred tax income taxes are computed  
in accordance with the laws of countries where the group operates
current tax
the tax currently payable is based on taxable proﬁt for the period taxable proﬁt differs from proﬁt as reported in the 
consolidated income statement because of items of income or expense that are taxable or deductible in other periods and items 
that are never taxable or deductible the group’s liability for current tax is calculated using tax rates that have been enacted  
or substantively enacted by the reporting date
deferred tax
deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated 
ﬁnancial statements and the corresponding tax bases used in the computation of taxable proﬁt deferred tax liabilities are 
generally recognised for all taxable temporary differences deferred tax assets are generally recognised for all deductible 
temporary differences to the extent that it is probable that taxable proﬁts will be available against which those deductible 
temporary differences can be utilised such deferred tax assets and liabilities are not recognised if the temporary difference 
arises from goodwill or from the initial recognition other than in a business combination of other assets and liabilities  
in a transaction that affects neither the taxable proﬁt nor the accounting proﬁt
deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and 
associates and interests in joint ventures except where the group is able to control the reversal of the temporary difference and 
it is probable that the temporary difference will not reverse in the foreseeable future deferred tax assets arising from deductible 
temporary differences associated with such investments and interests are only recognised to the extent that it is probable that 
there will be sufﬁcient taxable proﬁts against which to utilise the beneﬁts of the temporary differences and they are expected  
to reverse in the foreseeable future
the carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that  
it is no longer probable that sufﬁcient taxable proﬁts will be available to allow all or part of the asset to be recovered
deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability  
is settled or the asset realised based on tax rates and tax laws that have been enacted or substantively enacted by the end of 
the reporting period the measurement of deferred tax liabilities and assets reﬂects the tax consequences that would follow from 
the manner in which the group expects at the end of the reporting period to recover or settle the carrying amount of its assets 
and liabilities
deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current 
tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its 
current tax assets and liabilities on a net basis
current and deferred tax
current and deferred tax is recognised in the consolidated income statement except when they relate to items that are 
recognised in the consolidated statement of comprehensive income or directly in equity in which case the current and deferred 
tax also recognised in consolidated statement of comprehensive income or directly in equity respectively where current tax or 
deferred tax arises from the initial accounting for a business combination the tax effect is included in the accounting for the 
business combination
revenue recognition
revenue is derived principally from the sale of gold and silver bullion and copper gold and silver concentrate and is measured  
at the fair value of consideration received or receivable after deducting discounts
revenue from the sale of gold and silver bullion and sale of copper gold and silver concentrate is recognised when the risks and 
rewards of ownership are transferred to the buyer the group retains neither a continuing degree of involvement nor control over 
the goods sold the amount of revenue can be measured reliably and it is probable that the economic beneﬁts associated with 
the transaction will ﬂow to the group revenue from the sale of gold and silver bullion represents the invoiced value of metal 
shipped to the buyer net of value added tax vat
sale of gold and silver bullion
the group processes doré produced in the russian federation at dukat khakanja voro omolon and amurskalbazino  
into london good delivery bars prior to sale this ﬁnal stage of processing is carried out on a tolltreatment basis at four 
stateowned reﬁneries the group sells gold and silver bullion to banks through longterm agreements the sales price as 
determined in the agreement may be variable based upon the london bullion market association lbma spot price or ﬁxed 
but the group’s policy is not to enter into ﬁxed price contracts for domestic sales title passes from the group to the purchaser 
at the reﬁnery gate with revenue recognised at that point for export sales once the gold andor silver bars have been approved 
for export by russian customs they are then transported to the vault of the purchaser which is typically located in london  
title passes and revenue is recognised at the point when the gold andor silver bars are received by the purchaser
sales of copper gold and silver concentrate
the group sells copper gold and silver concentrate under pricing arrangements where ﬁnal prices are determined by quoted 
market prices in a period subsequent to the date of sale concentrate sales are initially recorded based on forward prices for 
the expected date of ﬁnal settlement revenue is recorded at the time of shipment which is also when risks and rewards pass  
to the buyer revenue is calculated based on the copper gold and silver content in the concentrate and using the forward 
london metal bulletin lmb or london metal exchange lme price to the estimated ﬁnal pricing date adjusted for the speciﬁc 
terms of the relevant agreement until ﬁnal settlement occurs adjustments to revenue are made to take into account the changes 
in metal quantities upon receipt of new information and assay revenue is presented net of reﬁning and treatment charges which 
are subtracted in calculating the amount to be invoiced
the group’s sales of copper gold and silver concentrate are based on a provisional price and as such contain an embedded 
derivative that is required to be separated from the host contract for accounting purposes the host contract is the receivable 
from the sale of the concentrate at the forward exchange price at the time of sale the embedded derivative which does not 
qualify for hedge accounting is measured at fvtpl with changes in its fair value recognised within revenue in the consolidated 
income statement for each period prior to the ﬁnal settlement
sharebased compensation
the group applies ifrs 2 sharebased payments to its accounting for sharebased compensation ifrs 2 requires companies 
to recognise compensation costs for sharebased payments to employees based on the grantdate fair value of the award
the fair value of sharebased payments was calculated by the group at the grant date using the twostage montecarlo 
simulation model the expense is recognised on a straightline basis over the vesting period of the awards
the fair value of the awards granted is recognised as a general administrative and selling expense over the vesting period with 
a corresponding increase in the sharebased compensation reserve upon the exercise of the awards the proceeds received 
net of any directly attributable transaction costs are credited to the stated capital account and the amounts recognised within 
the sharebased compensation reserve transferred to retained earnings
earnings per share
earnings per share calculations are based on the weighted average number of common shares outstanding during the period 
diluted earnings per share are calculated using the treasury stock method whereby the proceeds from the potential exercise 
of dilutive stock options with exercise prices that are below the average market price of the underlying shares are assumed to 
be used in purchasing the company’s common shares at their average market price for the period
financial statements
annual report 2012 polymetal international plc 127 126 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
3 critical accounting judgements and key sources of estimation uncertainty
the following are the critical judgements apart from those involving estimations see below that the management has made  
in the process of applying the group’s accounting policies and that have the most signiﬁcant effect on the amounts recognised 
in consolidated ﬁnancial statements
production start date
the group assesses the stage of each mine or plant construction project to determine when an asset moves into the 
commercial production stage the criteria used to assess the start date are determined by the unique nature of each 
construction project and include factors such as the complexity of a plant and its location
the group considers various relevant criteria to assess when the mine is substantially complete and ready for its intended  
use and moves into the production stage criteria considered but are not limited to the following
 the level of capital expenditure incurred compared to the construction cost estimates
 the completion of a sufﬁcient level of testing on the mine plant and equipment
 the ability to produce gold silver or copper in saleable form within speciﬁcations and
 the ability to sustain ongoing commercial levels of production
when a construction project moves into the commercial production stage and depreciation commences the capitalisation  
of certain mine construction costs and interest ceases and costs are either regarded as inventory or expensed except for 
capitalisable costs related to mining asset additions or improvements underground mine development or ore reserve 
development
the omolon merrillcrowe plant achieved commercial production in april 2012 and the albazino mine achieved commercial 
production in 2011
the amursk pox plant commenced commercial production in november 2012
acquisitions
ifrs 3 business combinations applies to a transaction or other event that meets the deﬁnition of a business combination  
when acquiring new entities or assets the group applies judgement to assess whether the assets acquired and liabilities 
assumed constitute an integrated set of activities and thus whether the transaction constitutes a business combination  
using the guidance provided in the standard in making this determination management evaluates the inputs processes  
and outputs of the asset or entity acquired 
as a result of this evaluation process management has determined that its 2012 acquisitions of semchenskoye and svetlobor 
did not meet the deﬁnition of a business combination and as such the group has accounted for these transactions as asset 
acquisitions see note 4 
key sources of estimation uncertainty
preparation of the consolidated ﬁnancial statements in accordance with ifrs requires the group’s management to make 
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and 
liabilities at the date of the consolidated ﬁnancial statements and the reported amounts of revenues and expenses during the 
reporting period the determination of estimates requires judgements which are based on historical experience current and 
expected economic conditions and all other available information actual results could differ from those estimates
the following are the key assumptions concerning the future and other key sources of estimation uncertainty at the end of the 
reporting period that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities 
within the next ﬁnancial period
the most signiﬁcant areas requiring the use of management estimates and assumptions relate to
 fair value of net assets acquired and liabilities assumed in business combinations
 ore reserve estimates
 depreciation
 impairment of goodwill mining assets and other property plant and equipment
 inventory obsolescence and writedowns
 sharebased compensation
 environmental obligations
 contingencies and
 income taxes
fair value of net assets acquired and liabilities assumed in business combinations
in accordance with the group’s policy the group allocates the cost of the acquired entity to the assets acquired and liabilities 
assumed based on their fair values as estimated on the date of acquisition any difference between the cost of the acquired 
entity and the fair value of the assets acquired and liabilities assumed is recorded as goodwill the group exercises signiﬁcant 
judgement in the process of identifying tangible and intangible assets and liabilities valuing these assets and liabilities and 
estimating their remaining useful lives the valuation of these assets and liabilities is based on assumptions and criteria that  
in some cases include management’s estimates of discounted future cash ﬂows 
if actual results are not consistent with estimates and assumptions considered the group may have to adjust its estimates of the 
fair values of assets and liabilities recognised and the goodwill balance during the measurement period such a remeasurement 
could have an impact on the amounts reported in the consolidated income statement in current and future periods
ore reserve estimates
an ore reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the group’s 
properties ore reserve estimates are used by the group in the calculation of depletion of mining assets using the unitsof
production method impairment charges and in forecasting the timing of the payment of decommissioning and land restoration 
costs also for the purpose of impairment review and the assessment of the timing of the payment of decommissioning and land 
restoration costs management may take into account mineral resources in addition to ore reserves where there is a high degree 
of conﬁdence that such resources will be extracted
in order to calculate ore reserves estimates and assumptions are required about geological technical and economic factors 
including quantities grades production techniques recovery rates production costs transport costs commodity demand 
commodity prices discount rates and exchange rates estimating the quantity andor grade of ore reserves requires the size 
shape and depth of ore bodies to be determined by analysing geological data such as the logging and assaying of drill samples 
this process may require complex and difﬁcult geological judgements and calculations to interpret the data
ore reserve estimates may change from period to period as additional geological data becomes available during the course  
of operations or if there are changes in any of the aforementioned assumptions such changes in estimated reserves may affect 
the group’s ﬁnancial results and ﬁnancial position in a number of ways including the following
 asset carrying values due to changes in estimated future cash ﬂows
 depletion charged in the consolidated income statement where such charges are determined by using the unitsofproduction 
method
 provisions for decommissioning and land restoration costs where changes in estimated reserves affect expectations about  
the timing of the payment of such costs and
 carrying value of deferred tax assets and liabilities where changes in estimated reserves affect the carrying value of the 
relevant assets and liabilities
depreciation
mining assets are depreciated using the unitsofproduction method except where the useful lives of the assets are shorter than 
the life of mine the unitsofproduction depreciation calculations are based on proved and probable reserves under the russian 
resource reporting code gkz which is the basis on which the group’s mine plans are prepared as the useful lives of these 
assets are considered to be limited to the life of the relevant mine for other property plant and equipment the straightline 
method is applied over the estimated useful life of the asset which does not exceed the estimated mine life 
the calculation of the unitsofproduction rate of depreciation could be impacted to the extent that actual production in the future 
is different from current forecast production based on proved and probable ore reserves this would generally arise when there 
are signiﬁcant changes in any of the factors or assumptions used in estimating ore reserves the group’s unitsofproduction 
depreciation rates are based on the gkz reserves ﬁgures which are different to the reserves calculated under the jorc 
reporting code and included into the group’s external reporting
impairment of goodwill mining assets and other property plant and equipment
the group considers both external and internal sources of information in assessing whether there are any indications that 
goodwill mining assets or other property plant and equipment owned by the group are impaired external sources of 
information the group considers include changes in the market and economic and legal environment in which the group 
operates that are not within its control and that affect the recoverable amount of goodwill mining assets or other property 
plant and equipment
financial statements
annual report 2012 polymetal international plc 129 128 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
3 critical accounting judgements and key sources of estimation uncertainty continued
internal sources of information the group considers include the manner in which mining properties plant and equipment are 
being used or expected to be used and indications of economic performance of the assets in determining the recoverable 
amounts of the group’s mining assets and other property plant and equipment the group’s management determines the fair 
value less costs to sell by estimating the discounted future aftertax cash ﬂows expected to be derived from the group’s mining 
properties costs to sell the mining properties and the appropriate posttax discount rate reductions in metal price forecasts 
increases in estimated future costs of production increases in estimated future capital costs reductions in the amount  
of recoverable reserves and resources andor adverse current economics can result in a writedown of the carrying amounts  
of the group’s goodwill mining assets or other property plant and equipment
in making the assessment for impairment assets that do not generate independent cash inﬂows are allocated to an appropriate 
cashgenerating unit management necessarily applies its judgement in allocating assets that do not generate independent cash 
inﬂows to appropriate cashgenerating units and also in estimating the timing and value of underlying cash ﬂows within the 
valueinuse calculation subsequent changes to the cashgenerating unit allocation or to the timing of cash ﬂows could impact 
the carrying value of the respective assets
stock piles and work inprocess
in determining mine operating costs recognised in the consolidated income statement the group’s management makes 
estimates of quantities of ore stacked on leach pads and in process and the recoverable gold and silver in this material to 
determine the average costs of ﬁnished goods sold during the period changes in these estimates can result in a change in mine 
operating costs of future periods and carrying amounts of inventories at 31 december 2012 the carrying value of the ore stock 
piles was us336 million and work inprocess was us66 million
sharebased compensation
in november 2010 the group issued equitysettled share appreciation rights to certain employees equitysettled share 
appreciation rights are measured at fair value excluding the effect of nonmarket based vesting conditions at the date of grant 
the fair value determined at the grant date of the awards is expensed as services are rendered over the vesting period based  
on the group’s estimate of the rights that will eventually vest
the fair value of sharebased compensation is measured using the montecarlo twostage simulation model the expected 
life used in the model has been adjusted based on management’s best estimate for the effects of nontransferability exercise 
restrictions and behavioural considerations the awards include an option exercisable at the discretion of the participant to 
defer the measurement period by one year for further details see note 32
the most signiﬁcant assumptions used in estimation of the cost of equitysettled stock appreciation rights are the expected 
volatility of the company’s share price over the life of the award the riskfree interest rate used the level of expected forfeitures 
and the expectation at the grant date of the dividends to be paid over the life of the awards 
expected volatility is based on the historical volatility of return on the company’s gdrs
the riskfree rates used in the valuation model are based on us treasury zerocoupon issues with a remaining term equal  
to the expected life assumed at the grant date
expected forfeitures are estimated using historical trends of executive director and employee turnover
at the grant date the group had not historically declared dividends as such the expected annual dividend per share was 
therefore nil subsequent changes in the group’s dividend policy will be taken into account when valuing options granted  
in the future
environmental obligations
the group’s mining and exploration activities are subject to various laws and regulations governing the protection of the 
environment the group’s provision for future decommissioning and land restoration cost represents management’s best 
estimate of the present value of the future cash outﬂows required to settle the liability which reﬂects estimates of future costs 
inﬂation movements in foreign exchange rates and assumptions of risks associated with the future cash outﬂows and the 
applicable interest rate for discounting the future cash outﬂows actual costs incurred in future periods could differ materially 
from the estimates additionally future changes to environmental laws and regulations life of mine estimates and discount 
rates could affect the carrying amount of this provision
contingencies
by their nature contingencies will only be resolved when one or more future events occur or fail to occur the assessment  
of such contingencies inherently involves the exercise of signiﬁcant judgements and estimates of the outcome of future events
income taxes and mining taxes
the group is subject to income tax and mining taxes in the russian federation and kazakhstan mining taxes do not meet 
the deﬁnition of a tax under ias 12 income taxes signiﬁcant judgement is required in determining the provision for these taxes 
due to the complexity of legislation there are many transactions and calculations for which the ultimate tax determination is 
uncertain the group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be 
due where the ﬁnal tax outcome of these matters is different from the amounts that were initially recorded such differences will 
impact the income tax and deferred tax provisions in the period in which such determination is made
deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufﬁcient 
taxable proﬁt will be available to allow all or part of the deferred tax asset to be utilised the estimation of that probability includes 
judgements based on the expected performance various factors are considered in order to assess the probability of the future 
utilisation of deferred tax assets including past operating results operational plan expiration of tax losses carried forward and 
tax planning strategies if actual results differ from these estimates or if these estimates must be adjusted in future periods the 
ﬁnancial position results of operations and cash ﬂows may be negatively affected
4 acquisitions and disposals
a asset acquisitions
veduga 
on 7 february 2012 the group completed the acquisition from anglogold ashanti holdings plc anglogold of anglogold’s 
50 interest in various companies held in joint venture with polymetal comprising the anglogold ashanti – polymetal strategic 
alliance for us20 million it subsequently entered into a series of transactions with new investors unrelated parties retaining 
a 4265 economic interest in the principal asset – the veduga licence see note 20 for further information
semchenskoye zoloto
on 22 august 2012 the group acquired 100 interest in ‘semchenskoye zoloto llc’ semchenskoye zoloto from suntsov va 
25 interest and polister limited 75 interest both unrelated parties semchenskoye zoloto holds the exploration licence for 
semchenskoye ﬁeld in karelia the group paid cash consideration of us08 million in addition a contingent consideration  
of us05 million is payable by the group in case the exploration of the licence area proves to be successful and the mining 
licence for the new gold deposit is received before 25 december 2014 another us12 million is payable depending on the level  
of proved and probable ore reserves of the new deposit 
after evaluation of the possible outcome of the contingency the group estimated fair value of the contingent consideration  
to be us01 million
semchenskoye zoloto does not meet the deﬁnition of a business pursuant to ifrs 3 2008 thus it was accounted for as 
an acquisition of a group of assets the group purchased mineral rights of us08 million and other current liabilities of 
us0024 million
svetlobor
on 17 december 2012 the group acquired 2499 interest in jsc nevyansk group ng a russian legal entity whose wholly
owned subsidiary holds a mining and exploration licence for the svetlobor area the group issued consideration in the form  
of 130053 new ordinary shares in the company simultaneously cjsc vtb capital vtb purchased a 7501 stake in ng  
in exchange for 390369 new polymetal ordinary shares which were subscribed for by a subsidiary of vtb for a total cash 
consideration of us69 million 
 
the group also entered into legally binding agreement to acquire the 7501 stake in ng from vtb as soon as this transaction 
is approved by the government commission on monitoring of foreign investments for cash consideration of us69 million 
plus any interest accrued on this amount at a rate of 725 per annum
 
the group determined 17 december 2012 to be the date when it obtained control over ng and consolidated the acquiree from 
that date the cash received from vtb has been accounted for as a loan and included within borrowings note 25 ng does not 
meet the deﬁnition of a business pursuant to ifrs 3 2008 and this transaction has been treated as an acquisition of assets  
the allocation of the consideration paid to the assets acquired was as follows
 us’000
net assets acquired 
mineral rights 9449 
other assets 299 
other liabilities 11
net assets acquired 9737 
consideration 
fair value of shares issued 9737 
financial statements
annual report 2012 polymetal international plc 131 130 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
4 acquisitions and disposals continued
in the prior year the following transactions took place
kutyn llc
on 29 april 2011 the group acquired a 100 interest in kutynskaya ggk llc kutyn from olsen business limited an 
unrelated party in exchange for 3500000 jsc polymetal gdrs the gdr share price on the acquisition date was us1914 
the group acquired kutyn as it holds the mining licence for kutyn gold deposit located in the khabarovsk region
kutyn does not meet the deﬁnition of a business pursuant to ifrs 3 2008 thus this acquisition was accounted for as an 
acquisition of a group of assets the allocation of the cost of acquisition to the group of assets acquired was as follows
us’000
mineral rights 67 719
property plant and equipment 618
other liabilities 1347
net assets acquired 66990
consideration
fair value of gdrs transferred 66990
industriya llc
on 27 may 2011 the group acquired a 100 interest in industriya llc industriya from kuzmichev vv an unrelated party  
the group acquired industriya as it holds the hardrock gold exploration and mining licence for the elmus property the group 
paid cash consideration of us1787 million industriya does not meet the deﬁnition of a business pursuant to ifrs 3 2008 thus 
it was accounted for as an acquisition of a group of assets the group purchased mineral rights of us182 million and other 
current liabilities of us0042 million
ofﬁce llc
on 13 may 2011 the group acquired a 100 interest in ofﬁce llc ofﬁce from ictkolyma llc an unrelated party for 
us103 million of which us62 million was netted against advance provided to ictkolyma llc in 2010 the group acquired 
ofﬁce as it holds three storeys of an ofﬁce premises in magadan the cost of the ofﬁce premises was us976 million with the 
residual amount of us056 million representing other assets and liabilities acquired
b disposal of subsidiary
in december 2012 the group disposed of following minor subsidiaries ural’skoye grp llc severnoural’skoye grp llc and 
jsc aurum for further information on the partial disposal of amikan holding limited which owns the veduga gold deposits 
see note 20
ural’skoye 
us’000
severno
ural’skoye 
us’000
aurum 
us’000
amikan 
us’000 
total 
us’000
net assets disposed of
property plant and equipment 295 2749 127 67842 71013
other noncurrent assets 1388 – 2317 3577 7282
current assets 1848 1688 – 230 3766
current liabilities 549 17 1278 – 1844
noncurrent liabilities – 3572 – 17995 21567
2982 848 1166 53654 58650
consideration receivable 1593 1475 3 28000 31071
fair value of interest in associate undertaking acquired – – – 20201 20201
intercompany debt assigned to acquirer ––– 3331 3331
gainloss on disposal 1389 627 1163 8784 10709
in the prior year the group disposed of the following subsidiary
cjsc northeastern coal company
on 29 june 2011 the group sold 100 in cjsc northeastern coal company for us53 million to an unrelated party cjsc 
northeastern coal company did not perform any operations during 2011 the gain on disposal was calculated as follows
us’000
consideration received 5300
carrying value of property plant and equipment disposed of 5725
carrying value of other liabilities disposed of 5356
gain on disposal 4931
5 segment information
the group has seven reportable segments
 voro cjsc gold of northern urals
 khakanja llc okhotskaya mining and exploration company
 dukat cjsc magadan silver
 omolon omolon gold mining company llc
 varvara jsc varvarinskoye
 amurskalbazino albazino resources ltd amur hydrometallurgical plant llc and
 mayskoye mayskoye gold mining company llc
reportable segments are determined based on the group’s internal management reports and are separated based on the 
group’s geographical proﬁle minor companies and activities management exploration purchasing and other companies which 
do not meet the reportable segment criteria are disclosed within corporate and other each segment is engaged in gold silver  
or copper mining and related activities including exploration extraction processing and reclamation the group’s segments are 
all based in the russian federation other than varvara which is based in kazakhstan
the measure which management and the chief operating decision maker the codm use to evaluate the performance of the 
group is segment adjusted ebitda which is deﬁned as proﬁt for the period adjusted for depreciation and amortization write
downs of inventory to net realisable value sharebased compensation expenses rehabilitation expenses gains or losses arising 
on disposal of subsidiaries foreign exchange gains or losses changes in the fair value of derivatives changes in the fair value  
of contingent consideration ﬁnance income ﬁnance costs and income tax expenses the accounting policies of the reportable 
segments are consistent with those of the group’s accounting policies under ifrs as described in note 2
revenue shown as corporate and other comprises principally intersegment revenue relating to the supply of inventories spare 
parts and ﬁxed assets to the group’s production entities intersegment revenue is recognised based on costs incurred plus  
a ﬁxed margin basis external revenue shown within corporate and other represents revenue from services provided to third 
parties by the group’s nonmining subsidiaries 
business segment current assets and liabilities other than current inventory are not reviewed by the codm and therefore  
are not disclosed in these consolidated ﬁnancial statements
 
financial statements
annual report 2012 polymetal international plc 133 132 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
5 segment information continued
the segment adjusted ebitda reconciles to the proﬁt before income tax as follows 
for the year ended  
31 december 2012 ’000
voro khakanja dukat omolon varvara
amursk 
albazino mayskoye
total 
reportable 
segments
corporate 
and other
intersegment 
operations 
and balances total
revenue from external 
customers 268427 302482 672881 295748 215241 99182 – 1853961 104 – 1854065
intersegment revenue 183 674 9730 10587 480432 491019 –
cost of sales excluding 
depreciation depletion and 
writedown of inventory to 
net realisable value 80890 101429 262198 154934 104674 51937 – 756063 366971 400085 722949
 cost of sales 103276 131788 294120 205350 118438 73069 3363 922679 366971 400085 889565
  depreciation included  
in cost of sales 21539 29477 31698 39422 14033 15496 – 151665 – – 151665
   writedown of inventory  
to net realisable value – 4 71 10571 269 4206 3363 11078 – – 11078
 rehabilitation expenses 847 878 295 423 – 1430 – 3873 – – 3873
general administrative and 
selling expenses excluding 
depreciation amortization 
and sharebased 
compensation 7823 8833 12487 9279 4329 10297 8779 61827 99428 38323 122932
  general administrative  
and selling expenses 20085 15842 23197 15581 5342 11669 9088 100804 157389 76545 181648
  intercompany sga 
expenses 10322 6545 10211 6219 858 1161 147 35463 2759 38222 –
  depreciation included  
in sga 1940 464 499 83 155 211 162 3514 923 – 4437
 sharebased compensation ––––––––54279 –54279
other operating expenses 
excl additional tax charges 6358 14535 20038 7335 6471 11946 2868 69551 17659 734 87944
 other operating expenses 6358 14535 73645 7335 18775 11946 2868 135462 17659 734 153855
  mining taxes penalties and 
accrued interest 53607 12304 65911 65911
share of loss of associates 
and joint ventures –1804 1804
adjusted ebitda 173539 177685 378158 124200 100441 34732 11647 977107 5326 53345 918436
depreciation expense 23479 29941 32197 39505 14188 15707 162 155179 923 – 156102
rehabilitation expenses 847 878 295 423 – 1430 – 3873 – – 3873
writedown of inventory to 
net realisable value – 4 71 10571 269 4206 3363 11078 – – 11078
mining taxes penalties and 
accrued interest – 53607 – 12304 – – 65911 – – 65911
sharebased compensation ––––––––54279 –54279
operating proﬁtloss 149213 146862 292130 73701 74218 13389 8446 741066 60528 53345 627193
loss on disposal  
of subsidiaries 10709
gain on acquisition  
of remaining interest  
in joint venture 21051
foreign exchange 6677
change in fair value of 
contingent consideration 4717
finance income 4657
finance costs 26787
proﬁt before tax 617365
income tax expense 216204
proﬁt for the year  
attributable to the equity 
holders of the parent 401161
current metal inventories 59437 85282 102062 119023 52097 135059 13515 566475 486 4557 562404
current nonmetal inventories 7953 53215 49432 65786 21293 45022 31200 273901 43116 19565 297452
noncurrent segment assets
  property plant and 
equipment net 90950 146146 449867 255597 153297 584363 320119 2000339 176823 27762 2149400
 goodwill 14238 8737 68411 23720 115106 115106
 noncurrent inventory 4213 7554 10993 48095 5933 9832 10119 96739 4233 – 100972
 investments in associates 29822 29822
total segment assets 162553 306435 621091 488501 301031 774276 398673 3052560 254480 51884 3255157
additions to noncurrent 
assets property plant  
and equipment 11419 28394 52452 49778 15520 93048 106262 356873 21142 5700 372315
acquired on acquistion  
of group of assets ––––––––10270 –10270
for the year ended  
31 december 2011 ’000
voro khakanja dukat omolon varvara
amursk – 
albazino mayskoye
total 
reportable 
segments
corporate 
and other
intersegment 
operations 
and balances total
revenue from external 
customers 280206 214114 531964 73417 182004 44689 – 1326394 36 – 1326430
intersegment revenue 458 202 1141 9157 8964 – – 19922 459043 478965 –
cost of sales excluding 
depreciation depletion and 
writedown of inventory  
to net realisable value 93635 88582 207526 66008 91613 27810 – 575174 368128 410311 532991
 cost of sales 118463 102473 233771 80482 104737 35701 1893 677520 368128 410311 635337
   depreciation included  
in cost of sales 23091 15563 22650 11035 12701 7493 – 92533 – – 92533
  writedown of inventory  
to net realisable value 16 2476 2657 3352 423 398 1893 6231 – – 6231
 rehabilitation expenses 1753 804 938 87 – – – 3582 – – 3582
general administrative and 
selling expenses excluding 
depreciation amortization 
and sharebased 
compensation 6778 6713 9679 8355 3972 9185 6093 50775 81919 33906 98788
  general administrative  
and selling expenses 16726 11391 18208 8990 5153 10009 6458 76935 140609 57518 160026
  intercompany expenses  
in sga 8082 4389 8007 533 827 686 119 22643 970 23612 –
  depreciation included  
in sga 1866 289 522 102 354 138 246 3517 604 – 4121
 sharebased compensation – – – – – – – – 57116 – 57116
other operating expenses 
excluding listing expenses 5071 6136 34031 3396 4194 3171 4165 60164 7066 1603 68833
 other operating expenses 5071 6136 34031 3396 4194 3171 4165 60164 16577 1603 78344
 listing expenses 9511 9511
share of loss of associates 
and joint ventures –––––––– 1952 – 1952
adjusted ebitda 175180 112885 281869 4815 91189 4523 10258 660203 14 36351 623866
depreciation expense 24957 15852 23172 11137 13055 7631 246 96050 604 – 96654
rehabilitation expenses 1753 804 938 88 – – – 3583 – – 3583
writedown of inventory  
to net realisable value 16 2476 2657 3352 423 398 1893 6231 – – 6231
listing expenses –––––––– 9511 – 9511
sharebased compensation – – – – – – – – 57116 – 57116
operating proﬁt loss 148486 98705 255102 9762 77711 3506 12397 554339 67217 36351 450771
income from disposal  
of subsidiaries 4931
foreign exchange loss 13634
change in fair value  
of derivatives 1855
change in fair value of 
contingent consideration 6828
finance income 4208
finance costs 28746
proﬁt before tax 408847
income tax expense 118985
proﬁt for the year 
attributable to the equity 
holders of the parent 289862
current metal inventories 48911 49005 92378 89414 39279 47795 16768 383550 214 5057 378707
current nonmetal  
inventories 7379 35099 41897 45621 22175 35327 10679 198177 52526 16194 234509
noncurrent segment assets
  property plant and 
equipment net 98872 151311 415421 229851 153505 483370 171645 1703975 197 999 – 1901974
 goodwill – 13431 8242 – 64537 – 22377 108587 – 108587
 noncurrent inventory 2947 6401 7356 9711 2842 8278 3912 41447 2871 – 44318
  investments in associates 
and joint ventures – –––––––23558 – 23558
total segment assets 158109 255247 565294 374597 282338 574770 225381 2435736 277168 21251 2691654
additions to  
noncurrent assets
  property plant and 
equipment 12693 39148 71878 74858 15897 155188 94476 464138 19232 3821 479549
  acquired in acquisition  
of group of assets –––––––– 79912 – 79912
 
financial statements
annual report 2012 polymetal international plc 135 134 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
6 revenue
revenue analysed by geographical regions of customers is presented below
year ended
31 december 
2012
us’000
31 december 
2011
us’000
sales within the russian federation 1055569 859720
sales to china 178059 119823
sales to europe 219546 207184
sales to kazakhstan 396543 136660
sales to other countries 2495 –
total metal sales 1852212 1323387
other sales 1853 3043
total 1854065 1326430
metal sales to related parties sales to nomosbank are disclosed in note 33
included in revenues for the year ended 31 december 2012 are revenues which arose from sales to three of the group’s largest 
customers amounting to us357 million us340 million and us234 million respectively 2011 us258 million us242 
million and us137 million respectively no other customers individually account for more than 10 of the group’s revenues
presented below is an analysis of revenue from gold silver and copper sales
year ended 31 december 2012 year ended 31 december 2011
thousand 
ounces 
tonnes 
unaudited
average 
price us 
dollar per 
troy ounce
tonne 
unaudited us dollars
thousand 
ounces 
tonnes 
unaudited
average  
price us 
dollar per  
troy ounce
tonne 
unaudited us dollars
gold thousand ounces 593 1631 966463 448 1556 697135
silver thousand ounces 27797 30 832886 17045 34 580182
copper tonnes 7011 7540 52863 6363 7240 46070
total 1852212 1323387
 
7 cost of sales
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
cash operating costs  
onmine costs note 8 404726 319740 
smelting costs note 9 335564 264414 
purchase of ore from third parties 29519 16817 
purchase of ore from related parties 3035 – 
mining tax 120910 96955 
total cash operating costs 893754 697926 
depreciation and depletion of operating assets note 10 202404 140253 
rehabilitation expenses 3873 3583 
total costs of production 1100031 841762 
increase in metal inventories 223640 215492
writedown to net realisable value note 22 11078 6232 
total change in metal inventories 212562 209260
cost of other sales 2096 2835 
total 889565 635337 
 
mining tax is a royalty payable in russian federation and kazakhstan which is calculated based on the value of the precious 
metals extracted in the period this value is usually determined based on the realised selling price of precious metals or in case  
if there were no sales during the period cost of sales of metals extracted russian federation or the average market price 
kazakhstan during the period 
mining tax in respect of the metal inventories produced during the year is recognised within cost of sales while the additional 
mining tax accruals in respect of various disputes with tax authorities are recognised within other expenses see note 12
8 onmine costs
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
consumables and spare parts 137788 110695 
services 161533 120398 
labour 100127 83299 
taxes other than income tax 1168 1839 
other expenses 4110 3509 
total note 7 404726 319740 
9 smelting costs
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
consumables and spare parts 138258 11 7 407 
services 137339 97666 
labour 57063 47 088 
taxes other than income tax 902 178 
other expenses 2002 2075 
total note 7 335564 264414 
10 depletion and depreciation of operating assets
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
mining 141491 106402
smelting 60913 33851
total note 7 202404 140253
depreciation on operating assets excludes depreciation relating to nonoperating assets included in general administrative  
and selling expenses and depreciation related to assets employed in development projects where the charge is capitalised 
depreciation expense which is excluded in the group’s calculation of adjusted ebitda see note 5 also excludes amounts 
absorbed into unsold metal inventory balances
11 general administrative and selling expenses
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
labour 92429 72291 
services 18430 14580 
sharebased compensation 54279 57 116 
depreciation 4437 4122 
other 12073 1191 7 
total 181648 160026
financial statements
annual report 2012 polymetal international plc 137 136 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
12 other expenses
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
taxes other than income tax 14205 11278 
mining taxes penalties and accrued interest note 16 65911 – 
listing expenses – 9511 
exploration expenses 32908 30212 
social payments 10544 8692 
housing and communal services 7860 6357 
loss on disposal of property plant and equipment 9325 6203 
bad debt allowance 267 1171
other expenses 12835 7262 
total 153855 78344 
exploration expenses include an us58 million write down of evaluation and exploration assets relating to the corporate and 
other segment where management have decided to suspend development activities relating to the fevralskoye ﬁeld
mining taxes penalties and accrued interest have been accrued in respect of various disputes with the russian and kazakh tax 
authorities the background to these cases and their impact on the results of the group has been set out in more detail within 
note 16 us269 million was paid during the year ended 31 december 2012 us39 million represents accrued expenses as  
of 31 december 2012 see note 34
13 employee costs
the weighted average number of employees during the year ended december 2012 was
  year ended 
31 december 
2012
number
31 december 
2011
number
voro 901 848
khakanja 1132 1021
dukat 1926 1824 
omolon 1027 913
varvara 695 657
amurskalbazino 1119 897
mayskoye 759 617
corporate and other 1434 127 4
total 8993 8051
  year ended 
 
31 december 
2012
us’000
31 december 
2011
us’000
wages and salaries 252152 204379 
social security costs 53963 40040 
sharebased payment 54279 57 116 
total payroll costs 360394 301535 
reconciliation  
less employee costs capitalised 50021 30250
less employee costs absorbed into unsold metal inventory balances 27590 30935
employee costs included in operating costs 282783 240350 
compensation for key management personnel is disclosed within note 33
14 auditor’s remuneration
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
fees payable to the auditor and their associates for the audit of the company’s annual report
united kingdom 254 250
overseas 588 555
total audit fees 842 805
auditrelated assurance services – half year review 355 –
taxation compliance services 99 28 
other services 10 3482
total nonaudit fees 464 3510
total fees 1306 4315
other services provided in the year ended 31 december 2011 relate to services in relation to the company’s listing and capital 
raising see note 1
 
15 finance costs
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
interest expense on borrowings 18523 20074 
unwinding discount on borrowings 4643 5344 
unwinding of discount on environmental obligations 3621 3328 
total 26787 28746 
interest expense on borrowings excludes borrowing costs capitalised in the cost of qualifying assets of us147 million and 
us125 million during the years ended 31 december 2012 and 2011 respectively these amounts were calculated based  
on the group’s general borrowing pool and by applying an effective interest rate of 306 and 281 respectively to cumulative 
expenditure on such assets
16 income tax
the income tax expense for the year ended 31 december 2012 is as follows
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
current income taxes 174444 127 671
excess proﬁt taxes payable in kazakhstan 17111 –
income tax expense arising in respect of lost litigation 27475 –
deferred income taxes 2826 8686
 216204 118985
a reconciliation between the reported amount of income tax expense attributable to proﬁt before income tax for the year ended 
31 december 2012 is as follows
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
proﬁt before income tax 617365 408847 
statutory income tax expense at the tax rate of 20 123473 81769 
loss incurred in taxfree jurisdictions 4336 5998 
sharebased compensation 10856 11423 
excess proﬁt taxes payable in kazakhstan 17111 – 
income tax arising in respect of lost litigation 27475 – 
income tax provision in respect of other exposures 5055 –
tax effect of nondeductible expenses and other permanent differences 36570 19795 
total income tax expense 216204 118985 
financial statements
annual report 2012 polymetal international plc 139 138 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
16 income tax continued
the actual tax expense differs from the amount which would have been determined by applying the statutory rate of 20  
for the russian federation and kazakhstan to proﬁt before income tax as a result of the application of relevant jurisdictional tax 
regulations which disallow certain deductions which are included in the determination of accounting proﬁt these deductions 
include sharebased compensation social related expenditures and other nonproduction costs certain general and 
administrative expenses ﬁnancing expenses foreign exchange related and other costs
in the normal course of business the group is subject to examination by tax authorities throughout the russian federation and 
kazakhstan out of the large operating companies of the group tax authorities have audited cjsc gold of northern urals 
cjsc magadan silver for the period up to 2009 llc okhotskaya mining and exploration company and jsc varvarinskoye  
for the period up to 2010 according to russian and kazakhstan tax legislation previously conducted audits do not fully exclude 
subsequent claims relating to the audited period 
income tax and other expenses arising in respect of lost litigation
the additional income tax charges incurred in respect of litigations in the year total us275 million and comprise us145 million 
in respect of a case concerning magadan silver sales to abn amro in 2007 and us130 million in respect of cases relating to 
the deductibility of transportation and processing expenses and of foreign exchange losses in varvara including us5 million of 
additional income tax exposures provided for and us171 million excess proﬁt tax in kazakhstan recognised for the ﬁrst time in 
2012 there was total additional income tax expense of us496 million in the year
the group has also provided for mining taxes interest and penalties totalling us659 million which are recognised within  
other operating expenses see note 12 these expenses comprised us150 million in respect of the magadan silverabn 
amro case us92 million in respect of the magadan silver met case us101 million in respect of varvara litigation and 
us316 million in respect of other exposures these principal cases are described below other exposures considered possible 
but not probable and therefore not provided for total to us3 million and are described in note 28 contingent liabilities
magadan silver litigation in respect of abn amro sales
on 10 july 2012 the supreme arbitration court of the russian federation sac made a ﬁnal ruling on the tax dispute between 
cjsc magadan silver a subsidiary of the group and tax authorities in relation to the sale of silver by the group in 2007 pursuant 
to certain sale contracts with abn amro bank
as a consequence of the supreme arbitration court decision the group recognised in full the tax liabilities interest and penalties 
of us295 million indicated in the judgement this amount comprised us145 million in income tax and us150 million in 
mining taxes penalties and accrued interest see note 12 
varvara litigation
on 5 november 2012 the kostanay regional court in kazakhstan issued a ruling on the tax dispute between jsc varvarinskoye 
and the tax authorities in respect of the deductibility of noncash foreign exchange losses and of transportation treatment and 
reﬁning charges levied by copper concentrate offtakers as a consequence of the regional court’s decision the group 
recognised liabilities of us231 million as indicated in the judgement the liability comprised us130 million in income 
tax and us101 million in penalties and accrued interest recognised within other operating expenses see note 12
magadan silver litigation in respect of mineral extraction tax ‘met’
in march 2012 a ﬁeld tax audit was concluded in relation to cjsc magadan silver with respect to all taxes duties and 
contributions to social funds for the period 1 january 2008 to 31 december 2009 as a result of this audit the tax authorities 
issued an assessment in relation to the alleged misapplication of technical loss limits in the calculation of mineral extraction tax 
the case has been heard by the ﬁrst level of the russian courts which ruled in favour of the tax authorities on 21 january 2013 
whilst the group intends to appeal the decision to the next court it has provided for liabilities arising comprising us65 million 
in respect of mineral extraction taxes and related interest and penalties of us27 million these amounts are recognised within 
other operating expenses see note 12
other exposures
at 31 december 2012 the group had raised an additional provision for certain additional exposures of us50 million in respect 
of income tax and us316 million in respect of other taxes it considers will likely be payable plus related interest and penalties 
these amounts are recognised within other operating expenses see note 12
excess proﬁt taxes in kazakhstan
under kazakhstan law excess proﬁt taxes arise where a company’s proﬁt for the year after tax exceeds 25 of allowable 
contractual expenses incurred which was the case for varvara in 2012 excess proﬁt tax is calculated on a sliding scale the 
additional current tax charge accrued for the year was 171 million 
deferred taxation
deferred taxation is attributable to the temporary differences that exist between the carrying amounts of assets and liabilities for 
ﬁnancial reporting purposes and the amounts used for tax purposes
the following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the 
reporting period
 
environmental 
obligation 
us’000
inventories 
us’000
property 
plant and 
equipment 
us’000
trade and 
other payables 
us’000
tax losses 
us’000
loan 
us’000
other 
us’000
total 
us’000
at 1 january 2012 10990 7822 78023 4521 53661 2624 2073 17224
chargecredit to 
income statement 1654 13484 4576 1343 2068 926 5743 2826 
disposal – 369 2201 88 1378 – 578 3458 
exchange differences 699 1528 8064 126 514 136 1415 6974
at 31 december 2012 13343 22465 79310 6078 57621 1834 8653 17914
 
deferred tax assets and liabilities are offset where the group has a legally enforceable right to do so the following analysis 
shows deferred tax balances after offset presented for ﬁnancial reporting purposes
 year ended
 
31 december 
2012
us’000
31 december 
2011
us’000
deferred tax liabilities 75938 79342
deferred tax assets 58024 62118
17914 17 224
tax losses carried forward represent amounts available for offset against future taxable income generated by jsc omolon gold 
mining company zk mayskoye llc albazino resources llc amursky hydrometallurgy plant llc and the company during 
the period up to 2021 each legal entity within the group represents a separate taxpaying component for income tax purposes 
the tax losses of one entity cannot be used to reduce taxable income of other entities of the group as at 31 december 2012 
and 31 december 2011 the aggregate tax losses carried forward were us2881 million rub 88 billion and us2683 million 
rub 86 billion respectively
the group believes that recoverability of the recognised net deferred tax asset dta of us576 million at 31 december 2012 is 
more likely than not based upon expectations of future taxable income in the russian federation and kazakhstan and available 
tax planning strategies
losses incurred in certain taxable entities in recent years have created a history of losses as of 31 december 2012 the group 
has concluded that there is sufﬁcient evidence to overcome the recent history of losses based on forecasts of sufﬁcient taxable 
income in the carryforward period
the group’s estimate of future taxable income is based on established proven and probable reserves which can be economically 
developed the related detailed mine plans and forecasts provide sufﬁcient supporting evidence that the group will generate 
taxable earnings to be able to fully realise its net dta even under various stressed scenarios the amount of the dta considered 
realisable however could be reduced in the near term if estimates of future taxable income during the carry forward period are 
reduced due to delays in production start dates decreases in ore reserve estimates increases in environmental obligations or 
reductions in precious metal prices
the group’s tax losses carried forward expire as follows
year ended
31 december 
2012
us’000
31 december 2014 2888
 31 december 2015 7981
31 december 2016 6692
31 december 2017 9982
31 december 2018 28792
31 december 2019 30451
31 december 2020 42087
31 december 2021 60436
31 december 2022 98794
total loss carried forward for tax purposes 288103
financial statements
annual report 2012 polymetal international plc 141 140 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
16 income tax continued
the deferred tax liabilities for taxes that would be payable on the unremitted earnings of certain of the group subsidiaries have 
not been recognised as the group has determined that the undistributed proﬁt of its subsidiaries will not be distributed in the 
foreseeable future the temporary differences associated with investments in subsidiaries for which deferred tax liabilities have 
not been recognised amount to us1712 million 2011 us10663 million
 
17 dividends
on 14 june 2012 a dividend of 20 cents per share was paid to shareholders by the company resulting in cash outﬂows of 
us765 million no dividends were paid in 2011 
on 5 december 2012 the board approved the payment of a special dividend of us050 per ordinary share which will result in 
a cash outﬂow of us191 million the dividend was paid on 21 january 2013
a ﬁnal dividend has been proposed in relation to the year of 31 cents per share 2011 20 cents per share giving a total expected 
dividend of us119 million 2011 us765 million this is subject to approval by shareholders at the annual general meeting 
and has therefore not been included as a liability in these ﬁnancial statements
18 property plant and equipment
cost
exploration 
and evaluation 
assets
us’000
mining assets 
us’000
nonmining 
assets 
us’000
capital 
construction 
inprogress 
us’000
total 
us’000
balance at 1 january 2011 64542 1280522 64069 453430 1862563
additions 63386 103286 12999 299878 479549
transfers 7 945 208807 8726 209588 –
change in decommissioning liabilities – 5876 – – 5876
acquired on acquisition of group of assets – 70156 9756 – 79912
eliminated on disposal of subsidiary 5383 – 342 – 5725
disposals 13263 12580 1167 120 27130
translation to presentation currency 6464 96541 6577 32173 141755
balance at 31 december 2011 94873 1559526 87464 511427 2253290
additions 66077 123938 18756 163544 372315
transfers 74723 436721 7187 345964 8847
change in decommissioning liabilities – 3245 – – 3245
acquired on acquisition of group of assets – 10264 6 – 10270
eliminated on disposal of subsidiary – 10815 1114 – 11929
disposals 7 654 19219 1897 2105 30875
translation to presentation currency 6352 96095 2299 26720 131466
balance at 31 december 2012 84925 2199755 98327 353622 2736629
accumulated depreciation amortisation
exploration 
and evaluation 
assets 
us’000 
mining assets 
us’000
nonmining 
assets 
us’000
capital 
construction 
inprogress 
us’000
total 
us’000
balance at 1 january 2011 – 208017 11065 – 219082
charge for the year – 155875 6697 – 162572
disposals – 5949 468 – 6417
translation to presentation currency – 22776 1145 – 23921
balance at 31 december 2011 – 335167 16149 – 351316
charge for the period – 221114 9521 – 230635
disposals – 8705 752 – 9457
eliminated on disposal of subsidiary 8369 389 8758
translation to presentation currency – 23328 165 – 23493
balance at 31 december 2012 – 562535 24694 – 587229
net book value
1 january 2011 64542 1072505 53004 453430 1643481
31 december 2011 94873 1224359 71315 511427 1901974
31 december 2012 84925 1637220 73633 353622 2149400
mining assets at 31 december 2012 included mineral rights with net book value which amounted to us370 million  
31 december 2011 us3635 million mineral rights of the group comprise assets acquired upon acquisition of subsidiaries 
and asset acquisitions
the additions and the disposals of property plant and equipment in the year ended 31 december 2012 are shown net of 
us678 million of exploration and development assets recognised on acquisition of a controlling interest in amikan holding ltd 
in february 2012 and subsequently derecognised on loss of control in that entity following its disposal in may 2012 see note 20
in the period us9 million of preproduction stripping costs at mayskoye were transferred from inventory to exploration and 
development assets 2011 usnil
no property plant and equipment were pledged as collateral at 31 december 2012 and 31 december 2011 
19 goodwill
 
31 december
2012 
us’000
31 december 
2011 
us’000
at 1 january 108587 114712
translation effect 6519 6125
at 31 december 115106 108587
goodwill has been allocated for impairment testing purposes to the following cashgenerating units
 
31 december
2012
us’000
31 december
2011
us’000
varvara 68411 64537
mayskoye 23720 22377
khakanja 14237 13431
dukat 8738 8242
total 115106 108587
the carrying amount of goodwill is reviewed annually to determine whether it is in excess of its recoverable amount the 
recoverable amount of the cashgenerating unit is determined based on a fair value less costs to sell calculation fair value is 
based on the application of the discounted cash flow method dcf using posttax cash ﬂows and the tail margin method 
the dcf method is attributable to the development of proved and probable reserves the tail margin method an extension of 
the dcf method is attributable to the development of resources beyond proved and probable reserves assuming they could 
be developed after the end of the dcf forecast period resources used in calculations are based on the amounts of measured 
and indicated and inferred resources which are adjusted for a conversion factor in order to obtain a forecast production ﬁgure 
a steady state cash ﬂow per unit of subject metal is usually applied to the annual resource recovery amount to determine the 
total annual cash ﬂow based on past experience with an appropriate risk adjustment
the group used a posttax nominal discount rate in the dcf calculations equal to its weighted average cost of capital of 9 
2011 9 the dcf method used is based on proved and probable reserves and uses the following key assumptions
 production volumes
 commodity prices
 proved and probable reserves and
 production costs
 
recoverable reserves and resources are based on the proven and probable reserves and resources in existence at the end of 
the year production costs are based on management’s best estimate over the life of the mine estimated production volumes are 
based on detailed life of mine plans and take into account development plans for the mines approved by management as part of 
the longterm planning process commodity prices are based on latest internal forecasts benchmarked against external sources 
of information 
financial statements
annual report 2012 polymetal international plc 143 142 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
19 goodwill continued
the tail margin method is used to value resources not currently included within an asset’s mine plan the methodology involves 
calculating an estimated unit cost per ounce in order to forecast net operating cash ﬂows which are discounted to present value 
while applying the tail margin method the company used the following key assumptions

resources with a conversion factor of 07 for measured and indicated resources and 05 for inferred resources and
 of subject metal for the period during which their values in real terms were relatively stable
in management’s view no reasonably possible changes in a key assumption would trigger an impairment of goodwill
20 investments in associates and joint ventures
the group’s investments in joint ventures and associates as at 31 december 2012 and 2011 consisted of the following
 31 december 2012 31 december 2011
 
voting  
power  

carrying 
value
us’000
voting  
power  

carrying  
value
us’000
associates
jsc uralpolymetal 333 10507 333 11152
polygon gold 4265 19315 ––
joint ventures
jv with anglogold ashanti limited –– 50 12406
total 29822 23558
joint venture with anglogold ashanti limited
in february 2008 the company signed an agreement to set up a strategic alliance and entered into a series of joint ventures with 
anglogold ashanti limited with each party owning 50 of each joint venture the joint ventures were created in order to execute 
development projects in several territories of the russian federation 
on 7 february 2012 the company acquired anglogold’s 50 equity interest and debt investments in the various joint venture 
companies held with polymetal note 4 the principal company acquired was amikan holding limited which owns the veduga 
gold deposit in the krasnoyarsk region of the russian federation with other entities acquired not holding any material assets or 
liabilities the consideration for the acquisition was us20 million in cash comprising us184 million for the equity and us16 
million for debt investment in amikan at the acquisition date the group’s existing 50 investment had a carrying value of 
us142 million together with a loan asset of us69 million the transaction costs were nil amikan holding limited meets the 
deﬁnition of a business under ifrs 3 2008 business combinations and the transaction was accounted for using the acquisition 
method the allocation of the purchase price based on the consideration paid and on the fair value of amikan net assets 
acquired is as follows
pre
transaction 
book value
us’000
fair value 
adjustment
us’000
fair value
us’000
exploration and development 20188 47654 67842
deferred tax asset 3577 – 3577
other assets net 230 – 230
borrowings 8464 – 8464
deferred tax liability – 9531 9531
net assets acquired 15531 38123 53654
debt investment acquired 1572
55226
satisﬁed by
carrying value of investment in jv held previously 14 175
consideration paid in cash 20000
revaluation to fair value of previously held interest 12651
bargain purchase gain negative goodwill 8400
total 55226
the total gain on acquisition of the remaining interest in the joint venture was us211 million comprising a us127 million 
revaluation to fair value of previously held interest and a bargain purchase gain of us84 million the bargain purchase gain 
resulted from anglogold ashanti limited’s strategic decision to exit the russian federation
equity investment in polygon gold inc
polygon gold inc ‘polygon’ a private shell company was initially set up between polymetal and tyner enterprises inc ‘tyner’ 
which initially held 250 and 100 shares respectively in the new venture tyner is controlled and managed by len homeniuk  
a nonexecutive director of polymetal international plc
on 14 may 2012 polymetal sold 100 of amikan holding limited to polygon in exchange for consideration of us20 million  
in cash and 750 ordinary shares of polygon in addition sibproekt llc ‘sibproekt’ an unrelated local partner provided  
a us21 million loan to polygon and received 100 newlyissued polygon shares for no consideration this resulted in polymetal 
holding an initial 818 equity ownership in polygon under the new shareholder agreement polymetal obtained one of the  
four board seats giving it signiﬁcant inﬂuence
on 4 june 2012 polygon’s share capital was increased to 1571 shares by the issuance of 471 new shares to an afﬁliate of 
gazprombank ojsc ‘gazprombank’ for a total consideration of us142 million paid in cash the proceeds from the offering 
will be used to ﬁnance the veduga project and repay part of polygon’s debt in addition gazprombank has expressed an interest 
in providing project ﬁnancing to polygon to develop veduga into a producing mine
on 7 june 2012 polymetal sold 230 of its shares in polygon to sibproekt for a total consideration of us80 million payable  
in cash us5 million of which was paid with us30 million payable by 28 february 2013
the group’s equity ownership in polygon gold inc had now decreased to 4265 it continued to exercise signiﬁcant inﬂuence 
over polygon
in addition the group has provided a us10 million convertible debt facility to polygon see note 33 
 
the effects of these transactions are shown on a combined basis below
 us’000
net assets of subsidiary disposed of 100 basis 53654
intercompany debt asset transferred to polygon 3331
less fair value of interest in associate undertaking retained 20201
net assets disposed of 36784
loss on disposal 8784
total consideration 28000
less unpaid consideration 3000
proceeds from disposal of subsidiary 25000
  
the above loss on disposal arose partly due to the 64 interest in polygon which has a fair value of 3 million being transferred 
to tyner a related party for a cash consideration of us nil in exchange for introducing the other funding partners into the 
project and for assuming an ongoing management role the remaining loss arose principally due to the dilution in polymetal’s 
economic interest as a result of the 100 shares being issued to sibproekt on 14 may 2012 for no consideration the group 
considers that sibproekt’s local operating expertise will though be of signiﬁcant beneﬁt to the project
equity investment in jsc uralpolymetal
in november 2010 a group subsidiary signed an agreement to establish jsc uralpolymetal uralpolymetal with valentorskiy 
rudnik llc and kuzmichev vv the group contributed 100 of its interest in north ural llc a subsidiary of the group holding 
galka gold zinc and silver mining licences to uralpolymetal in addition to galka assets contributed to uralpolymetal by other 
investors consist of an operating copper and zinc openpit mine an operating copper and iron ore underground mine and a 
processing plant within the framework of this agreement the group valentorskiy rudnik llc and kuzmichev vv each own 
333 557 and 11 of uralpolymetal respectively uralpolymetal was established in order to execute development projects 
in the north ural region of the russian federation concerned with silver zinc copper and iron ore extraction and processing
financial statements
annual report 2012 polymetal international plc 145 144 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
20 investments in associates and joint ventures continued
the following tables summarise the aggregate ﬁnancial position and the group’s share in the net losses of the joint venture  
with anglogold ashanti limited and the investment in uralpolymetal
polygon  
gold inc
anglogold 
ashanti limited jsc uralpolymetal
31 december
2012
us’000
31 december
2011
us’000
31 december
2012
us’000
31 december
2011
us’000
noncurrent assets 68609 89159 48894 45925
current assets 13731 477 12970 9229
noncurrent liabilities 18150 25013 10237 7582
current liabilities 19844 2592 14651 12198
equity 44347 62031 36975 35374
revenue – – 40794 3266
net lossincome 1658 1820 3660 944
group’s share in joint venture’s net lossincome 706 910 1098 315
21 noncurrent loans
 
interest rate
31 december 
2012
us’000
31 december 
2011
us’000
polygon gold
1
78 5469 6303
loans extended to third parties 800 5287 –
employees 600 4055 2659
total   14811 8962
1
  loan is advanced to a subsidiary of polygon gold an associated undertaking which previously formed part of the joint venture with anglogold ashanti limited  
see note 20 for further details 
22 inventories
 
31 december 
2012
us’000
31 december 
2011
us’000
inventories expected to be recovered after twelve months 
consumables and spare parts 62401 44318 
ore stock piles 38571 13904 
total noncurrent inventories 100972 58222 
inventories expected to be recovered in the next twelve months 
ore stock piles 297753 202339 
copper gold and silver concentrate 146406 72973 
work inprocess 65761 48859 
metal for reﬁning 21439 17 718 
doré 31045 22889 
reﬁned metals – 24
total metal inventories 562404 364802
consumables and spare parts 297452 234510 
total 859856 599312 
  
at 31 december 2012 the gold and silver concentrate included us502 million 31 december 2011 us453 million in respect 
of dukat and albazinoamursk in addition the group has presented separately the metal for reﬁning previously these amounts 
were included within work inprocess the comparative ﬁgures have been adjusted to be presented on a consistent basis
at 31 december 2012 us39 million of ore stock piles at omolon were classiﬁed as noncurrent inventories following 
management’s assessment that these stock piles will be processed starting from 2016 31 december 2011 us14 million 
previously these amounts were included within current metal inventories the comparative ﬁgures have been adjusted  
to be presented on a consistent basis
during the year ended 31 december 2012 the group recognised a us4 million writedown to net realisable value of its doré  
in albazinoamursk and us10 million writedown to net realisable value of its ore stock piles at omolon due to low content of 
precious metals during the year ended 31 december 2011 the group recognised a us28 million writedown to net realisable 
value of its ore stock piles in varvara due to poor gold and copper recovery on ore with lower content of precious metals
in addition during the year ended 31 december 2012 the group wrotedown us5 million of costs 2011 us35 million  
in omolon which did not signiﬁcantly enhance the value of the ore stock piles
during the year ended 31 december 2012 the group reversed previous obsolescence provisioning against consumables  
and spare parts inventory in the amount of us3 million year ended 31 december 2011 reversal of us06 million
the amount of inventories held at net realisable value at 31 december 2012 is us837 million 31 december 2011 nil
23 trade and other receivables
 
31 december 
2012
us’000
31 december 
2011
us’000
trade receivables 59508 37609 
nontrade receivables 30365 24035 
shortterm loans provided to entity under common control – 1522 
accounts receivable from related parties 4717 4064 
shortterm loans provided to employees 2765 1426 
shortterm loans provided to equity method investments 11792 315 
total trade and other receivables 109147 68971 
less allowance for doubtful debts 1551 980
total 107596 67 991 
trade receivables mainly relate to jsc varvarinskoye for their sales of provisionally priced copper and gold concentrate and  
to cjsc magadan silver and albazino resources ltd for their sales of provisionally priced silver concentrate of the trade 
receivables balance as of 31 december 2012 us47 million 2011 us31 million is due from one customer there are  
no other customers who represent more than 10 of the total balance of trade receivables
the average credit period on sales of copper gold and silver concentrate at 31 december 2012 was 30 days 2011 28 days  
no interest is charged on trade receivables the group’s allowance for doubtful debt relates to its nontrade receivables  
there are no trade receivables either past due or impaired as at 31 december 2012 31 december 2011 us nil
nontrade receivables include amounts receivable from sale of fuel or operating lease of machinery to contractors the  
average credit period for nontrade receivables at 31 december 2012 was 93 days 2011 143 days no interest is charged  
on nontrade receivables
nontrade receivables disclosed above include those that are past due at the end of the reporting period for which the group 
has not recognised a bad debt allowance because there has not been a signiﬁcant change in credit quality and the amounts are 
still considered to be recoverable such past due but not impaired receivables amounted to us37 million as at 31 december 
2012 2011 us28 million the majority of which mature within 90 days the group does not hold any collateral or other 
security over these balances nor does it have a legal right of offset against any amounts owed by the group to the counterparty
24 cash and cash equivalents
 
31 december 
2012
us’000
31 december 
2011
us’000
bank deposits – rub – 15695 
bank deposits – foreign currencies 4095 629259 
current bank accounts – rub 5124 2110 
 – foreign currencies 9346 11684 
other cash and cash equivalents 57 47 
total 18622 658795 
bank deposits as at 31 december 2012 bear interest of 03 per annum 2011 35 per annum with an average maturity  
at inception of 15 days 2011 90 days 
financial statements
annual report 2012 polymetal international plc 147 146 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
25 borrowings
borrowings at amortised cost
 actual interest rate at 31 december 31 december 2012 31 december 2011
type  
of rate 2012 2011
current 
us’000
non
current 
us’000
total 
us’000
current 
us’000
non
current 
us’000
total 
us’000
secured loans from third parties
us dollar denominated floating 31 326 222874 485862 708736 337346 615574 952920
total 222874 485862 708736 337346 615574 952920
unsecured loans from third parties
us dollar denominated floating 28 – – 100000 100000 –– –
us dollar denominated fixed 735 – 6859 7712 14571 –– –
euro denominated floating 28 31 5306 7243 12549 2693 12161 14854
total 12165 114955 127120 2693 12161 14854
loans from related parties
euro denominated floating 44 55 8583 15932 24515 8048 23956 32004
cad denominated floating 8 8 589 711 1300 342 1116 1458
rub denominated fixed 57 43 –2152 2152 –1859 1859
total 9172 18795 27967 8390 26931 35321
244211 619612 863823 348429 654666 1003095
bank loans
the group has a number of borrowing arrangements with various lenders these borrowings consist of unsecured and secured 
loans and credit facilities denominated in roubles us dollars euro and canadian dollars where security is provided it is in the 
form of pledge of revenue from certain sales agreements
during the year ended 31 december 2012 the group drew down a total of us1236 million and repaid us1385 million  
a net repayment of us145 million 
the group secured three new facilities in the period for a total amount of us300 million with unrelated parties two credit 
facilities were fully drawn down in the period the credit facilities are repayable in thirteen and six equal quarterly instalments 
respectively starting from ﬁrst quarter 2014 interest is payable quarterly
another credit facility was drawn down in amount of us77 million and is payable in nine quarterly instalments starting from 
second quarter 2018 interest is payable quarterly
included in the us1385 million was the repayment of the otkritie ‘repo’ facility of us250 million in february 2012 as at  
31 december 2012 the group had us913 million of undrawn funds available under its credit facilities 2011 us803 million 
the most signiﬁcant ﬁnancial covenant in place is that the ratio of net debt to ebitda must not exceed 325 
during the years ended 31 december 2012 and 2011 the group was in compliance with its debt covenants
the table below summarises maturities of borrowings
year ended 31 december
us’000
2013 244211
2014 312481
2015 259805
2016 31922
2017 7692
2018 2571
2019 3427
2020 1714
total 863823
26 environmental obligations
environmental obligations include decommissioning and land restoration costs and are recognised on the basis of existing 
project business plans as follows
 
31 december 
2012
us’000
31 december 
2011
us’000
opening balance 54463 45156 
changes in estimates for the year  
 decommissioning liabilities 3245 5876 
 rehabilitation liabilities 3873 3583 
effect of unwinding of discount 3621 3328 
amounts paid in the year 1479 213
translation effect 2970 3267
closing balance 66693 54463 
the principal assumptions used for the estimation of environmental obligations were as follows
 
2012 2011
discount rates 37469 39728
inﬂation rates 567721 5718
expected mine closure dates 222 years 123 years
the expected timings for the settlement of environmental obligations are as follows
31 december 
2012
us’000
31 december 
2011
us’000
within one year 1565 424
due from second to ﬁfth year 18765 11436
due from sixth to tenth year 32284 30339
due from eleventh to ﬁfteenth year 4318 3687
due from sixteenth to twentieth year 3793 3309
due thereafter 5968 5268
total 66693 54463
the group does not hold any assets that are legally restricted for purposes of settling environmental obligations
27 trade payables and accrued liabilities
 
31 december 
2012
us’000
31 december 
2011
us’000
trade payables 64238 61219 
dividends payable note 17 191343 – 
accrued liabilities 40851 27 856 
labour liabilities 11978 10049 
other payables 3808 8280 
total 312218 107 404 
in 2012 the average credit period for payables was 51 days 2011 51 days there was no interest charged on the outstanding 
payables balance during the credit period the group has ﬁnancial risk management policies in place which include budgeting 
and analysis of cash ﬂows and payments’ schedules to ensure that all amounts payable are settled within the credit period
financial statements
annual report 2012 polymetal international plc 149 148 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
28 commitments and contingencies
commitments
capital commitments
the group’s budgeted capital expenditure commitments as at 31 december 2012 amounted to us37 million 
2011 us427 million
forward sale commitments
the group has certain physical gold and silver forward sale commitments which are priced at the prevailing market price 
calculated with reference to the lbma or lme gold price
operating leases group as a lessee
the land in the russian federation and kazakhstan on which the group’s production facilities are located is owned by the state 
the group leases this land through operating lease agreements which expire in various years through 2058
future minimum lease payments due under noncancellable operating lease agreements at the end of the period were as follows
 
31 december 
2012
us’000
31 december 
2011
us’000
due within one year 1832 1758 
from one to ﬁve years 4278 3065 
thereafter 2702 1594 
total 8812 6417 
contingencies
taxation
russian tax currency and customs legislation is subject to varying interpretations and changes which can occur frequently 
management’s interpretation of such legislation as applied to the transactions and activity of the companies of the group may  
be challenged by the relevant regional and federal authorities recent events within the russian federation suggest that the tax 
authorities may be taking a more assertive position in its interpretation of the legislation and assessments
as a result signiﬁcant additional taxes penalties and interest may be assessed fiscal periods remain open to review by the 
authorities in respect of taxes for three calendar years preceding the year of review under certain circumstances reviews may 
cover longer periods
during the year management has been involved in a number of litigations in russia and in kazakhstan see note 16 for details  
of these cases and their outcomes 
in addition to the cases detailed within note 16 management has identiﬁed a total exposure covering taxes and related interest 
and penalties of us3 million in respect of contingent liabilities 2011 us467 million
29 fair value accounting
the following table provides an analysis of ﬁnancial instruments that are measured subsequent to initial recognition at fair value 
grouped into levels 1 to 3 based on the degree to which the fair value is observable as follows
 level 1 fair value measurements are those derived from quoted prices unadjusted in active markets for identical assets  
or liabilities
 level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are 
observable for the asset or liability either directly or indirectly and
 level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that  
are not based on observable market data unobservable inputs
at 31 december 2012 and 31 december 2011 the group held the following ﬁnancial instruments
 
31 december 2012 us’000
 level 1 level 2 level 3 total
receivables from provisional copper gold and silver concentrate sales –  59508 – 59508
contingent consideration liability –  – 25276 25276
 –  59508 25276 34232
 
31 december 2011 us’000
 level 1 level 2 level 3 total
receivables from provisional copper gold and silver concentrate sales – 37609 – 37609
contingent consideration liabilities – – 22290 22290
 – 37609 22290 15319
during the reporting periods there were no transfers between level 1 and level 2
receivables from provisional copper gold and silver concentrate sales
the fair value of receivables arising from copper gold and silver concentrate sales contracts that contain provisional pricing 
mechanisms is determined using the appropriate quoted forward price from the exchange that is the principal active market  
for the particular metal as such these receivables are classiﬁed within level 2 of the fair value hierarchy
contingent consideration liabilities
in 2008 the group recorded a contingent consideration liability related to the acquisition of 981 of the shares in jsc omolon 
gold mining company omolon the fair value of the contingent consideration liability was determined using a valuation model 
which simulates expected production of gold and silver at the kubaka mine and future gold and silver prices to estimate future 
revenues of omolon this liability is revalued at each reporting date based on 2 of the life of mine revenues with the resulting 
gain or loss recognised in the consolidated income statement the liability recognised at 31 december 2012 was us25 million 
2011 us223 million
the table below sets forth a summary of changes in the fair value of the group’s level 3 ﬁnancial liabilities for the year  
ended 31 december 2012
 
31 december 
2012
us’000
31 december 
2011
us’000
opening balance 22290 23754 
additions 54 – 
change in fair value included in proﬁt or loss 4717 6828 
translation effect 53 1349
settlement 1838 6943
total 25276 22290 
additions in the year represent the contingent consideration payable by the group on semchenskoye zoloto acquisition  
see note 4 for further details
the directors consider that a change in a reasonably possible valuation assumption used would not have a material effect  
on the group
commodity forward contracts
the group enters into forward contracts for the physical delivery of metals which will be priced according to the prevailing 
london bullion market association or london metal exchange index the group’s policy is not to enter into ﬁxed priced 
contracts the forward sales contracts qualify for the normal purchasesales or ‘own use’ exemption for accounting purposes 
and are outside the scope of ias 39 financial instruments recognition and measurement
derivatives
the group closed the open derivative positions at 6 april 2011 the fair value of commodity forward contracts was determined 
by discounting contractual cash ﬂows using a discount rate derived from observed us treasury yield curve rates contractual 
cash ﬂows were calculated using a forward pricing curve derived from market forward prices for each commodity see note 30
financial statements
annual report 2012 polymetal international plc 151 150 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
30 risk management activities
capital management
the group manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising 
the return to stakeholders through the optimisation of the debt and equity balance the group’s overall strategy remains from 
prior years
the capital structure of the group consists of net debt borrowings as detailed in note 25 offset by cash and bank balances as 
detailed in note 24 and equity of the group comprising the stated capital account reserves and retained earnings as detailed 
in note 31
the group is not subject to any externally imposed capital requirements the group’s board reviews the capital structure of the 
group on a semiannual basis as part of this review the board considers the cost of capital and the risks associated with each 
class of capital
major categories of ﬁnancial instruments
the group’s principal ﬁnancial liabilities comprise borrowings derivatives ﬁnance lease liabilities trade and other payables  
the group has various ﬁnancial assets such as accounts receivable loans advanced and cash and cash equivalents
 
31 december 
2012
us’000
31 december 
2011
us’000
financial assets  
financial assets at fvtpl  
receivables from provisional copper gold and silver concentrate sales 59508 37609 
loans and receivables including cash and cash equivalents  
cash and cash equivalents 18622 658795 
other receivables 48088 30382 
noncurrent loans 14811 8962 
total ﬁnancial assets 141029 735748 
financial liabilities   
financial liabilities at fvtpl  
contingent consideration liability 25276 22290 
financial liabilities at amortised cost  
share purchase obligation under mto – 534597 
borrowings 863823 1003095 
dividends payable 191343 – 
trade and other payables 68046 62738 
total ﬁnancial liabilities 1148488 1622720 
trade and other payables exclude employee beneﬁts and social security
the carrying values of cash and cash equivalents share purchase obligation trade and other receivables trade and other 
payables and shortterm debt recorded at amortised cost approximate to their fair values because of the short maturities of 
these instruments the estimated fair value of the group’s longterm debt calculated using the market interest rate available  
to the group as at 31 december 2012 is us816 million and the carrying value as at 31 december 2012 is us863 million  
see note 25 carrying values of the other longterm loans provided to related parties as at 31 december 2012 and  
31 december 2011 approximated to their fair values
the main risks arising from the group’s ﬁnancial instruments are foreign currency and commodity price risk interest rate credit 
and liquidity risks
at the end of the reporting period there are no signiﬁcant concentrations of credit risk for receivables designated at fvtpl  
the carrying amount reﬂected above represents the group’s maximum exposure to credit risk for such receivables
derivative ﬁnancial instruments
presented below is a summary of the group’s derivative contracts recorded on the consolidated balance sheet at fair value
 
consolidated 
balance sheet 
location
31 december 
2012
us’000
31 december 
2011
us’000
receivable from provisional copper gold and silver concentrate sales accounts 
receivable 59508 37609 
year ended
 location of gain 
loss recorded in 
proﬁt or loss
 31 december 
2012
us’000
31 december 
2011
us’000
flat forward gold sales and purchase contracts change in
 fair value of
 derivatives – 1855
receivable from provisional copper gold and silver concentrate sales revenue 2830 5979
the group closed its open derivative positions on 6 april 2011
foreign currency and commodity price risk
in the normal course of business the group enters into transactions for the sale of its commodities denominated in us dollars 
in addition the group has assets and liabilities in a number of different currencies primarily russian rouble and kazakh tenge 
as a result the group is subject to transaction and translation exposure from ﬂuctuations in foreign currency exchange rates
the group does not use derivative instruments to currently hedge its exposure to foreign currency risk
the carrying amounts of monetary assets and liabilities denominated in foreign currencies other than functional currencies  
of the individual group entities at 31 december 2012 and 31 december 2011 were as follows
 assets liabilities
 
31 december 
2012
us’000
31 december 
2011
us’000
31 december 
2012
us’000
31 december 
2011
us’000
us dollar 78544 681023 1022458 973395 
euro 99 274 39938 49524 
gbp 79 5604 31 375 
total 78722 686901 1062427 1023294
currency risk is monitored on a monthly basis by performing a sensitivity analysis of foreign currency positions in order  
to verify that potential losses are at an acceptable level
the table below details the group’s sensitivity to changes of exchange rates by 10 which is the sensitivity rate used  
by the group for internal analysis the analysis was applied to monetary items denominated in respective currencies at the 
reporting dates
 
31 december 
2012
us’000
31 december 
2011
us’000
proﬁt or loss rub to us dollar 93453 34790
proﬁt or loss rub to euro 4979 6964
proﬁt or loss rub to gbp 5 882
proﬁt or loss kzt to us dollar 8570 2518
provisionally priced sales
under a longestablished practice prevalent in the industry copper gold and silver concentrate sales are provisionally priced at 
the time of shipment the provisional prices are ﬁnalised in a contractually speciﬁed future period generally one to three months 
primarily based on quoted lbma or lme prices sales subject to ﬁnal pricing are generally settled in a subsequent month  
the forward price is a major determinant of recorded revenue
financial statements
annual report 2012 polymetal international plc 153 152 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
30 risk management activities continued
interest rate risk
the group is exposed to interest rate risk because entities in the group borrow funds at both ﬁxed and ﬂoating interest rates 
the risk is managed by the group by maintaining an appropriate mix between ﬁxed and ﬂoating rate borrowings the group 
does not currently hedge its exposure to interest rate risk
the group’s exposure to interest rates on ﬁnancial assets and ﬁnancial liabilities are detailed in the liquidity risk section  
of this note
for ﬂoating rate liabilities the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting 
period was outstanding for the whole period a 100 basis point increase or decrease is used when reporting interest rate risk 
internally to key management personnel and represents management’s assessment of the reasonably possible change  
in interest rates
if interest rates had been 100 basis points higherlower and all other variables were held constant the group’s proﬁt for the year 
ended 31 december 2012 would decreaseincrease by us77 million 2011 us65 million this is mainly attributable to the 
group’s exposure to interest rates on its variable rate borrowings
the group’s sensitivity to interest rates has increased during the current period mainly due to the increase in variable rate  
debt instruments
credit risk
credit risk is the risk that a customer may default or not meet its obligations to the group on a timely basis leading to ﬁnancial 
losses to the group the group’s ﬁnancial instruments that are potentially exposed to concentration of credit risk consist 
primarily of cash and cash equivalents and loans and receivables
accounts receivable are regularly monitored and assessed and where necessary an adequate level of provision is maintained 
trade accounts receivable at 31 december 2012 and 31 december 2011 are represented by provisional copper gold and silver 
concentrate sales transactions a signiﬁcant portion of the group’s trade accounts receivable is due from reputable export 
trading companies with regard to other loans and receivables the procedures of accepting a new customer include checks by 
a security department and responsible onsite management for business reputation licences and certiﬁcation creditworthiness 
and liquidity generally the group does not require any collateral to be pledged in connection with its investments in the above 
ﬁnancial instruments credit limits for the group as a whole are not set up
the credit risk on liquid funds is limited because the counterparties are banks with high creditratings assigned by international 
creditrating agencies the major ﬁnancial assets at the balance sheet date other than trade accounts receivable presented  
in note 24 are cash and cash equivalents at 31 december 2012 of us186 million 2011 us659 million
liquidity risk
liquidity risk is the risk that the group will not be able to settle all liabilities as they are due
the group’s liquidity position is carefully monitored and managed the group manages liquidity risk by maintaining detailed 
budgeting cash forecasting processes and matching the maturity proﬁles of ﬁnancial assets and liabilities to help ensure that 
it has adequate cash available to meet its payment obligations
the following tables detail the group’s remaining contractual maturity for its ﬁnancial liabilities with agreed repayment periods 
the tables have been drawn up based on the undiscounted cash ﬂows of ﬁnancial liabilities based on the earliest date on which 
the group can be required to pay the tables include both interest and principal cash ﬂows to the extent that interest ﬂows are 
ﬂoating rate the undiscounted amount is derived from interest rate curves at the end of the reporting period the contractual 
maturity is based on the earliest date on which the group may be required to pay
presented below is the maturity proﬁle of the group’s ﬁnancial liabilities as at 31 december 2012
     
31 december 
2012
us’000
31 december 
2011
us’000
 
less than  
3 months 312 months 15 years
more than
5 years total total
share purchase obligation under mto – – – – – 534597 
special dividend payable 191343 – – – 191343 – 
borrowings 50894 221967 641703 8591 923155 1082909 
accounts payable and accrued expenses 63131 4589 326 – 68046 67 120 
contingent consideration – 2231 15135 18893 36259 39144 
total 305368 228787 657164 27484 1218803 1723770 
31 stated capital account and retained earnings
as at 31 december 2012 the company’s issued share capital consisted of 383206204 ordinary shares 2011 382685782 
ordinary shares of no par value each carrying one vote the company does not hold any shares in treasury 2011 none  
the ordinary shares reﬂect 100 of the total issued share capital of the company
the movements in the stated capital account in the year were as follows
stated capital 
account
no of shares
treasury 
shares  
no of shares
total shares 
no of shares
stated capital 
account 
us’000
balance at 1 january 2011 na – – 865483
issue of treasury shares in exchange for assets – – – 66966
amortisation of bonus received from depository – – – 819
issuance of ordinary shares under issf 332641770 – 332641770 –
issuance of share on ipo 53350000 – 53350000 762641
repurchased shares 3305988 3305988 – 46649
cancellation of repurchased shares 3305988 3305988 –
noncontrolling interest arising on restructuring – – – 82874
balance at 31 december 2011 382685782 – 382685782 1566386
issue of shares in exchange for assets 520422 – 520422 9737
balance at 31 december 2012 383206204 – 383206204 1576123
retained earnings
reserves available for distribution to shareholders are based on the available cash in the company under jersey law the ability 
to distribute cash up to the company from the russian and kazakh operating companies will be based on the statutory historical 
information of each standalone entity which is prepared in accordance with russian or kazakh accounting standards and 
which differs slightly from ifrs russian legislation identiﬁes the basis of distribution as accumulated proﬁt however current 
legislation and other statutory regulations dealing with distribution rights are open to legal interpretation consequently actual 
distributable reserves may differ from the amount of accumulated proﬁt under russian statutory accounting rules
weighted average number of shares diluted earnings per share
the group had potentially dilutive securities namely the group’s equitysettled share appreciation plan which was established 
during 2010 see note 32
basicdilutive earnings per share were calculated by dividing proﬁt for the year attributable to equity holders of the parent  
by the weighted average number of outstanding common shares beforeafter dilution respectively the calculation of the 
weighted average number of outstanding common shares after dilution is as follows
year ended
31 december 
2012
31 december 
2011
weighted average number of outstanding common shares 382705692 366969369
dilutive effect of share appreciation plan – 25875610
weighted average number of outstanding common shares after dilution 382705692 392844979
there were no adjustments required to earnings for the purposes of calculating dilutive earnings per share in the  
current year 2011 nil 
financial statements
annual report 2012 polymetal international plc 155 154 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
30 risk management activities continued
the group has certain sharebased payment awards issued in 2010 which currently vest in line with the company’s weighted 
average share price from december 2012 to june 2013 against a ﬁxed target for further details see note 32 based on the 
company’s share price in the equivalent six month period to 31 december 2012 then these awards are not dilutive for the 
purposes of calculating diluted eps and accordingly both basic and diluted eps are identical for the year ended  
31 december 2012
these awards were dilutive for the year ended 31 december 2011 the dilutive effect of equitysettled share appreciation rights 
has been calculated using the treasury stock method
32 sharebased payments
in 2010 the group established an equity incentive plan the plan for executive directors and senior employees of the group  
in which the grant of equitysettled share appreciation rights up to 30 million shares in jsc polymetal the bonus fund was 
approved the number of awards to which a qualifying participant is entitled was determined by the board of jsc polymetal  
on 8 november 2010 group management believes that such awards better align the interests of its employees with those  
of its shareholders
under the terms of the plan these awards were eligible for immediate vesting on the group restructuring and listing however  
the executive directors and senior managers waived that right and the entitlement to jsc polymetal shares was exchanged for 
an entitlement to polymetal international shares on a one to one basis with the same vesting conditions as existed previously  
as the cancellation and reissuance of the awards was done solely to preserve the existing rights of the award holders no 
accelerated sharebased charge has been recognised
the aggregate number of shares comprising the bonus fund will be determined on 11 june 2013 and will depend on the excess 
of the weighted average price of the company’s shares during the period between 11 december 2012 and 11 june 2013 over  
a target price of us1674 if the average share price is below the target ﬁgure there will be nil vesting the weighted average 
price of the company’s shares during the period between 1 july 2012 and 31 december 2012 was us1645
equitysettled stock appreciation rights granted have an exercise price of one penny and vest at the end of a 26 year  
service period
the fair value of the awards granted during the year ended 31 december 2010 was estimated using a twostage montecarlo 
model the fair value determined is then recognised on a straightline basis over the vesting period use of twostage monte
carlo option pricing requires management to make certain assumptions with respect to selected model inputs the following 
assumptions were used to determine the grant date fair value
 expected forfeitures this assumption is estimated using historical trends of executive director and employee turnover  
as the group typically only grants awards to senior employees and the turnover rate for such employees is minimal the group 
has estimated expected forfeitures to be 5 estimated forfeitures are adjusted over the requisite service period to the extent 
actual forfeitures differ or are expected to differ from such estimates changes in estimated forfeitures are recognised in the 
period of change and impact the amount of expense to be recognised in future periods
 expected volatility expected volatility has been estimated based on an analysis of the historical stock price volatility of the  
jsc polymetal gdrs from february 2007  when the jsc polymetal gdrs became publicly traded
 expected life the average expected life was based on the contractual term of the option of 36 years as the plan has a  
26 years vesting condition and the participant may exercise their right to redeem shares within one year after vesting occurs 
the group used the 26 years expected term for the ﬁrst stage of the montecarlo simulation the first date and 36 years for 
the second stage the second date
 fair value of common stock is equal to the market price of jsc polymetal’s underlying global depositary receipts gdrs  
at the grant date
 riskfree interest rate the riskfree rate is based on us treasury zerocoupon issues with a remaining term equal to the 
expected life assumed at the date of grant
at the grant date the group had not historically declared dividends and management believed the company would not declare  
a dividend over the life of the option as such the expected annual dividend per share was therefore nil any subsequent change 
in dividend policy will be taken into account when valuing options granted in the future
risk free rate 079 for the ﬁrst date 124 for the second date
expected dividend yield nil
expected volatility 40
expected life years 26 for the ﬁrst date 36 for the second date
fair value per share us dollars 1697
a summary of option activity under the plan for the year ended 31 december 2012 is presented below
 
awards 
weighted 
average 
exercise price 
per share 
us dollar 
weighted 
average 
fair value of 
awards per 
share us 
dollar 
weighted 
average 
remaining 
contractual 
term
awards at 1 january 2012 29655000 003 496 245
forfeited 345000      – 
nonvested awards at 31 december 2012 29310 000 003 496 145
none of the share awards outstanding as at 31 december 2012 were exercisable as they are not fully vested for the year ended 
31 december 2012 sharebased compensation in the amount of us54 million 2011 us57 million was recognised in 
general administrative and selling expenses in the consolidated income statement see note 11 
as at 31 december 2012 and 31 december 2011 the group had us247 million and us757 million respectively of 
unrecognised sharebased compensation expense related to nonvested equitysettled stock appreciated rights with a weighted 
average expected amortisation period of 045 years and 145 years respectively
 
33 related parties
related parties are considered to include shareholders afﬁliates associates joint ventures and entities under common 
ownership and control with the group and members of key management personnel in the course of its business the group 
entered into various transactions with nomosbank an entity in which alexander nesis a signiﬁcant shareholder of the 
company note 1 also holds a substantial interest equity method investments and its employees and ofﬁcers as follows
 year ended
 
31 december 
2012
us’000
31 december 
2011 
us’000
income from transactions with related parties
revenue from sales to nomosbank 466250 258794
interest income on deposits placed with nomosbank 1500 – 
other income from equity method investments 3680 1559 
expenses from transactions with related parties
interest expense on loans provided by nomosbank 2016 2339 
purchases from equity method investments 3035 – 
lease payments to nomos leasing – 5082 
outstanding balances owed to or from related parties at 31 december 2012 are presented below
 
31 december 
2012
us’000
31 december 
2011
us’000
shortterm loans provided to equity method investments 11792 315 
longterm loans provided to equity method investments 5469 6303 
shortterm loans provided to entity under common control – 1522 
total loans provided to related parties 17261 8140 
shortterm loans provided by nomosbank 9172 8318 
longterm loans provided by nomosbank 16643 25223 
longterm loans provided by equity method investments 2152 1860 
total loans provided by related parties unsecured 27967 35401 
accounts receivable from related parties 4717 2940 
interest receivable from related parties 836 1573 
carrying values of other longterm loans provided to related parties as at 31 december 2012 and 31 december 2011 
approximate their fair values details of the signiﬁcant terms of the loans provided by related parties are disclosed in note 25 
in the year the group entered into an agreement with tyner enterprises an entity controlled by leonard homeniuk  
a nonexecutive director of polymetal as set out in note 20 on 14 may 2012 a 64 interest in a new venture polygon  
was transferred to tyner and a put option on those shares was granted
the amounts outstanding at the balance sheet dates are unsecured and expected to be settled in cash no expense has been 
recognised in the reporting period for bad or doubtful debts in respect of the amounts owed by related parties all trade payable 
and receivable balances are expected to be settled on a gross basis
financial statements
annual report 2012 polymetal international plc 157 156 polymetal international plc annual report 2012 financial statements 
notes to the consolidated ﬁnancial statements
continued
33 related parties continued
the remuneration of directors and other members of key management personnel during the periods was as follows
 year ended
31 december 
2012
us’000
31 december 
2011
us’000
sharebased payments 27682 28901 
shortterm beneﬁts of board members 2454 2278 
shortterm employee beneﬁts of other key management personnel
1
2981 1779 
postemployment beneﬁts 264 70 
1
  for the years ended 31 december 2012 and 2011 key management personnel of the group are considered to be the directors of the company and the directors  
of jsc polymetal
34 notes to the consolidated statements of cash ﬂows
 year ended
notes
31 december 
2012
us’000
31 december 
2011
us’000
proﬁt before tax 617365 408847 
adjustments for   
depreciation and depletion recognised in statement of comprehensive income 156102 96654 
mining taxes penalties and accrued interest 12 39150 – 
writedown of exploration assets 18 7654 13263 
writedown of inventory to net realisable value 7 11078 6232 
sharebased compensation 1132 54279 57 116 
finance costs 15 26787 28746 
finance income 4657 4208
loss on disposal of property plant and equipment 12 9325 6203 
change in contingent consideration liability 29 4717 6828 
change in allowance for doubtful debts 12 267 1171
rehabilitation expenses 26 3873 2862 
loss from equity method investments 20 1804 1952 
change in fair value of derivatives 29 – 1855 
foreign exchange gainloss 6677 13634 
proﬁtloss on disposal of subsidiaries 4 10709 4931 
gain on acquisition of remaining interest in joint venture 20 21051 –
other noncash expenses 5152 1388 
movements in working capital   
increase in inventories 219678 225751
decreaseincrease in vat receivable 14262 22766
increase in trade and other receivables 34284 19699
decreaseincrease in prepayments to suppliers 9307 11437
increase in trade and other payables 7305 6394 
increase in other taxes payable 8480 8676 
cash generated from operations 701269 370687 
interest paid 34629 32414
income tax paid 170805 126317
net cash generated by operating activities 495835 211956 
additions to property plant and equipment of us8 million and us169 million during the year ended 31 december 2012  
and 31 december 2011 respectively were acquired on deferred payment terms 
other noncash transactions during the year ended 31 december 2012 includes the issuance of us15 million of shares  
for the acquisition of assets in 2012 2011 the issuance of us670 million of treasury shares for the acquisition of assets
 
35 subsequent events
on 24 january 2013 the group completed the acquisition of 100 of olymp ltd a russian legal entity holding the mining and 
exploration licence for the olcha goldsilver deposit in exchange for 775000 new ordinary shares in polymetal following the 
admittance of the newlyissued shares to trading the total issued share capital of the company comprised 383981204 shares
olymp ltd does not meet the deﬁnition of a business pursuant to ifrs 3 2008 thus it is accounted for as an acquisition  
of a group of assets the group purchased mineral rights of us134 million and other current liabilities of 001 million
on 20 february 2013 the group has entered into a binding memorandum of understanding with vitalex investments ltd and 
arrowline investments ltd to acquire a 100 interest in zao ‘maminskaya gornorudnaya kompania’‘mgk’ which holds an 
exploration and mining licence for the maminskoye gold mining ﬁeld ‘maminskoye’ 
on 9 april 2013 the group completed the acquisition of 100 of mgk the consideration for the equity investment was  
us39 million payable in cash and 5491661 of polymetal’s ordinary shares valued at the acquisition date at us746 million 
the debt investment in mgk was acquired for a consideration payable in cash and equalling to its carrying value of  
us8 million
mgk meets the deﬁnition of a business pursuant to ifrs 3 2008 thus it was accounted for at fair value using the  
acquisition method 
the allocation of the purchase price has not been ﬁnalised as at the date of these ﬁnancial statements and will be ﬁnalised  
in 2013 upon completion of a mineral rights valuation and a deferred taxes assessment the preliminary allocation of the 
purchase price based on the consideration paid and the fair value of the assets acquired was as follows
 us’000
net assets acquired 
mineral rights 115 127 
property plant and equipment 2952 
noncurrent liabilities 9896
deferred tax liability 23025
other assets net 1400 
net assets acquired 86558 
consideration 
fair value of shares issued 74624 
cash 3900 
debt investment 8034 
a ﬁnal dividend has been proposed in relation to the year of 31 cents per share 2011 20 cents per share giving a total expected 
dividend of us119 million 2011 us765 million this is subject to approval by shareholders at the annual general meeting 
and has therefore not been included as a liability in these ﬁnancial statements
financial statements
annual report 2012 polymetal international plc 159 158 polymetal international plc annual report 2012 mineral resources and ore reserves as at 1 january 2013
1
 
tonnage content
mineral resources kt au koz ag koz cu kt pb kt zn kt ge koz
measured 13496 683 36911 17 10 – 1385
indicated 51721 2936 54340 84 36 25 4260
measured  indicated 65217 3619 91251 101 46 25 5645
inferred 111918 11266 54852 180 41 3 13082
measured  indicated  inferred 177136 14885 146103 281 87 28 18727
ore reserves
proved 61653 5373 186921 12 12 – 8548
probable 57760 4224 120706 71 11 – 6590
proved  probable 119413 9597 307627 83 23 – 15138
1
  mineral resources and ore reserves are reported in accordance with the jorc code 2004 mineral resources are in addition to ore reserves discrepancies in 
calculations are due to rounding
this estimate was prepared by employees of jsc polymetal management company and cjsc polymetal engineering 
subsidiaries of the company led by mr valeri tsyplakov who assumes overall responsibility for the mineral resources  
and ore reserves report mr tsyplakov is the employed fulltime as the managing director of cjsc polymetal engineering  
and has more than 12 years’ experience in gold and silver mining he is a member of the institute of materials minerals  
 mining mimmm london and a competent person under the jorc code
other competent persons employed by the company are responsible for relevant research on which the mineral resources  
and ore reserves estimate is based they include 
 geology and mineral resources – vladimir ryabukhin adviser to director general of jsc polymetal management company 
mimmm with 39 years’ relevant experience
 geology and mineral resources – mikhail fomkin head of geologic modelling mimmm with 27 years’ relevant experience 
 mining and ore reserves – igor epstein head of mining process department mimmm with 31 years’ relevant experience
 concentration and metals – igor agapov deputy director of science and technology mimmm with 15 years’ relevant 
experience and
 environmental issues – tatiana kuleshova director for ecology mimmm with 22 years’ relevant experience
all competent persons have given consent for their material to be included in the report based on the information provided  
by them and in the form and the context in which the material is hereby presented
metals prices used in estimating mineral resources and ore reserves are listed below unless otherwise indicated  
in the footnotes
ore reserves
au  us1300oz
ag  us23oz
cu  us6500t
pb  us1800t
mineral resources
au  us1500oz
ag  us26oz
cu  us7800t
gold equivalent data is based on 160 agau and 51 cuau conversion ratios lead and zinc are not included in calculation  
of gold equivalent data
ore reserves precious metals deposits as at 1 january 2013
1
ore reserves
tonnage grade content
proved kt au gt ag gt ge gt au koz ag koz ge koz
dukat
2
9200 09 451 84 254 133382 2477
voro
3
14500 29 4 29 1340 1744 1369
lunnoye 1640 16 253 58 83 13341 305
arylakh 220 06 307 58 5 2206 41
khakanja 1670 20 154 46 108 8274 246
mayskoye
4
2699 97 – 97 839 – 839
albazino 9280 45 – 45 1329 – 1329
sopka kvartsevaya 3510 25 103 43 285 11652 480
birkachan
5
6750 16 5 17 353 1164 372
dalneye 1960 35 85 49 218 5344 307
tsokol kubaka 390 64 11 66 81 134 83
ozerny 560 54 34 60 97 615 108
avlayakan 160 149 95 165 74 475 82
total proved 52539 48 5066 178331 8038
       
probable
dukat
2
5200 12 448 87 202 74837 1449
lunnoye 1720 10 363 71 56 20052 391
arylakh 300 11 807 146 11 7900 143
khakanja 140 40 195 73 18 880 33
mayskoye
4
5178 95 – 95 1587 – 1587
albazino 4110 38 – 38 502 – 502
sopka kvartsevaya 180 39 146 63 22 837 36
birkachan
5
5440 34 15 36 592 2548 635
tsokol kubaka 710 61 11 63 139 245 143
ozerny 240 49 35 55 38 267 42
avlayakan 270 221 181 251 193 1579 219
total probable 23488 69 3361 109145 5180
       
proved  probable
dukat
2
14400 10 450 85 455 208219 3926
voro
3
14500 29 4 29 1340 1744 1369
lunnoye 3360 13 309 64 139 33393 696
arylakh 520 09 595 109 16 10105 184
khakanja 1810 22 157 48 126 9154 279
mayskoye
4
7877 96 – 96 2426 – 2426
albazino 13390 43 – 43 1831 – 1831
sopka kvartsevaya 3690 26 105 44 308 12489 516
birkachan
5
12190 24 10 26 945 3712 1007
dalneye 1960 35 85 49 218 5344 307
tsokol kubaka 1100 62 11 64 220 379 226
ozerny 800 53 34 58 135 882 150
avlayakan 430 194 150 219 267 2055 301
total proved  probable 76027 54 8427 287475 13218
1
 ore reserves are reported in accordance with the jorc code 2004 discrepancies in calculations are due to rounding 
2
 including nachalny2
3
 including voro south 
4
 estimate prepared by snowden as at 01072011 price au  us900oz
5
 ore reserves for underground mining were not reestimated previous estimation as at 01072011 by srk consulting is left price au  us900oz and ag  us145oz
appendices
annual report 2012 polymetal international plc 161 160 polymetal international plc annual report 2012
appendices
reserves and resources
as at 1 january 2013 ore reserves polymetallic ore deposits as at 1 january 2013
1
ore reserves
tonnage grade content
proved kt au gt ag gt cu  pb  ge gt au koz ag koz cu kt pb kt ge koz
goltsovoye
2
404– 661– 308 110 –8590– 124 143
varvara
3
8710 1 1 – 055 – 13 307 – 1 19 – 367
total proved 9114 17 307 8590 119 124 510
probable
goltsovoye
2
492 – 732 – 218 122 – 11562 – 107 193
varvara
3
33780 08 – 044 – 11 863 – 710 – 1218
total probable 34272 13 863 11562 710 107 1410
proved  probable
goltsovoye
2
896– 700– 258 117 –20152– 232 336
varvara
3
42490 09 – 045 – 12 1170 – 829 – 1585
total proved  
probable 43386 14 1170 20152 829 232 1920
1
 ore reserves are reported in accordance with the jorc code 2004 discrepancies in calculations are due to rounding 
2
 estimate prepared by wardell armstrong at ag price  us23oz and pb price  us1800t lead is not included in gold equivalent calculation
3
 cu grade only represents average grade of ﬂoat feed ore reserves of ﬂoat feed 21 mt proved and 162 mt probable
mineral resources precious metals as at 1 january 2013
1
mineral resources
tonnage grade content
measured kt au gt ag gt ge gt au koz ag koz ge koz
dukat
 2
245006 29856 4823463 439
voro
 3
139015 415 66 161 69
lunnoye 370 15 241 55 18 2869 66
arylakh 140 08 301 58 3 1270 25
khakanja 220 26 166 54 19 1175 38
mayskoye
 4
46363 –63 93 – 93
albazino
5
1730 40 – 40 223 – 223
sopka kvartsevaya 190 19 78 32 11 467 19
birkachan
6
660 09 6 10 19 120 21
dalneye 430 20 41 27 28 572 38
tsokol kubaka 20 57 11 59 4 8 4
avlayakan 20 110 133 132 7 89 9
ozerny 2202526291818721
total measured 8303 40 558 30381 1064
indicated
dukat
2
1790 06 317 59 35 18226 339
lunnoye 480 09 286 57 14 4420 88
arylakh 190 07 417 76 4 2474 45
khakanja 80 34 145 59 9 374 15
mayskoye
4
1642 61 – 61 324 – 324
albazino
5
10750 43 – 43 1498 – 1498
sopka kvartsevaya 30 29 110 47 3 118 5
birkachan
6
1320 12 8 14 53 340 59
dalneye 200 22 46 30 14 295 19
oroch
7
1365 33 143 56 143 6284 247
tsokol kubaka 140 49 9 51 22 41 22
avlayakan 80 126 97 142 31 236 35
ozerny 4902913324620650
total indicated 18557 46 2197 33014 2747
measured  indicated
dukat
2
4240 06 306 57 83 41690 778
voro
3
139015 415 66 161 69
lunnoye 850 12 267 56 33 7289 154
arylakh 330 07 369 69 7 3744 70
khakanja 300 28 161 55 27 1549 53
mayskoye
4
2105 62 – 62 417 – 417
albazino
5
12480 43 – 43 1722 – 1722
sopka kvartsevaya 220 20 83 34 14 585 24
birkachan
6
1980 1 1 7 12 72 460 80
dalneye 630 21 43 28 42 868 57
oroch
7
1365 33 143 56 143 6284 247
tsokol kubaka 160 50 10 52 26 49 26
avlayakan 100 123 105 140 38 325 43
ozerny 7102817316439270
total measured  indicated 26860 44 2754 63395 3811
appendices
annual report 2012 polymetal international plc 163 162 polymetal international plc annual report 2012
appendices
reserves and resources
as at 1 january 2013
continued mineral resources
tonnage grade content
inferred kt au gt ag gt ge gt au koz ag koz ge koz
dukat
2
30 06 360 661 3637
lunnoye 1020 16 435 88 52 14272 290
arylakh 90 09 340 65 3 1015 20
khakanja 10 31 274 77 1 88 2
mayskoye
4
16016 86 – 86 4428 – 4428
albazino
5
12730 49 – 49 1999 – 1999
birkachan
6
560 113 51 122 202 915 217
oroch
7
561 33 225 70 59 4056 126
tsokol kubaka 350 68 12 70 77 134 79
avlayakan 70 144 234 183 32 528 41
kirankan
8
142 65 8 67 30 39 30
svetloye
9
4083 58 4 59 767 544 776
ozerny 2503216352612528
kutyn
10
5505 41 – 41 71 7 – 71 7
tamunier
11
24070 19 – 19 1475 – 1475
total inferred 65487 49 9868 22079 10236
measured  indicated  inferred
dukat
2
4270 06 306 57 84 42053 785
voro
3
139015 415 66 161 69
lunnoye 1870 14 359 74 85 21561 444
arylakh 420 08 362 68 10 4759 89
khakanja 310 28 164 56 28 1637 56
mayskoye
4
18121 83 – 83 4845 – 4845
albazino
5
25210 46 – 46 3721 – 3721
sopka kvartsevaya 220 20 83 34 14 585 24
birkachan
6
2540 34 17 36 274 1376 296
dalneye 630 21 43 28 42 868 57
oroch
7
1926 33 167 60 201 10341 374
tsokol kubaka 510 63 11 65 102 183 105
avlayakan 170 132 159 158 70 852 85
kirankan
8
142 65 8 67 30 39 30
svetloye
9
4083 58 4 59 767 544 776
ozerny 9602917329051798
kutyn
10
5505 41 – 41 71 7 – 71 7
tamunier
11
24070 19 – 19 1475 – 1475
total measured  indicated  inferred 92347 47 12622 85474 14047
1
  mineral resources are reported in accordance with the jorc code 2004 mineral resources are additional to ore reserves discrepancies in calculations are due  
to rounding
2
 including nachalny2
3
 including voro south
4
 estimate prepared by snowden as at 01072011 price au  us1150oz
5
  revaluation performed only for mineral resources of anﬁsa and olga zones for openpit mining initial estimate of mineral resources performed by snowden as at 
01082012 price au  us1500oz zones ekaterina 1 and 2 and resources of anﬁsa and olga zones including nadezhda for underground mining remained unchanged
6
  mineral resources for underground mining were not reestimated previous estimate as at 01072011 by srk consulting remained unchanged price au  us 1150oz and 
ag  us185oz
7
 estimate prepared by srk consulting as at 01072011 price au  us900oz and ag  us13oz
8
 estimate prepared by srk consulting as at 01072011 price au  us1000oz and ag  us16oz
9
 estimate prepared by snowden as at 01072011 cog  15 gt
10
 estimate prepared by snowden as at 01072011 cog  30 gt
11
  estimate prepared by snowden as at 01012012 cog au  10 gt the mineral resource estimate includes ore zone 2 where inferred mineral resources are estimated at 
840 kt grading 40 gt au 49 gt ag containing 109 koz au and 1327 koz ag in other parts of the deposit there are no silver mineral resources
mineral resources polymetallic ore deposits as at 1 january 2013
1
mineral 
resources
tonnage grade content
measured kt au gt ag gt cu  pb  zn  ge gt au koz ag koz cu kt pb kt zn kt ge koz
goltsovoye
2
263– 773– 39– 129 –6530 – 103– 109
varvara
3
4930 08 – 048–– 13 125 – 174–– 212
total 
measured 5193 19 125 6530 174 103 – 321
indicated
goltsovoye
2
408– 617– 28– 103 –8097 – 114– 135
varvara
3
31660 07– 047 –– 11 739 – 799––1139
perevalnoye
4
1096 – 375 034 23 23 68 – 13229 37 248 250 239
total 
indicated 33164 14 739 21326 836 362 250 1513
measured  
indicated
goltsovoye
2
671 – 678 – 33 – 113 – 14627 – 217 – 244
varvara
3
36590 07 – 047–– 11 865– 973––1351
perevalnoye
4
1096 – 375 034 23 23 68 – 13229 37 248 250 239
total 
measured  
indicated 38357 15 865 27856 1010 465 250 1834
inferred
goltsovoye
2
1614– 622– 23– 104 –32260– 378 – 538
varvara
3
447 40 10 – 058 – – 16 1398 – 1800 – – 2298
perevalnoye
4
78 – 206 046 37 37 41 – 513 04 28 28 10
total  
inferred 46432 19 1398 32773 1804 406 28 2846
measured  
indicated  
inferred
goltsovoye
2
2285– 638– 26– 106 –46887– 594 – 781
varvara
3
81330 09 – 054 – – 14 2263 – 2773 – – 3649
perevalnoye
4
1174 – 364 035 24 24 66 – 13742 41 276 278 249
total 
measured  
indicated  
inferred 84789 17 2263 60629 2814 871 278 4680
1
  mineral resources are reported in accordance with the jorc code 2004 mineral resources are additional to ore reserves discrepancies in calculations are due  
to rounding
2
  estimate prepared by wardell armstrong cog ag for ore zone 1 is 50 gt and for ore zone 2 is 150 gt of silver equivalent lead is not included in gold equivalent calculation
3
 only for skalnaya and poroshkovaya zones with high copper content total mineral resources of skalnaya and poroshkovaya are 463 and 52 mt respectively
4
  estimate prepared by srk consulting as at 01072011 prices ag  us13oz cu  220clb pb70clb zn  90clb lead and zinc are not included in gold equivalent 
calculation
appendices
annual report 2012 polymetal international plc 165 164 polymetal international plc annual report 2012
appendices
reserves and resources
as at 1 january 2013
continued abbreviations
agm annual general meeting
cis commonwealth of independent states
imn indigenous minorities of the north
jorc australasian joint ore reserves committee
jsc joint stock company
lbma london bullion market association
ngo nongovernmental organisation
pox pressure oxidation
units of measurements
gt gram per tonne
km kilometres
koz thousand ounces
kt thousand tonnes
ktpa thousand tonnes per annum
m metres
moz million ounces
mt million tonnes
mtpa million tonnes per annum
pp percentage points
t tonne 1000 kg
oz or oz troy ounce 311035 g
glossary of technical terms
assay  a chemical test performed on a sample  
of any material to determine the amount  
of valuable metals contained in the sample
ag silver
ageq silver equivalent
au gold
autoclave a lined stainlesssteel vessel in which a 
technological operation of pressure oxidation 
takes place
carboninleach 
or cil
 a technological operation in which slurry 
containing gold and silveris leached by  
cyanide in the presence of activated carbon 
gold is absorbed onto activated carbon in 
parallel with leaching
carboninpulp  
or cip
 means a technological operation in which slurry 
containing gold and silver is leached by cyanide 
initially without and subsequently in the presence 
of activated carbon gold absorption onto 
carbon starts only after preliminary leaching
concentrate a semiﬁnished product of mineral processing 
ﬂotation or gravity separation containing 
signiﬁcantly more value per unit of weight than 
ore and subject to further processing for the 
production of metals or other substances  
in ﬁnal useful form
cu copper
cutoff grade the minimum grade at which mineralised material 
can be economically mined and processed 
used in the calculation of ore reserves
cyanide leaching leaching with cyanide as the leaching agent
decline a permanent inclined underground tunnel leading 
from the surface to an ore body
dilution the share percentage of material below the 
cutoff grade that is extracted together and 
irretrievably mixed with ore during mining  
all other things being equal higher dilution leads 
to lower grade in ore mined
doré one of the traditional endproducts of a gold
silver mine an alloy containing 90 in sum of 
gold and silver as well as 10 of impurities
exploration activity ultimately aimed at discovery of ore 
reserves for exploitation consists of sample 
collection and analysis including 
reconnaissance geophysical and geochemical 
surveys trenching drilling etc
flotation a technological operation in which orebearing 
minerals are separated from gangue minerals  
in the slurry based on variance in the interaction 
of different minerals with water particles of 
valuable concentrate are carried upwards with  
froth and collected for further processing
grade means the relative amount of metal in ore 
expressed as grams per tonne for precious 
metals and as a percentage for most  
other metals
head grade the grade of ore coming into a processing plant
heap leach a technological operation in which crushed 
material is laid on a sloping impervious pad 
where it is leached by cyanide solution to 
dissolve gold andor silver metals are 
subsequently recovered from pregnant leach 
solution by cic or the merrillcrowe process
indicated 
resource 
means that part of a resource for which  
tonnage grade and content can be estimated 
with a reasonable level of conﬁdence it is based 
on exploration sampling and testing information 
gathered through appropriate techniques from 
locations such as outcrops trenches pits 
workings and drill holes the locations are  
too widely or inappropriately spaced to  
conﬁrm geological andor grade continuity  
but are spaced closely enough forcontinuity  
to be assumed
inferred resource means that part of a resource for which tonnage 
grade and content can be estimated with a low 
level of conﬁdence it is inferred from geological 
evidence and assumed but not veriﬁed 
geological andor grade continuity it is based  
on information gathered through appropriate 
techniques from locations such as outcrops 
trenches pits workings and drill holes which 
may be limited or of uncertain quality  
and reliability
inﬁll drilling a conventional method of detailed exploration on 
already deﬁned resource of reserve consisting  
of drilling on a denser grid to allow more precise 
estimation of ore body parameters and location
leaching the process of dissolving mineral values from 
solid into liquid phase of slurry
measured 
resource 
means that part of a resource for which tonnage 
densities shape physical characteristics grade 
and mineral content can be estimated with a 
high level of conﬁdence it is based on detailed 
and reliable exploration sampling and testing 
information gathered through appropriate 
techniques from locations such as outcrops 
trenches pits workings and drill holes  
the locations are spaced closely enough  
to conﬁrm geological and grade continuity
merrillcrowe 
process
a technological operation for extraction of gold 
andor silver after cyanide leaching in the ﬁrst 
step slurry containing gold andor silver is 
separated into liquid and solid phases by 
washing the solids off in countercurrent 
decantation thickeners in the second step 
pregnant leach solution liquid phase of slurry  
is ﬁltered to remove impurities and deaerated 
finally gold and silver are deposited onto the 
solid bed of claylike material where they replace 
zinc particles which pass into a solution 
merrillcrowe is preferentially used for  
silverrich ores
mill a mineral processing plant
mineralisation a rock containing valuable components  
not necessarily in the quantities sufﬁcient  
for economically justiﬁable extraction  
consists of ore minerals and gangue
openpittable amenable for economically feasible mining  
by openpit methods
openpit mine a mine that is entirely on surface also referred  
to as opencut or opencast mine
ore the part of mineralisation that can be mined  
and processed proﬁtably
ore body a spatially compact and geometrically  
connected location of ore
ore mined ore extracted from the ground for  
further processing
ore processed ore subjected to treatment in a mineral 
processing plant
ore stacked the ore stacked for heap leach operations
oxidised ore ore in which both ore minerals and gangue are 
fully or partially oxidised thus impacting its 
physical and chemical properties and inﬂuencing 
the choice of a processing technology
precipitate the semiﬁnished product of mineral processing 
by merrillcrowe process normally containing 
very high concentrations of silver andor gold
pox or pressure 
oxidation
a technological operation in which slurry is 
subjected to high pressure and high temperature 
in an autoclave with the goal to destroy sulphide 
particles enveloping gold particles and make 
slurry amenable to cyanide leaching
primary ore unoxidised ore
probable 
reserves
the economically mineable part of an indicated 
and in some cases measured resource which 
has a lower level of conﬁdence than proved 
reserves but is of sufﬁcient quality to serve  
as the basis for a decision on the development  
of the deposit
production the amount of pure precious metals measured 
in thousands of ounces for gold millions  
of ounces for silver and tonnes for copper 
produced following processing
proved reserves the economically mineable part of a measured 
resource which represents the highest 
conﬁdence category of reserve estimate  
the style of mineralisation or other factors  
could mean that proved reserves are not 
achievable in some deposits
reclamation the restoration of a site after mining or 
exploration activity is completed
recovery or 
recovery rate
the percentage of valuable metal in the ore  
that is recovered by metallurgical treatment  
in the ﬁnal or semiﬁnished product
refractory a characteristic of goldbearing ore denoting 
impossibility of recovering gold from it by 
conventional cyanide leaching
reserves the economically mineable part of a measured 
andor indicated mineral resource it takes into 
account mining dilution and losses appropriate 
assessments and studies have been carried out 
and include consideration of and modiﬁcation  
by realistically assumed mining metallurgical 
economic marketing legal environmental 
social and governmental factors these 
assessments demonstrate at the time of 
reporting that extraction could reasonably be 
justiﬁed reserves are subdivided in order of 
increasing conﬁdence into probable reserves 
and proved reserves
resources a concentration or occurrence of material of 
intrinsic economic interest in or on the earth’s 
crust in such form quality and quantity that  
there are reasonable prospects for eventual 
economic extraction the location quantity 
grade geological characteristics and continuity 
of resources are known estimated or interpreted 
from speciﬁc geological evidence and 
knowledge resources are subdivided in order 
of increasing geological conﬁdence into inferred 
indicated and measured categories
stockwork one of the types of mineralisation a complex 
system of structurally controlled or randomly 
oeirnted veins stockworks are common  
in many ore deposit types
stope a large underground excavation entirely within  
an ore body a unit of ore extraction
strike a horizontal extension of an ore body  
or mineralisation
stripping the mining of waste in an open pit mine
tailings part of the original feed of a mineral  
processing plant that is considered devoid  
of value after processing
underground 
development
excavation which is carried out to access ore 
and prepare it for extraction mining
vein a relatively narrow ore body with signiﬁcant dip 
and strike dimensions and sharply deﬁned 
boundaries
waste barren rock that must be mined and removed  
to access ore in a mine
appendices
annual report 2012 polymetal international plc 167 166 polymetal international plc annual report 2012
appendices
glossary as at 31 december 2012 the company’s issued share capital consisted of 383206204 ordinary shares of no par value  
the company does not hold any ordinary shares in treasury the ordinary shares reﬂect 100 of the total issued share capital  
of the company
substantial shareholdings as at 24 april 2013
shareholder beneﬁcial owner
number of
shares
percentage 
of issued 
share 
capital

nature 
of holding
pearlmoon limited mr petr kellner 79840437 2050 indirect 
powerboom investments limited mr alexander nesis 68497758 1759 indirect 
vitalbond limited ann capital management fund limited mr alexander mamut 38740784 995 indirect 
mbc development limited mr alexander mosionzhik 17000000 436 indirect 
staroak limited mr oleg shuliakovskii 16335275 419 indirect 
morgan stanley institutional securities group and global wealth management 16022245 411 indirect
registrar
computershare investor services jersey limited
queensway house
hilgrove street
st helier jersey je1 1es
channel islands
auditors
deloitte llp
2 new street square
london ec4a 3bx
united kingdom 
brokers
morgan stanley  co international plc
25 cabot square
london e14 4qa
united kingdom
canaccord genuity limited
88 wood street
london 
ec2v 7qr
united kingdom
legal counsel
jersey legal advisors to the company
carey olsen
47 esplanade
st helier
jersey je1 0bd
channel islands
english us and russian legal advisers to the company
freshﬁelds bruckhaus deringer llp
65 fleet street
london ec4y 1hs
united kingdom
freshﬁelds bruckhaus deringer llp
kadashevskaya nab 142
moscow 119017
russian federation
cypriot legal advisors to the company
mouaimis  mouaimis
1618 zinas kanther street
3035 limassol
cyprus 
advisers as to kazakh law to the company
grata law firm
104 mospanov str
registered ofﬁce of the company
ogier house
the esplanade
st helier
jersey je4 9wg
channel islands
tel 44 1534 504000
registered no 106196
company secretary
tatiana tchedaeva
media contacts   
college hill
leonid fink
tony friend
44 20 7457 2020
investor relations
polymetal international
maxim nazimok
evgenia onuschenko
elena revenko
7 812 313 5964 russia
44 20 7016 9503 uk
irpolymetalinternationalcom 
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appendices
shareholder information polymetal international plc
ogier house
the esplanade
st helier
jersey je4 9wg
channel islands
registered no 106196


Summary:
 business review 
chief executive’s qa
a conversation with  
the chief executive
q  what are the key challenges in 
respect of safety and responsible 
development – and how do you  
address them
while our inhouse safety performance was excellent –  
this was the second year in a row that we were able to  
record not only zero fatalities but also a continuing trend  
of reduced injury rates – we of course deeply regret the  
loss of one of our suppliers’ ships in the sea of okhotsk  
we are now taking measures to roll out our health and  
safety approach to our supplier network to address this risk  
in future our environmental and social performance remains 
fundamentally important to our sustainable growth and 
consequently a key area of focus for us we have made  
a positive impact in every region where we operate and 
continue to invest heavily in our environmental safety  
and social programmes
2010 2011 2012
059 063
19
lost time injury frequency rate ltifr
1
059
1
per one million hours worked
q  what are your key operational 
priorities for 2013
while we’re naturally focused on a complete range of 
operational activities we do have two signiﬁcant priorities – 
achieving our targets for operations at amursk pox and the 
completion and rampup of mayskoye these two objectives 
are prerequisite to achieving the 14 moz production target 
from our existing asset base in 2014 and to delivering on our 
estimate of 12 moz in 2013 we’re conﬁdent that both these 
priorities will be achieved during the coming year 
q  a production target of 14 moz 
seems now achievable – how do  
you see strategic development  
of the company beyond 2014
although we have yet to deliver the 14 moz we are already 
looking at the next generation of assets to ensure growth 
beyond 2014 there are key decisions to be made in respect  
of this third generation of assets including the expansion  
of albazino and development of the two most signiﬁcant 
greenﬁeld targets kutyn and svetloye albazino is the nearest 
target and represents an excellent example of our exploration 
success all three of these projects are subject to ongoing 
evaluation and the relevant development decisions will be 
made by the end of 2013 – beginning of 2014
q  how has the company changed 
since moving to london’s  
main market
while we continue to go from strength to strength operationally 
a key area of development has been the compliance with wider 
international standards of corporate governance clearly there 
is a far greater amount of attention on polymetal from a far 
greater range of stakeholders commentators and press 
regarding the company’s performance as well as more  
focus on governance and sustainability from an expanded  
and more demanding investor base we are therefore 
continuing to focus strongly on governance transparency  
and stakeholder relations in general though we are proud  
of our record of delivering on our promises as this has  
enabled us to outperform both the market and our peer  
group in terms of total shareholder return and to deliver  
real value to our shareholders
q  what would you describe as  
your main achievements and main 
disappointments during the year
i’m pleased that our achievements have strongly outweighed 
any disappointments so that while amursk pox – despite 
achieving its rampup and initial production targets – did not 
deliver fully on target the company as a whole achieved an 
impressive 31 growth in production the delay in full rampup 
of the amursk pox does not undermine our conﬁdence for the 
future and this conﬁdence is further boosted by the great 
progress we have made in other areas such as the success  
of our growth projects at omolon and albazino and signiﬁcant 
exploration success at both brownﬁeld and greenﬁeld projects
ma activity was limited although a number of relatively small 
acquisitions may offer additional expansion opportunities – in 
particular the new platinum project and the olcha brownﬁeld 
expansion at dukat
“ we are proud of our record of delivering  
on our promises as this has enabled us  
to outperform both the market and our 
peer group in terms of total shareholder  
return and to deliver real value to  
our shareholders”
 
 vitaly nesis
 chief executive
q  how are these achievements and 
areas for further focus impacting  
on your ﬁnancial performance
the fact that we achieved production growth ahead of 
expectations along with our stable performance at mature 
mines meant that we also delivered improved cost efﬁciency 
and proﬁtability levels including adjusted ebitda growth of 
47 and stable total cash costs in addition the completion of 
some major growth projects combined with a strong operating 
cash ﬂow resulted in free cash ﬂow generation a comfortable 
level of debt and solid proﬁtability importantly this also 
enabled us to implement our industryleading dividend policy 
with a sizeable us050 per share special dividend
left operations at the voro open pit
top right regular equipment checks at the khakanja plant
bottom right the area adjacent to our mayskoye site in chukotka
business review
annual report 2012 polymetal international plc 13 12 polymetal international plc annual report 2012 business review
business model polymetal’s business model
performing in line  
with our business model
success in our market depends to a large 
extent on our ability to increase our resource 
base continually develop systems that 
increase production efﬁciency and improve 
grades our business model has therefore 
been developed to ensure that we have the 
best methodology and approach to address 
these issues and ultimately to ensure that 
we continue to deliver sustainable value 
area of focus what we said what we are doing the future
focusing on  
highgrade assets 
22
read more about our assets on 2259
we have a preference for openpit 
mining unless higher grades justify 
underground development grades  
and mining conditions are the key cost 
factors that drive return on invested 
capital in the precious metals industry 
by setting appropriate thresholds  
on head grades and focusing on 
openpit mines we are achieving  
better returns and lower risks from  
our project portfolio
the newest mines which were ramped 
up andor are under construction –  
most importantly omolon hub albazino 
and mayskoye – are all characterised  
by high reserve and resource grades 
which reduces the project risk and 
ensures good cost levels despite 
complex logistics and weather 
conditions further grade control 
remains a top priority at our existing 
operations thus supporting intense 
management focus on cost control
our focus on grade is also embedded 
in our thresholds and targets set for 
assessing organic and inorganic growth 
opportunities in order to support 
company’s grade proﬁle going forward 
at the operational level we are 
continuing to implement various 
initiatives both at mine planning and 
processing level to ensure continuous 
grade and recovery improvements
leveraging our  
hubbased system
6
read more about our hubs on pages 6 2851
creation of centralised facilities for the 
treatment of materials from different 
sources allows us to minimise 
processing and logistics costs and 
achieve economies of scale
omolon and khakanja are both good 
examples of asset transformation 
supported by the hub concept  
both demonstrate solid performance 
improvement in 2012 in terms of 
production growth and cost reduction 
driven by addition of highgrade ore 
sources from medium and smallsized 
satellite deposits
we are continuing to invest in 
brownﬁeld exploration and searching 
for synergistic ma targets which  
could extend the life of existing 
operations andor improve grade 
proﬁle with acquisition of olcha  
in 2013 being the latest example
investing in exploration
60
read more on pages 20 24 60
this will allow us to ensure a cost
effective increase in our reserve  
base which is in turn the key source  
of longterm organic growth
our exploration efforts in 2012 have 
resulted in meaningful growth in 
reserves and resources without 
compromising the grade new resource 
additions at albazino are the largest 
success of 2012
greenﬁeld and brownﬁeld exploration 
will continue to serve as the principal 
source of future growth assets some  
of which albazino expansion  
kutyn and svetloye have already  
been identiﬁed
maintaining exemplary 
governance
88
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we strive to ensure proper steering  
of the company accountability to 
shareholders and attention to other 
stakeholders’ interests
good corporate governance and 
listening to our shareholders remains  
a top priority of polymetal board and 
executive management with key  
2012 developments including new 
progressive dividend policy and 
adopting best practices in executive 
remuneration health and safety  
as well as environmental and social 
performance are also embedded  
in the management’s kpis and  
remain an area of focus
going forward the board will 
continuously focus on compliance  
with uk best practice in corporate and 
on further improvement in health and 
safety record as well as on maintaining 
a robust system of internal control
delivering
sustainable
value
maintaining exemplary governance
maintaining exemplary governance
focusing on highgrade assets
investing in exploration   
leveraging our hubbased system
business philosophy
what we like and do
  high return on invested capital and meaningful dividends
  brownﬁeld projects based on the concept of  
processing hubs capital light simple predictable
  highgrade mediumsize projects
  synergydriven ma
what we don’t like and don’t do
  low return on capital even at low total cash costs  
and symbolic dividends
   greenﬁeld projects expensive complex risky
  very large lowgrade projects
 ma driven by desire to grow production
 delivering sustainable value 
three elements form the substance  
of our business model a focus  
on highgrade assets support  
and expansion of our hubbased 
operating system and investment  
in exploration – underpinned by a 
commitment to strong governance
business review
annual report 2012 polymetal international plc 15 14 polymetal international plc annual report 2012