annual report 2014
wwwpolymetalinternationalcom
sustaining 
growth and  
creating value
polymetal international plc annual report 2014 commitment
to responsible
development
focusing on highgrade assets
investing in exploration
leveraging our hubbased system
contents
polymetal is a leading precious 
metals mining group with a 
robust track record of strong 
operational performance and 
consistent strategic delivery
in line with our strategy and 
operational objectives we have 
made further significant progress 
this year in particular with  
record production results and 
the kyzyl acquisition we are 
confident that this new asset will 
contribute strongly towards our 
aims of becoming the leading 
precious metals producer  
in russia and the cis and 
delivering sustainable value  
to all our stakeholders
  
kazakhstan
lake
balkhash
bakyrchik
deposit 
bolshevik 
deposit
varvara
china
ayaguz
balkhash
lepsy
zaysan
kostanay
oskemen 
ustkamenogorsk semey
pavlodar
karagandy
almaty
uzbekistan
russia 
russia 
caspian sea
kyzyl
project
strategic report
polymetal at a glance 2
where we operate 4
chairman’s qa 6
group chief executive officer’s review 8
business model 16
strategy 17
performance highlights 20
market overview 22
operating review 24
sustainability 40
financial review 48
risks and risk management 60
governance
board of directors 66
senior management 67
corporate governance 68
audit and risk committee report 73
remuneration report 77
directors’ report 92
financial statements
directors’ responsibility statement 94
independent auditor’s report 95
consolidated income statement 98
consolidated statement of  
comprehensive income 98
consolidated balance sheet 99
consolidated statement of cash flows 100
consolidated statement of changes in equity 101
notes to the consolidated  
financial statements 102
appendices
operational statistics 142
reserves and resources 149
glossary 155
shareholder information 158
2010 2011 2012 2013 2014
gold equivalent production koz
753
810
1063
1282
1431
free cash flow
usm
122
2012 2013 2014
138 138
306
kyzyl project 
our latest acquisition the kyzyl gold project  
in kazakhstan
pages 10 36
5 year production growth
average annual production growth of 17
business model
page 16 
strong  
performance
page 14 
financial review
page 4859 
governance financial statements appendices
 annual report 2014 polymetal international plc 1
strategic report
maintaining our  
growth strategy we continue to deliver consistently 
robust operating performance
at a glance
what sets us apart
2014 highlights
our gold equivalent ge production
1
 
was 143 moz up by 12 this 
exceeded both our original production 
guidance of 13 moz of ge by 10 and 
the updated guidance of 1365 moz  
by 5 this was largely due to the  
full rampup of mayskoye and strong 
operational delivery at dukat 
and omolon
we acquired the kyzyl gold project  
in kazakhstan with gold reserves  
of 67 moz at 75 gt jorc this has 
increased polymetal’s gold equivalent 
reserves by 50 the project has  
a mine life of at least 20 years with 
substantial exploration potential
increased free cash flow generation 
enabled us to go beyond the regular 
dividend and pay a special dividend  
of us020 per ordinary share 
approximately us84 million in total
1
 gold equivalent is calculated based on 160 agau  
and 51 cuau conversion ratios
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 including addition of treatment and refinery charges related to concentrate offtake 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
2
 the company defines adjusted ebitda a nonifrs measure as profit for the period adjusted for depreciation expenses rehabilitation expenses write downs of inventory to net realisable 
value sharebased compensation additional mining tax vat penalties and accrued interest income on disposal of subsidiaries bargain purchase gains foreign exchange gainslosses 
changes in fair value of derivatives changes in fair value of contingent consideration finance income finance costs and income tax expenses adjusted ebitda margin is adjusted ebitda 
divided by revenue see note 6 to the financial statements
3
 free cash flow is defined as total operating cash flows less investing cash flow 2014 excluding cash payment for the kyzyl acquisition
4
 mineral resources and ore reserves are estimated in accordance with the jorc code 2012 mineral resources are additional to ore reserves
5
 average headcount for the period
key financial figures
 1 690 usm
revenue 
2013 us1707 million
634 usge oz
total cash cost
1
 
2013 us745ge oz
893 usge oz
allin sustaining cash cost 
2013 us1086 ge oz
685 usm
adjusted ebitda
2
 – total 
2013 us598 million
306 usm
free cash flow
3
 
2013 us138 million
reserves
216 moz
ore reserves ge oz
2013 133 moz
43 gt
average reserve grade ge gt 
2013 37 ge gt
production
 1 43 1 koz
gold equivalent 
2013 1282 koz
  12
increase of gold equivalent 
production over 2013
resources
4
 14  6 moz
mineral resources ge oz
2013 167 ge moz
42 gt
average resource grade ge gt
2013 37 ge gt
workforce
8853
employees
5
 
2013 9232
asset portfolio
8624 km
2
total licence area
2013 10650 km
2
8
mining operations
russia
dukat
omolon
albazino
mayskoye
voro
khakanja
kazakhstan
varvara
kyzyl
our commitment  
to shareholder value  
creation is underpinned 
by a preference for  
highgrade assets  
a strong operating and 
project delivery record 
and capital discipline
highgrade assets 
 
our focus on grade and a preference  
for openpit mines are key factors in 
maintaining lower operating costs and 
reducing perounce capital expenditure 
proven operating track  
record delivering and 
exceeding expectations
our track record speaks for itself for  
the third consecutive year we beat our 
production guidance despite difficult 
trading conditions our gold equivalent 
ge production for 2014 was 143 moz 
an increase of 12 exceeding both our 
original production guidance of 13 moz 
of ge by 10 and an updated guidance 
of 1365 moz by 5
capital discipline  
strong free cash flow  
and substantial dividends
our investment and capital structure 
decisions are based on a strong culture 
of capital discipline our project 
development and acquisition decisions 
are only approved if they are able to 
deliver the required return on capital  
the free cash flow generated allows  
us to deliver a meaningful dividend 
payout while maintaining a comfortable 
leverage level
pipeline of quality  
growth projects 
growth is essential to the longterm  
value of the mining business with a 
major construction programme within 
existing assets now completed we are 
concentrating on our next growth phase 
with the development of kyzyl svetloye 
and our platinum group assets our latest 
acquisition kyzyl is a worldclass asset 
and one of the largest untapped 
highgrade gold deposits globally
● gold 66
● silver 33
● copper 1
production structure ge 
gold equivalent production
koz
2012 2013 2014
1431
1063
1282
strategic report governance financial statements appendices
2 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 3   
china
north 
korea
south 
korea
japan
 mongolia 
uzbekistan
kyrgyzstan
tajikistan
turkmenistan
ukraine
belarus
lithuania
latvia
georgia
armenia
azerbaijan
russia 
kazakhstan
china
moscow 
st petersburg 
kaliningrad 
magadan
 ekaterinburg
oskemen
vanino
pevek
khabarovsk
semcha
svetloye
okhotsk
kostanay 
kyzyl
where we operate
we have a growing portfolio of  
highquality assets supported  
by a strong exploration programme
varvara
strong operations in kazakhstan 
delivering a stable contribution 
42 mtpa
float  leach
operating mine 
varvara
key exploration project 
tarutin
kyzyl project
developing a worldclass asset 
bakyrchik and bolshevik deposits
67 moz
gold reserves
7 5 gt au
 average reserve grade
voro
sustaining high performance  
and margins 
950 ktpa
cip
900 ktpa
hl
operating mine  
voro
key exploration project  
north kaluga
mayskoye
bringing our newest  
mine up to speed
850 ktpa
concentrator
operating mine  
mayskoye
khakanja hub
focusing on minelife extension
600 ktpa
merrillcrowe plant 
operating mines 
khakanja avlayakan ozerny
development project
svetloye
albazino
extending lifeofmine by adding 
underground reserves
16 mtpa
concentrator 
amursk pox hub
unique processing facility  
for refractory concentrates
500 tpd
amursk pox plant processing 
concentrates from albazino  
and mayskoye
dukat hub
targeting reliable  
resourcetoreserve conversion
16 mtpa
dukat concentrator
400 ktpa
lunnoye merrillcrowe plant
operating mines
dukat goltsovoye lunnoye 
arylakh
development projects
olcha
key exploration project
perevalny
map key
hub
operating mine
development project
head office
 citytown
seaport
 
omolon hub
transitioning underground
850 ktpa
kubaka cip and merrillcrowe
operating mines
birkachan sopka tsokol dalneye
development projects
oroch burgali
key exploration project
yolochka
strategic report governance financial statements appendices
4 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 5 bobby godsell talks about polymetal’s 
performance economic environment 
and prospects
chairman’s qa 
i am delighted to be able 
to report a very robust  
set of financial results  
for our shareholders
what were the key challenges 
for the company in 2014
2014 has been a tough year for mining 
companies worldwide slowing growth  
in key developing economies especially 
china saw mineral prices decline the 
two minerals that are key to value creation 
in polymetal gold and silver declined by 
10 and 20 respectively mining 
companies battled to control costs bring 
new projects in on time and on budget 
and maintain let alone grow production 
all of this has depressed capital growth 
as measured by share prices and put 
pressure on dividends
in addition to these general challenges 
polymetal has faced the investor 
headwinds of the geopolitical tensions  
in both ukraine and the european union
in this tough context i am therefore 
delighted to report a robust set of results 
for this company
in 2014 polymetal increased its gold 
equivalent ge production by 12  
to 14 million ounces 10 above our 
guidance adjusted ebitda grew by 15 
to us685 million in the meantime the 
company paid its shareholders significant 
dividends the company’s dividend yield 
over the last 3 years has averaged 4
how did polymetal achieve  
this given such difficult 
circumstances
the company’s focus has continued to 
be building highgrade assets shaped 
around hubbased processing facilities 
this has enabled us to better manage 
costs in this low and declining 
price environment
this has also helped us to grow 
production combined with strong cash 
generation the impact of declining gold 
and silver prices has been more than 
offset by currency devaluations in the two 
countries in which we operate russia 
and kazakhstan
we have also been able this year to 
acquire a major new source of future 
production in the kyzyl gold project in 
kazakhstan this has boosted our total 
reserves by 50 and added a single 
highgrade property with a life of 20 years 
to our asset base
how do you ensure the 
effective operation of the  
board and good governance
our board combines effective 
representation of strategic investors with 
a strong and majority representation of 
fully independent nonexecutive board 
members diverse both in terms of 
professional experience and nationality 
the board both aspires to and believes 
that it achieves global best practice in 
terms of corporate governance 
this is an active board with a total of  
ten board meetings during the year under 
review ten meetings of the three board 
committees audit and risk remuneration 
and nomination have also taken place
besides its terms of reference and 
corporate governance code defined 
regular duties the board has been 
particularly focused on ensuring the 
company anticipates and adjusts  
to market circumstances responds 
appropriately to the geopolitical 
challenges that have arisen in the areas  
in which it operates and continues to 
offer its shareholders meaningful rewards
the board visited the kyzyl project at  
a relatively early stage of the transaction 
this project continues to be a focus of 
board oversight at every meeting
what in your view makes 
polymetal different from  
its competitors
gold mining companies have in general 
produced disappointing results for their 
owners in recent years costs have risen 
faster than prices and development 
projects have disappointed companies 
have failed to grow either the value or 
volume side of their wealth creation 
equation regional conflicts and a 
growing tide of resource nationalism  
have dramatically heightened the risk 
character of many jurisdictions
in this context polymetal has grown 
production controlled costs and been 
able to pay dividends to its shareholders 
which totalled us173 million for the year 
under review it has again demonstrated 
its ability to create wealth for its owners 
even in a depressed commodity cycle 
and in tough geopolitical circumstances
what are the objectives and 
challenges for polymetal in the 
coming year
polymetal can neither determine the 
pricing of the metals it produces nor  
the geopolitical circumstances of the 
jurisdictions in which it operates  
our challenge is however to produce 
strong operational results generate 
strong cash flow and continue to pay  
our shareholders significant dividends
a particular focus in the coming year will 
be the development of a detailed plan for 
the development of the company’s new 
long life asset in kyzyl in kazakhstan
58
dividend payout ratio in 2014
based on underlying net earnings
our ability to  
deliver cash flow to 
shareholders whilst 
maintaining production 
growth is surely the 
best evidence that we 
can give to the market 
that our strategy works
most of our assets  
have delivered above  
the original plan for  
the year
strategic report governance financial statements appendices
6 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 7 a proven strategy and business  
model that continue to deliver  
growth and value
group chief executive officer’s review
weak commodity prices 
persisted with debilitating 
outcomes for many 
polymetal however 
bucked the market  
trends and delivered  
a strong set of results
if 2013 was a testing time for gold miners 
then 2014 will be remembered as the  
year when commodityprice weakness 
persisted with material consequences 
within the global mining industry many 
companies were forced to make cuts in 
exploration and development spending as 
well as operating and capital expenditure
for polymetal however it was a different 
story we continued to deliver on our 
promises and demonstrated resilience  
to both current market trends and 
geopolitical challenges
outstanding operating 
performance
for the third consecutive year we  
beat our production guidance despite 
challenging market conditions our gold 
equivalent ge production was 143 moz 
2013 128 moz up by 12 this 
exceeded both our original production 
guidance of 13 moz of ge by 10  
and the updated guidance of 1365 moz  
by 5
annual gold production for the year 
increased by 17 to 945 koz 
2013 805 koz annual silver production 
rose by 5 to 287 moz 2013 272 moz 
gold production now accounts for  
over twothirds of our total revenue –  
69 up from 63 in 2013
the full rampup of our mayskoye 
underground mine and strong operational 
delivery at the dukat and omolon hubs 
were the key drivers in helping us achieve 
these record figures for the business  
at mayskoye the total gold produced 
during 2014 increased almost threefold 
to 1426 koz 2013 484 koz due  
to a full year of design throughput  
and recovery we also commenced 
concentrate processing at the amursk 
pressure oxidation pox plant while  
sales of concentrate to china more than 
doubled our stateoftheart amursk 
pox plant performed in line with 
expectations and we exceeded design 
recoveries for both albazino and 
mayskoye concentrates
growth by strategic acquisition
our highgrade assets and the 
completion of a major construction cycle 
in advance of the drop in the price of gold 
put us in a unique position in the sector 
we entered the year with a strong cost 
and operating profile and comfortable 
leverage the turn of the commodities 
cycle created a window of opportunity  
for polymetal and allowed us to invest  
in an exciting growth project kyzyl
located in a traditional mining region  
with good infrastructure in northeastern 
kazakhstan kyzyl is ready for fasttrack 
development the project exactly matches 
our strategic target characteristics a 
large highgrade asset with a clear path 
to production and cash flow generation 
which leverages polymetal’s core 
strengths in selective mining and 
refractory ore processing  
as a result of the acquisition our gold 
equivalent reserves increased by about 
50 the project has a mine life of at 
least 20 years with substantial exploration 
potential allowing us to deliver significant 
longterm shareholder value this 
acquisition also leverages our business 
presence in kazakhstan where we have 
been operating successfully since 2009
with all our production assets operating 
stably our main focus has shifted  
to delivering growth post2017 we  
are concentrating on kyzyl and other 
development projects svetloye where 
construction will begin later this year with 
a view to production starting in q3 2017  
and our greenfield pgm platinum group 
metals exploration projects
capital discipline delivers returns
on the back of a very successful 
production year polymetal was  
also able to deliver a solid financial 
performance due in part to the current 
macroeconomic environment in russia 
the devaluation of the rouble against  
the us dollar and the twofold drop  
in the price of oil were significant factors 
in bringing down operating costs across 
the business and the corresponding 
increase in free cash flow generation
our adjusted ebitda increased by 15  
to us685 million while preacquisition 
free cash flow more than doubled to 
us306 million the underlying return  
on equity excluding noncash foreign 
exchange losses and impairments 
increased from 9 in 2013 to 21 in 2014 
this has allowed us to offer a substantial 
58 dividend payout in the reporting year 
while maintaining a comfortable leverage 
ratio of 182x net debtebitda
our commitment to capital discipline  
has been – and will remain – central  
to our ability to deliver such a dynamic 
financial performance even after a major 
investment like the kyzyl acquisition  
the company is able to continue paying 
regular dividends and declare a special 
dividend while still maintaining 
comfortable leverage levels
employee safety and  
wellbeing are paramount
we are saddened to report the loss of 
three colleagues during 2014 and also 
one workplace fatality at a contractor’s 
operation the increased fatality rate  
is of great concern at both board  
and executive management level  
our investigations show that the lapse  
in safety performance was in part due  
to the increased scope of underground 
mining in complex geotechnical 
conditions at these operations
it is vital that we significantly reduce  
risks and improve health and safety 
performance during the year ahead 
aiming for zero fatalities in 2015 we have 
already launched new risk assessment 
systems and the implementation of 
additional measures to ensure proper 
enforcement of existing safety standards 
and management procedures is under 
way we are also actively reinforcing  
the need for individual responsibility  
for personal safety and risk awareness 
across our operating mines
we continue to support the wellbeing  
of our employees and communities  
in the current complex macroeconomic 
environment in russia we are mindful of 
the need to take account of the increase 
in consumer prices and the inevitable 
impact this has on our workforce  
we will be monitoring the situation  
and providing salary increases  
to match the rising inflation levels
looking to the future
at kyzyl initial exploration and testing  
is already providing more clarity and 
comfort regarding the chosen project 
development route the pilot metallurgical 
testing confirmed the viability of ore 
flotation to concentrate and signals the 
potential to improve on the parameters 
achieved in previous testing the 
decommissioning of old infrastructure 
site clearing and various licencing 
applications – including environmental 
and social impact assessments –  
are all ongoing we have successfully 
completed preliminary public 
consultations with the bakyrchik 
community the full feasibility study  
for kyzyl is due to be published by the 
end of 2015 with the start of fullscale 
construction in 2016
our operating mines are set to deliver  
on our annual production guidance of 
135 moz of gold equivalent for 2015  
with current guidance for 2016 set at the 
same level our financial performance will 
inevitably be influenced by the rouble 
devaluation and the drop in oil prices 
this will support our cost performance 
and cash flow generation despite being 
partially offset by rising inflation 
during 2015
with that i am confident in our outlook  
for polymetal in 2015 we are committed 
to delivering value to our shareholders 
through meaningful dividend payments  
in the current market environment while 
preparing the company for the next 
growth stage
vitaly nesis
group chief executive officer
30 march 2015
openpit outline of the kyzyl project 
893 usge oz
allin sustaining cash costs in 2014 
18
306 usm
free cash flow for 2014  
122
we delivered  
on our promises  
and demonstrated 
resilience to current 
market trends
strategic report governance financial statements appendices
8 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 9   
kazakhstan
lake
balkhash
bakyrchik
deposit 
bolshevik 
deposit
varvara
china
ayaguz
balkhash
lepsy
zaysan
kostanay
oskemen 
ustkamenogorsk
semey
pavlodar
karagandy
almaty
uzbekistan
russia 
russia 
caspian sea
kyzyl
project
strategic expansion and growth through
a selective acquisition strategy 
designed to increase our resource 
base for the long term
the successful varvara deposit was polymetal’s  
first investment in kazakhstan
significant new reserves
the acquisition provided an excellent 
opportunity for polymetal to significantly grow 
its reserve base with a highgrade gold deposit 
in a wellknown jurisdiction for the company
kyzyl is ready for fasttrack development  
and increases polymetal’s gold equivalent 
reserves by about 50 the project features 
the large highgrade bakyrchik property 
which contains 67 moz of gold at 75 gt 
jorc and based on existing reserves  
a mine life of at least 20 years there is also  
a significant exploration upside
processing competence
a key element behind the kyzyl acquisition 
strategy was the opportunity it presented for 
polymetal to take advantage of its process 
technology expertise polymetal expects  
to capitalise on its strengths in pressure 
oxidation which will enable the company to 
access the double refractory ores at the site 
and a strong track record of refractory gold 
trading with thirdparty offtakers
timeline
we expect to have the permits and revised 
feasibility study for kyzyl completed by the 
fourth quarter of 2015 we will be looking to 
start active construction sometime in the 
spring of 2016 the goal is to then produce 
the first concentrate in the third quarter of 
2018 before we ramp up to full capacity  
in 2019
to fund construction we will look at securing 
a project financing deal or use existing bank 
arrangements with the equity component  
to be sourced from existing operational  
cash flows
growing kazakh portfolio
polymetal’s footprint in kazakhstan where  
it is one of the only foreignbased companies 
mining for gold takes a major leap forward 
with the acquisition of the kyzyl project
we first entered the country in 2009 through 
the acquisition of the varvara project which 
has since been developed into an openpit 
operation that features a modern 42 mtpa 
capacity processing plant and produced 
106 koz of gold equivalent in 2014
our commitment to establishing an 
extensive pipeline of growth projects 
has continued with the acquisition  
of the kyzyl gold project based in 
one of polymetal’s core jurisdictions 
kazakhstan kyzyl is set to become 
a priority development project  
for our company
strategic rationale for the deal
large highgrade reserves
•	 mineral reserves 67 moz of gold  
at 75 gt jorc
•	 expected production start in 2018
•	 expected annual gold production  
of 325375 koz
significant exploration upside
•	 substantial exploration potential 
through resourcetoreserve 
conversion
•	 resources additional to the 
reserves of 38 moz of gold at 
69 gt jorc
conventional mining
•	 initial development via openpit 
mining up to 10 years of production
•	 cutandfill with consolidated backfill 
followed by underground mining
refractory competency
•	 leverages polymetal’s core 
competencies in pressure oxidation 
pox processing and refractory 
gold concentrate trading
•	 concentrate will initially be sold  
to offtakers
favourable location within 
familiar jurisdiction
•	 wellunderstood and 
straightforward operating 
environment – a country in  
which we have successfully  
operated since 2009
•	 excellent infrastructure
 16
reserve grade increase
driven by the kyzyl acquisition  
and supporting our preference  
for highgrade assets
matching our strategy
strategic focus
the acquisition is consistent with the 
company’s longstanding strategy to target 
highquality lowrisk assets with large 
reserves and high grades
our company will have the opportunity to 
leverage its competitive strengths in pressure 
oxidation and refractory gold concentrate 
trading once kyzyl reaches production
kyzyl is located within a traditional mining 
region in northeastern kazakhstan 750 km 
east of the capital city astana and 75 km west  
of oskemen a key mining and metallurgical 
industry centre this location provides 
polymetal with good access to established 
infrastructure including power and rail
map key
operating mines
kyzyl project
 town
rail connection
airport
railway
 
strategic report governance financial statements appendices
10 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 11 strategic expansion and growth through
focusing on highgrade assets  
a distinctive value driver for polymetal
strategic report financial statements governance appendices
albazino
mayskoye
we are consistently building  
a portfolio of highgrade assets 
despite grade erosion for the  
global gold mining sector as a 
whole this allows us to achieve 
superior investment returns and 
provides resilience to adverse 
market movements
43 gt
average reserve grade
one of the highest in the sector and 
central to our sustainable growth
our average grade in ore 
processed in 2014 is in line 
with reserve grade and  
was 47 gt ge 
hochschild
acacia
polymetal
randgold
gold fields
centerra
agnico eagle 
pan american silver
polyus gold
eldorado gold
barrick gold
goldcorp
anglogold
iamgold
newmont
yamana
newcrest
nordgold
coeur d’alene
kinross
new gold
63
51
43
36
30
28
24
23
22
15
15
14
13
13
12
11
11
10
10
average reserve grade
1
 gt ge
08
07
1
  source company data gold silver copper proved and probable reserves as of 01012015 with further updates for svetloye and kyzyl peers ge at 601 ag ozau oz and 51 cu mtau oz 
conversion ratios polymetal ge at 6481 ag ozau oz in accordance with the jorc code 2012
2
 dukat’s total cash cost per gold equivalent was us621ge oz
reserves 35 ge moz reserves 13 ge moz reserves 27 ge moz reserves 18 ge moz
dukat omolon albazino mayskoye
7 7 gt
average reserve grade 
44 gt
average reserve grade
51 gt
average reserve grade
85 gt
average reserve grade
87 usse oz
2
total cash cost
570 usge oz
total cash cost
625 usge oz
total cash cost
966 usge oz
total cash cost
109 usse oz
allin sustaining cash cost
722 usge oz
allin sustaining cash cost
901 usge oz
allin sustaining cash cost
1134 usge oz
allin sustaining cash cost
reserves 12 ge moz reserves 17 ge moz reserves 10 ge moz reserves 67 ge moz
khakanja voro varvara kyzyl
35 gt
average reserve grade 
29 gt
average reserve grade
13 gt
average reserve grade
7 5 gt
average reserve grade
704 usge oz
total cash cost
376 usge oz
total cash cost
705 usge oz
total cash cost
69 gt
average resource grade
909 usge oz
allin sustaining cash cost
515 usge oz
allin sustaining cash cost
1 049 usge oz
allin sustaining cash cost
strategic report governance financial statements appendices
12 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 13 strategic expansion and growth through
a strong record of consistently 
resilient operating performance
strategic report financial statements governance appendices
00 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 00
for a third consecutive year we  
are beating our original production 
guidance and delivering doubledigit 
output growth this has built into our 
track record of robust and resilient 
operating performance under 
challenging market conditions
 
underpinned by highgrade 
solid operating performance 
and a weaker rouble and 
tenge total cash costs  
in 2014 declined by 15  
to us634 per ge oz
 1 43 moz
gold equivalent production
a 12 increase exceeding  
production guidance
2010 2011 2012 2013 2014
average gold equivalent grade processed gt
38 38
44
46
47
2010 2011 2012 2013 2014
gold equivalent production koz
753
810
1063
1282
1431
2010 2011 2012 2013 2014
ore processed kt
7845
8821
9809
10749
11300
all operating assets at full capacity
in 2014 all of our operating assets including the newest 
albazino mayskoye and flagship amursk pox plant operated 
at design capacity and recovery levels ensuring robust 
production growth and exceeding plans for the year
strategic report governance financial statements appendices
14 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 15 strategy
a proven model delivering  
sustainable value
business model
maintaining exemplary governance
driving operational
excellence
delivering
sustainable
value
commitment
to responsible
development
applying strong capital discipline
focusing on highgrade assets
investing in exploration
leveraging our hubbased system
a clear and consistent 
basis for longterm growth
the consistent implementation of our strategy  
is at the heart of our successful track record
underpinned by a commitment 
to good corporate governance  
our business model is the  
key to our success and  
ultimately enables us to  
deliver sustainable value  
to our stakeholders
maintaining exemplary 
governance
we are committed to upholding good 
governance throughout our operations 
and in our interactions towards and  
on behalf of all our stakeholders 
including communities employees  
and government bodies
applying strong capital 
discipline
capital discipline is the key characteristic 
of our investment and funding policy 
informing the decisionmaking process 
across every aspect of the business  
in order to deliver healthy dividend 
streams for our shareholders
driving operational excellence
we continue to focus on achieving 
improved operational excellence in mining 
and processing technologies which  
in turn has enabled us to commence  
the development of the third generation  
of highquality assets
investing in exploration
investment in both greenfield and 
nearmine exploration provides us with  
a costeffective increase in our reserve 
base and along with successful 
acquisitions is the key source of  
our longterm growth
leveraging our hubbased system
our centralised hubbased system 
handles ores from different sources 
achieving economies of scale by 
minimising processing and logistics 
costs as well as capital spending per 
ounce this facilitates production at 
otherwise uneconomical medium  
and smallsized nearplant deposits
focusing on highgrade assets
return on investment in the precious 
metals industry is reliant on grades and 
mining conditions we achieve better 
returns and lower risks from our project 
portfolio by setting appropriate thresholds 
on head grades and largely focusing  
on openpit mines
delivering sustainable value
our business model brings together our 
multifaceted capabilities for increasing 
our resource base and improving both 
production efficiency and grades in order 
to increase profitability and free cash flow 
to deliver value to our shareholders
01
ensure robust  
operating and financial 
performance at our 
operating mines 
focus on full capacity utilisation and 
robust cost performance of our operating 
mines by driving continued operating 
improvement extend our lifeofmine  
by investing in nearmine exploration
02
develop third generation  
growth projects 
 
 
with the second generation growth 
assets omolon albazino amursk pox  
and mayskoye completed and fully 
operational we have now commenced 
the development of the third generation  
of highquality assets the highlight of the 
portfolio is the recently acquired kyzyl 
project which along with the svetloye 
project will be the key source of 
production growth from 2018
05
maintain high standards 
of corporate governance 
and sustainable 
development 
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  
our goal is also to safeguard the health 
and safety of our staff in line with industry 
best practice we are compliant with  
the provisions of the uk corporate 
governance code the group is also  
a participant in the un global compact  
a recognised international standard for 
sustainable development
04
remain opportunistic  
in the ma arena 
combined with own 
exploration efforts 
pursue further ‘bolton’ or other 
synergistic acquisition opportunities with 
a view to leveraging processing capacity 
infrastructure and operational expertise  
at our existing processing facilities
03
maintain capital 
discipline to deliver 
superior free cash  
flow and substantial 
dividends
deliver superior strong free cash  
flow by focusing on return on capital in 
investment decisions and maintaining 
safe leverage levels deliver the value 
created to shareholders through stable 
and substantial dividend payments
see how we
have implemented
this strategy
in 2014 on the 
next pages
strategic report governance financial statements appendices
16 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 17 strategy
we have a disciplined  
and measurable approach 
to ensuring that each 
element of our strategy  
is properly implemented 
this is reflected in the 
clear kpis that we use to 
measure progress against 
our strategy and to which 
the remuneration of the 
top management is linked
delivering reliable growth 
in stakeholder value
01
ensure robust operating and 
financial performance at our 
operating mines
02
develop third generation 
growth projects 
03
maintain capital discipline to 
deliver superior free cash flow 
and substantial dividends
04
remain opportunistic on  
the ma arena combined  
with own exploration efforts 
05
maintain high standards of 
corporate governance and 
sustainable development 
risks risks risks risks risks
production risk
market risk
logistic and supply chain risk
construction and development risk
logistic and supply chain risk
legal risk
market risk – commodity prices
financial risks – foreign exchange 
interest rate liquidity
tax risk
exploration risk
mergers and acquisitions
political risk
legal risk
environmental risk
health and safety risk
our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014
gold equivalent production
14 moz 12
average ge grade in ore processed
47 gt 3
total cash cost
634 usge oz 15
allin sustaining cash cost
893 usge oz 18
adjusted ebitda
685 usm 15
capex
210 usm 34
acquisitions
kyzyl – 67 moz reserves at 75 gt
project development decisions
svetloye – capex of us80 million  
1000 ktpa heap leach with an 8year  
mine life
underlying return on equity
21 12 pp
free cash flow
306 usm 122
dividend payout ratio
58 39 pp
capex
210 usm 34
transactions made during 2014
kyzyl acquisition
reserve growth
216 moz 63
drilling volumes
2688 km 22
initial reserve estimates
albazino underground svetloye  
kutyn olcha veduga
initial resource estimates
north kaluga tarutin
compliance with uk corporate  
governance code ✓
ltifr
065 10
social investments
49 usm 8
ghg emissionsge koz production
642 t10 kt of ore processed 
5
priorities in 2015 priorities in 2015 priorities in 2015 priorities in 2015 priorities in 2015
•	 produce 135 moz of gold equivalent
•	 realise full benefits of the russian  
rouble devaluation and maintain  
a lower cost profile
•	 complete new feasibility study for kyzyl  
in q4 2015
•	 commence construction and mining  
at svetloye in q4 2015
•	 maintain superior financial performance
•	 maintain comfortable leverage ratios
•	 continue substantial dividend payments
•	 look for other valueaccretive ma 
opportunities in the fsu
•	 estimate resources for pgm assets
•	 further advance resource and reserve 
estimates at our brownfield operations
•	 substantially improve risk management 
and health and safety performance  
at our operations aim for zero fatalities  
at our mines
•	 roll out our environmental and social 
responsibility systems in the new region  
of operation kyzyl
strategic report governance financial statements appendices
18 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 19 sustaining strong performance
performance highlights
15
growth in adjusted ebitda
 306 usm
free cash flow in 2014
up 122 yearonyear
financial highlights operating highlights
strategic report financial statements governance appendices
ore mined
kt
32
2012 2013 2014
12591
10379
13706
ore processed
kt
5
2012 2013 2014
9809
10749
11300
gold equivalent
production
koz
12
2012 2013 2014
1063
1282
1431
revenue
usm
1
2012 2013 2014
1854
1707
1690
total cash cost
usge oz
15
2012 2013 2014
690
745
634
adjusted ebitda
usm
15
2012 2013 2014
932
598
685
average gold equivalent
grade processed
gt
3
2012 2013 2014
44
46
47
reserves growth
ge oz
63
2012 2013 2014
151
133
216
headcount
4
2012 2013 2014
9237 9232
8853
net incomeloss
usm
2012 2013 2014
428
198
210
underlying eps
usshare
53
2012 2013 2014
110
046
071
dividends declared for the period
usshare
2012 2013 2014
009
081
041
lost time injury
frequency rate
ltifr
14
2012 2013 2014
059 059
065
social investments
usm
8
2012 2013 2014
61
53
49
ghg emissions
co
2
 equivalent tonnes
per 10 kt of ore processed
5
2012 2013 2014
696
675
642
net debtadjusted
ebitda

4
2012 2013 2014
111
175
182
allin sustaining
cash cost
usge oz
18
2012 2013 2014
1059
1086
893
free cash flow
usm
122
2012 2013 2014
138 138
306
strategic report governance financial statements appendices
20 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 21 stable and resilient operations 
in a volatile market
market review
in 2015 the gold price is expected to 
continue to be negatively correlated with 
the strength of the us dollar and the 
speed of recovery of the us and global 
economy which may lead to an increase 
in interest rates by the federal reserve  
in the middle of 2015
silver closely followed the price dynamics 
of gold although given the weaker 
investment demand the goldsilver price 
ratio continued to increase from 611  
at the beginning of the year to 751 at  
the end of 2014 the average silver price 
decreased by 198 from us238oz  
in 2013 to us191oz in 2014 the 
closing price was down 199 from 
us199oz at the beginning of the  
year to us166oz at the yearend
demand
the annual total demand according to  
the world gold council was 3924 tonnes 
down 4 yearonyear after 2013’s record 
boost caused by lower prices
of that jewellery demand of 2153 tonnes 
although down 10 yearonyear  
was above the fiveyear average by a 
comfortable 5 margin in the second 
half of the year the indian government 
relaxed measures designed to restrict 
gold imports helping the physical 
demand jewellery is deemed to be the 
largest component of aboveground 
stocks of gold accounting for almost half 
of the 177 2 kt of gold estimated to be 
held by private owners and central banks
central banks bought 477 tonnes of gold 
in 2014 seeking continued diversification 
away from the us dollar these institutions 
continued to bolster their holdings of 
gold russia’s central bank was the 
largest purchaser adding 173 tonnes  
to its already sizable stocks russian 
holdings are now estimated at over 
1200 tonnes which accounts for 12  
of russia’s overall reserves kazakhstan 
bought another 48 tonnes during 2014 
sales of gold by central banks 
were limited
net investment demand was 905 tonnes  
in 2014 up 2 compared to 2013  
the increase was driven by a slowdown 
in outflows etf redemptions slowed 
considerably compared with 2013 
demand for bar and coins among smaller 
investors dropped by 40 after an 
abnormally strong demand in 2013
supply
2014 was another challenging year for 
gold producers many gold companies 
continued to cut costs and postpone  
their development projects to adjust to 
the lower gold price this should help  
to reestablish market confidence in the 
sector in the longer term as the supply 
pipeline thins in the short term however 
the global gold supply remained flat 
yearonyear mine supply rose for the 
sixth consecutive year to a new record  
of 3114 tonnes as mines that have been 
developed and become operational in 
recent years added to the supply stream 
and existing producers used highgrading 
to offset price declines meanwhile scrap 
supply slipped by 11 to 1122 tonnes 
as a result total supply at 4278 tonnes 
was little changed so although 
production is expected to stay at this 
record level in 2015 the potential for 
existing operations to generate greater 
volumes of output is limited the sector 
continues to lack interest in hedging 
beyond project financing or the 
restructuring or rollingover of 
existing positions
russia became the second largest  
gold producer in 2014 after china  
having produced more than 270 tonnes 
a further 23 increase in production is 
predicted by the russian union of gold 
miners australia’s production remained 
largely flat while annual mine production 
has decreased in the us peru and  
south africa
2014 global gold supply tonnes
2014 2013 yearonyear
total supply 4278 4273 0
total mine supply 3157 3011 5
recycled gold 1122 1262 11
source gfms thomson reuters 
price dynamics
both gold and silver prices demonstrated 
significantly more stability throughout 
2014 volatility was relatively low the year 
closed with the price at us1199oz 
little changed from the starting price for 
the year the moderate weakening of the 
gold price was driven by the continued 
strength of us dollar and equity markets 
as well as an expected interest rate 
increase by the us federal reserve in 
2015 throughout the majority of the year 
gold traded in the range of us1200 – 
1300oz with the lowest fixing at 
u1145oz in november and highest  
at us1379oz in march 2014 on an 
annual average basis the gold price 
decreased by 103 from us1410oz  
in 2013 to us1266oz in 2014
after last year’s dramatic 
reversal of a decadelong 
upcycle the performance 
of the gold and silver  
price in 2014 was far  
less remarkable
4278 t
total global gold supply in 2014
1266 usoz
average gold price in 2014
2013 us1410oz
gold demand by category  
in 2014 and 2013 tonnes
2013
2014
2014
 jewellery 2152
 technology 399
 investment 904
 central bank net purchases 477
2013 
 jewellery 2384
 technology 408
 investment 885
 central bank net purchases 409
source gfms thomson reuters world gold council
02
jan
13
1800
gold price usoz
1600
1400
1200
1000
800
600
400
200
0
800
silver price usoz and goldsilver price ratio
700
600
500
400
300
200
100
0
02
feb
13
02
mar
13
02
apr
13
02
may
13
02
jun
13
02
jul
13
02
aug
13
02
sep
13
02
oct
13
02
nov
13
02
dec
13
02
jan
14
02
feb
14
02
mar
14
02
apr
14
02
may
14
02
jun
14
02
jul
14
02
aug
14
02
sep
14
02
oct
14
02
nov
14
02
dec
14
● gold   ● silver   ● goldsilver
precious metal market summary 
strategic report governance financial statements appendices
22 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 23 another year of solid performance
operating review
production highlights
2014 2013  change
operating highlights
stripping kt 77458 84956 9
underground development m 61417 56258 9
ore mined kt 13706 10379 32
– openpit 11046 7975 39
– underground 2660 2404 11
ore processed kt 11300 10749 5
average grade in ore processed 
gold equivalent gt 47 46 3
production 
– gold koz 945 805 17
– silver moz 287 272 5
– copper tonnes 1631 4841 66
– gold equivalent koz
1
1431 1282 12
sales 
– gold koz 943 808 17
– silver moz 293 274 7
– copper kt 1029 6141 83
– gold equivalent koz
2
1372 1285 7
average headcount
3
8853 9232 4
safety
– ltifr 065 057 14
– fifr 018 006 200
1
 based on 160 agau and 51 cuau conversion ratios
2
 based on actual realised prices
3
 average for the period
polymetal continued to consistently beat expectations in 2014 
despite the persisting weakness of commodity prices
our gold equivalent production in 2014 increased by 12 to 
143 moz exceeding its original production guidance of 13 moz 
of gold equivalent by 10 and also the updated production 
guidance of 1365 moz by 5 this achievement was mostly 
driven by the full rampup of mayskoye and strong operational 
delivery at dukat and omolon
annual gold production for the year increased by 17 to 
945 koz annual silver production increased by 5 to 287 moz 
led mostly by dukat’s strong performance the share of gold  
in revenue composition increased to 69 compared with  
63 in 2013 production of copper concentrate at varvara was 
temporarily shut down due to the persisting weakness of the 
concentrate market resulting in a significant decline in copper 
production yearonyear
production dynamics on a quarterly basis are shown in the 
graph below with the full rampup of mayskoye the third  
and fourth quarters were the strongest during the year as 
concentrate was shipped out of the mine for sale or processing 
at the pox plant in the july – november navigation period
gold equivalent production by mine in 2014 
● dukat 31
● omolon 16
● albazinoamursk 16
● voro 11
● mayskoye 10
● khakanja 9
● varvara 7
2014 2013  change
dukat 443 409 9
khakanja 127 144 12
voro 159 154 3
varvara 106 131 19
omolon 226 158 43
albazinoamursk 227 238 4
mayskoye 143 48 195
total production 1431 1282 12
q1
2013
quarterly production data ge koz 
121
107
7
235
190
126
7
323
281
126
6
413
212
94
4
310
191
122
4
316
196
135
4
335
259
128
1
388
299
92
0
391
q2
2013
q3
2013
q4
2013
q1
2014
q2
2014
q3
2014
q4
2014
● gold    ● silver    ● copper
the underlying production trend was emulated very closely by 
sales for the year increased sales of mayskoye concentrate and 
further diversification of the offtaker base for concentrate from 
dukat contributed to the reduction in working capital and 
improved financial performance
analysis of production results
mining
stripping volumes in 2014 decreased yearonyear to 775 mt  
of rock moved 2013 85 mt this encompassed the completion 
of the stripping campaigns at varvara the move to underground 
mining at arylakh dukat hub and avlayakan khakanja hub 
and the completion of openpit mining at sopka with dalneye 
nearing completion underground development increased by  
a further 9 to more than 56 km 2013 55 km with increased 
capacity to match processing volumes at dukat and mayskoye 
underground mines while underground development continued 
at avlayakan khakanja hub and commenced at both 
birkachan omolon hub and arylakh dukat hub
ore mined increased by 32 to 137 mt 2013 104 mt mainly 
as a result of the completion of a major stripping campaign  
at varvara in 2013 increased volumes at albazino to match 
processing capacity and accelerated completion of openpit 
mining at sopka omolon hub underground mining  
increased at dukat and mayskoye in line with the respective 
plant throughputs
processing
ore processed increased by 5 yearonyear to 113 mt 
2013 107 mt the main contributors were dukat hub and 
albazino with increased plant capacity while mayskoye 
achieved a full year of production at the design throughput
in line with increased grades in ore mined average gold 
equivalent grade in ore processed grew by a further 3  
to 47 gt this was driven by increased contributions from 
mayskoye and albazino combined with a stronger grade  
profile at omolon and stable grades at other mature mines  
with the exception of khakanja and varvara
production and sales
we exceeded our original guidance with a record production 
level of 143 moz of gold equivalent key drivers behind this 
performance were dukat omolon and mayskoye at khakanja 
where the mine is approaching the end of its mine life 
production declined due to the decrease in average grade  
at varvara there was a 19 decrease in production due mainly 
to the temporary shutdown of the flotation circuit on the back  
of the continued weakness in the copper concentrate market
while most of the sales are comprised of refined metals we 
continue to sell concentrates from dukat goldsilver varvara 
goldcopper and mayskoye refractory gold to offtakers in 
kazakhstan japan south korea and china the offtake allows 
us to maximise the margins compared with inhouse processing 
of these materials in 2014 we continued to diversify our  
offtaker base in order to achieve an optimal combination of 
transportation costs and treatment chargesrecoveries offtake 
concentrate trading was pioneered by polymetal in the russian 
gold sector and has now clearly become one of our core 
competencies this will be leveraged further in the kyzyl project
exploration
our sustained investment in both greenfield and brownfield 
exploration despite the current weak commodity price levels is 
one of the key components of our business strategy we believe 
strongly that our longterm growth is reliant on our continued 
efforts in this area
our exploration activities are focused on five regions of russia –  
khabarovsk magadan chukotka karelia and ekaterinburg –  
as well as on kazakhstan polymetal currently has 62 licences 
for geological studies and gold silver copper and platinum 
group metals pgm mining covering a total area of 8624 km
2
 
and one coal mining licence of these our current exploration 
portfolio includes 42 licences covering 8130 km
2
 in 2014 
exploration capital expenditure amounted to us72 million  
269 km were drilled 3 km of exploration underground 
development completed and an additional 229 km
3
  
of trenching was carried out
the breakdown of the activities by the stage of the asset is 
presented in the charts on the next page
our key exploration objectives in 2014 included
•	 ongoing brownfield exploration activities aimed at extending 
mine lives at our existing operations khakanja currently the 
shortest mine life dukat omolon varvara and voro
•	 completion of exploration at our greenfield gold assets 
including svetloye kutyn maminskoye and – most  
recently – bakyrchik kyzyl project and getting them ready  
for development
•	 continuation of exploration for pgm deposits in the karelia 
and ekaterinburg regions in order to establish new hardrock  
pgm resources sufficient for a standalone mining operation
strategic report governance financial statements appendices
24 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 25 operating review
continuing to focus on operating 
capacity and investment in exploration
•	 continued exploration activities at albazino including 
underground drift geotechnical studies and infill drilling that 
were aimed at converting the newly discovered resources  
to reserves that would extend the mine life of albazino and
•	 further greenfield exploration for new precious metals 
deposits with a potential resource base which would be 
sufficient in grade and size to justify the construction  
of a standalone mine
key 2014 exploration statistics
exploration works 
2014 2013
1
 change
core drilling km 2688 2204 22
trenching th m
3
2291 1385 65
underground development  
for exploration purposes m 3312 1137 191
1
 restated data
in 2014 our drilling volumes increased by a further 22 
yearonyear to 2688 km the total capital expenditure on 
exploration increased to us72 million in line with the increased 
volumes including capitalintensive underground exploration at 
albazino and drilling at the newly acquired kyzyl project
as a result significant resource to reserve conversions were 
achieved during the year along with maiden reserve and 
resource estimates completed for several greenfield projects 
these included
•	 initial reserve estimate at svetloye khakanja hub of 677 koz 
with an additional 80 koz of resources which was followed  
by board approval of the project development decision
reserves and resources
movement in gold equaivalent ore reserves moz 
13277
reserves at
010114
1
 includes kyzyl north kaluga and veduga
reserves at
311214
acquisitions 
and initial 
reserve 
estimates
1
revaluation 
and resource 
conversion
processing
1688 2591
7455
21635
in 2014 we considerably expanded our reserves to 216 moz  
of gold equivalent this was a result of the kyzyl acquisition 
67 moz coupled with a significant resourcetoreserve 
conversion and initial reserve estimate completed at several  
of our operating mines and advanced exploration projects 
including albazino underground svetloye kutyn and veduga 
mineral resources additional to ore reserves declined by  
12 mainly as a result of the resourcetoreserve conversion 
particularly at albazino svetloye and olcha dukat hub 
additionally with the acquisition of kyzyl we increased 
resources by 38 moz
the moderate gold and silver prices of us1200oz and 
us17oz respectively used in both reserve and resource 
estimates in 2014 2013 us1300oz and us225oz did not 
have a material impact on the final size of either but we felt that 
our more conservative approach was warranted
mainly as a result of the kyzyl acquisition our average ore 
reserve grade increased by 16 to 43 gt ge and is one of  
the highest in the sector see chart on page 13 the average 
mineral resource grade also increased by 11 to 42 gt also 
mainly due to the addition of kyzyl mineral resources at 69 gt
•	 initial reserve estimate at kutyn completed in 2015 –  
386 koz with an additional 649 koz in resources
•	 initial resource estimate at tarutin 685 koz of gold equivalent 
of which polymetal now owns 50 which is now well 
positioned to complement the varvara resource pool
•	 initial resource estimate at north kaluga 171 koz of gold 
equivalent previously part of uralpolymetal joint venture  
and now a 100 subsidiary of the group
•	 conversion of underground resources into reserves at 
albazino 14 moz and olcha dukat hub 120 koz
in 2015 polymetal will continue to expand its exploration 
portfolio into new potential areas the company filed  
19 applications for licences in 2015 including six gold areas  
in the urals nine gold and silver areas – four in the magadan 
region and five in khabarovsk region and four pgm areas – 
one in the urals and three in karelia
our efforts during the year to come will be focused on
•	 stepout drilling at kyzyl including the drilling to establish 
resources for the bolshevik deposit and bakyrchik 
exploration area
•	 continuing brownfield exploration near the omolon and 
khakanja operations
•	 stepout drilling at the flanks of knownore bodies at albazino
•	 infill drilling at svetloye ahead of the expected 
commencement of mining in q4 2015
•	 completing the pgm resource assessment at the semcha 
area and prospecting for new objects with pgm mineralisation 
in the region
outlook for 2015
we are confident about the outcomes for 2015 with all of our 
operating mines now running at full capacity the company  
is on track to produce 135 moz in 2015 and in 2016 there will 
be a slight decrease in production mainly due to a reduction  
at omolon after record levels in 2014 and the ongoing grade 
decline at khakanja as it approaches the end of its mine life
operational plans
our current year’s operational objectives for existing 
mines include
•	 commencing mining at oroch omolon hub
•	 further increasing volumes of underground mining with  
the start of underground mining at birkachan and further 
expansion at arylakh dukat hub avlayakan khakanja  
and mayskoye and
•	 materially improving health and safety performance including 
at underground mines and enhancing risk management 
activities with particular attention given to underground mining 
and blasting works
project development
the key focus of management will increasingly shift towards  
our new projects – kyzyl being the largest our efforts in 2015 
will centre around completion of the full feasibility study for the 
project in q4 2015 and the start of fullscale construction in  
q2 2016 we will proceed with the construction of the svetloye 
mine approved in 2014 with mining expected to start in  
q4 2015 we will also continue geological and metallurgical 
studies at viksha semcha – our pgm project in karelia
● geological studies   ● greenfield exploration   ● development
breakdown of exploration assets by stages
exploration works focused on 29 licenced areas
15
12
2
● brownfield   ● greenfield
drilling volume – 2688 km
2005
683
strategic report governance financial statements appendices
26 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 27 transitioning underground
location magadan region russia
managing director vladimir bloshkin
employees 783
mining openpitunderground
processing 850 ktpa cipmerrillcrowe kubaka  
production start date 2010
life of mine 2021
key figures
226 koz
ge production cost 
43
570
usge oz 
total cash costs 35
 51
adjusted ebitda margin  
23
targeting reliable resource 
toreserve conversion
location magadan region russia
managing director mikhail egorov
employees 1807
mining mostly underground
production start date 2000
life of mine 2023 lunnoye 2024 dukat
key figures
3rd
largest silver deposit  
in the world
239 moz
silver production 
8
87usse oz
total cash cost  
25
21mt
ore processed  
10
dukat
operating review

lunnoye
6
1
2
3
4
dukat
magadan
mines
1 arylakh
2 lunnoye
3 perevalny
4 dukat
5 goltsovoye
6 olcha
processing plants
 omsukchan
 flotationgravity
  lunnoye  
cyanide leaching  
and merrillcrowe
 town
5

omsukchan
omolon


3
4
kubaka
evensk
magadan
mines
 birkachan
2 tsokol
3 oroch
4 sopka
5 dalneye
processing plants
 kubaka
 cil merrillcrowe
 birkachan
 heap leach
 town
2
5
1
1
mining
at dukat ore mined grew by 17 compared to 2013 to 147 mt 
of which 09 mt was hauled by the newly commissioned railroad 
haulage system underground development grew by 2 to  
312 km smallscale equipment was integrated in the current 
production process we are now prepared to mine narrow ore 
bodies in smeliy and vostochniy at goltsovoye a total of  
191 kt at a stable grade of 624 gt silver was mined in 2014 
at arylakh underground development continued following  
the completion of openpit mining in q2 the ore is still 
predominantly sourced from lunnoye underground mine  
with a variable grade profile driven by stope sequencing with 
average silver grade increasing by 22 to 421 gt in 2014  
at lunnoye mine stoping in ore zone 7 started to ensure  
better grade control and to reduce dilution we launched pilot 
cutandfill mining in horizontal layers in ore zone 7
processing and production
in 2014 omsukchan concentrator shifted from threestage to 
twostage milling as a result of this and due to a reduction in 
time for relining and scheduled maintenance ore processed 
grew by 9 up to 17 mt there was a modest reduction  
in average grades by 9 for gold to 066 gt and by 5 to 
4056 gt for silver silver recoveries were sustainably high at 
865 due to an ore quality control system based on geological 
and process mapping as a result gold and silver production 
grew by 4 and 7 respectively to 315 koz of gold and 
195 moz of silver
at lunnoye ore processed grew by 18 yearonyear to  
400 kt after the new sag mill was commissioned with average 
grades increasing by 21 for gold and 5 for silver and  
with continued improvement in silver recoveries to 918  
gold production was 139 koz up 36 yearonyear  
and silver production was 44 moz up 16
the hub’s total silver production was a record 239 moz  
up 8 yearonyear gold production grew to 453 koz  
up 12 yearonyear
resources and exploration
in 2014 we completed the conversion of resources into reserves 
at olcha adding 119 koz of gold and 222 koz of silver into the 
hub’s base further resourcetoreserve conversion continued 
at the deeper levels of dukat lunnoye and goltsovoye we have 
carried on our exploration efforts at the flanks of dukat as a 
result of drilling 28 km at the flanks known ore bodies were 
traced in more detail and new ‘blind’ veins were discovered 
priorities for 2015
matching increased processing capacity we plan to increase 
underground mining throughput up to 1400 ktpa at dukat 
underground mine at goltsovoye we will commence 
underground development of ore body 2 to prepare for stoping 
active stoping will commence at arylakh underground mine  
to improve safety performance and monitoring we will use 
centralised transportation to underground mines and install 
position control systems for workers and mining equipment 
strong gold and silver recoveries are expected to be maintained 
at omsukchan concentrator due to automated control over 
cleaner flotation machines exploration drilling at both dukat 
flanks and olcha is due to continue in 2015 to replenish the 
hub’s resource base
omolon delivered strong operating and financial performance  
in 2014 with gold equivalent production increasing by 43 to 
226 koz and cash costs decreasing by 35 to us570ge oz 
this was driven by a higher grade profile as well as an 8 
increase in kubaka mill throughput
mining
total ore mined increased by 20 in 2014 and amounted  
to 2065 kt
at sopka ore mined grew by 37 to 922 kt and openpit 
mining was completed in q4 2014 with ore processing due to 
be completed in q3 2015 in q1 2015 we plan to relocate the 
released mining fleet to oroch by winter road at dalneye ore 
mining will be completed in 2015 at birkachan openpit mining 
was completed in june and the underground development 
started in q3 at tsokol which was the major source for cip 
circuit in 2014 ore mined grew by 42 to 317 kt
processing
the kubaka plant achieved a further increase in throughput  
in 2014 with ore processed increasing by 8 to 825 kt 
supported by a high share of ore processed from sopka and 
dalneye during the year average grades processed increased 
by 31 for gold to 67 gt and by 13 for silver to 133 gt  
as a result gold production at kubaka increased by 48  
to 170 koz and silver production was up 14 to 29 moz  
the peak level achieved by omolon hub 
at birkachan heap leach irrigation of the existing leach pads 
continued and 6 koz of gold were recovered from the solution 
during 2014 there will be no additional ore stacking in 2015  
as multiyear recoveries will continue to be monitored
reserves resources and exploration
at omolon we continue to work on a number of brownfield 
targets close to the kubaka plant in order to extend the life of 
mine in 2014 we have completed an initial reserve estimate  
for burgali adding 72 koz to reserves and continued drilling  
at the adygaya and pyatinakh areas in 2015 we will continue 
drilling at other areas such as yolochka
 
priorities for 2015
in 2015 omolon operations will increasingly switch to 
underground mining openpit mining at tsokol will near 
completion in q2 2015 with underground development planned 
to commence in q3 2015 the potential for underground mining 
will be evaluated after the completion of a detailed infill drilling 
campaign ore stoping at birkachan is scheduled to start  
in q4 2015 openpit mining at oroch will start in q2 2015  
with ore to be trucked by winter road starting from q4 2015  
for processing in 2016 
processing volumes in 2015 will be split between sopka 
birkachan dalneye and tsokol with major volumes to be 
processed from sopka and birkachan
strategic report governance financial statements appendices
28 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 29 extending life of mine by 
adding underground reserves
location khabarovsk territory russia
managing director alexei sharabarin
employees 924
mining openpitunderground
production start date 2009
life of mine 2030
key figures
 2 7 moz
ge reserves 
78
 9 4 
pox recovery 
9 
227koz
total gold production 
4
unique processing facility  
for refractory concentrates
location khabarovsk territory russia
managing director viktor nikitanov
employees 340
processing 500 tpd pox  cyanidation
production start date 2011
key figures
 16 3 kt
concentrate processed  
at the amursk pox 28
94 
pox recovery 
9 
240 koz
total gold production 
51
operating review
amursk pox
mines
1 albazino
2 mayskoye
processing plants
  a m u r s k p ox  
pox cyanidation
 town
 sea port
pevek
khabarovsk
komsomolsk
onamur
vanino
2
1

albazino
mines
1 albazino
processing plants
  amursk pox  
pox cyanidation
 town





nikolaevsk
onamur
komsomolskonamur
khabarovsk
kherpuchi
oglongi
1
the flagship amursk pox plant delivered a full year of 
performance at design throughput and recoveries this now 
includes concentrate from mayskoye along with that from 
albazino in the combined processing our unique experience  
of using pox technology in the former soviet union was one  
of the key factors in determining our competitive advantage and 
enabling us to acquire the kyzyl project with its refractory ore
2014 highlights
in 2014 the amursk pox plant worked steadily at the design 
parameters throughput increased by 276 yearonyear to 
163 kt of concentrate processed including the initial 10 kt of 
concentrate from mayskoye recoveries from the albazino 
concentrate were 94 up 9 yearonyear and fully in line with 
design levels design levels were exceeded in the last quarter  
of the year with 945 recovery achieved average recoveries 
from mayskoye concentrate were 92 including pilot 
processing in q1 increasing to 94 in q4
as a result total gold production was 240 koz including  
12 koz from mayskoye concentrate up 51 yearonyear
priorities for 2015
in 2015 continuous flowsheet improvement is set to continue 
several targeted improvements will further develop the water 
circulation system of the pox plant the reverse osmosis 
section capacity will be increased to process recycled liquor 
the concentrate discharge section will be upgraded liquid 
oxygen storage and a gasification section will be constructed
in 2015 as previously all concentrate from albazino will be 
processed at the pox the volume of mayskoye concentrate 
processed through the pox will increase as sufficient stockpiles 
have now been built we are targeting stable gold recoveries  
at 94 for both concentrates
albazino had a full year performing at design parameters  
it also demonstrated substantial cost improvement in 2014 with 
cash cost reducing by 21 to us625oz below the group’s 
average despite a moderate scheduled decrease in grade
mining
albazino openpit mine expanded in 2014 to match the 
upgraded capacity of the processing plant ore mined 
increased by 17 to 157 mt of ore which partially 
compensated for a reduction in average grade mined down 
12 to 49 gt closer to average reserve grade openpit 
mining commenced in the new olga ore zone
underground development continued mainly to facilitate 
additional exploration infill drilling and geotechnical studies  
one block was prepared for pilot mining in order to choose  
the optimal development system 
during the year a mining fleet dispatch management system 
was implemented at albazino this increased capacity by five 
extra vehicles per day with data created for further optimisation 
analysis additional benefits will be realised in the longer term
processing
ore processed grew by 6 yearonyear to 1609 kt 
successfully achieving the new nameplate capacity of 16 mtpa 
average grades processed declined to 48 gt in line with the 
mine grade profile gold recoveries remained stable at 88 
while concentrate yield reduced from 9 to 84 136 kt of 
concentrate with 2185 koz of gold contained were produced 
with an 8 decrease mainly driven by this planned grade 
decline as the pox plant continued to reduce excess stockpiles 
in the beginning of the year 153 kt of albazino concentrate were 
processed with total gold produced at 227 koz
the reliability of albazino power supply was enhanced by 
adding 10 diesel gensets
exploration and development
active infill drilling at the new ore zones continued in 2014 with 
more than 65 km of core drilling performed however following 
the acquisition of the kyzyl project in the middle of the year  
it was decided to postpone putting the new resources into 
production by expanding the plant instead the new resources 
were converted into reserves after the infill drilling campaign  
this resulted in the addition of 14 moz and more than  
doubled the mine life 
priorities for 2015
we will continue exploration of the known ore zones and 
prospecting drilling in the flanks of ore bodies we will also 
continue our search for new ore zones within a range  
of 50 km from the albazino mine
following the conversion of underground resources into 
reserves in 2015 we are planning to complete pilot mining 
aimed at choosing an optimal development system and to start 
stoping in the olga zone we will continue stripping and further 
development of the new pit 

strategic report governance financial statements appendices
30 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 31 focusing on minelife 
extension
location khabarovsk territory russia
managing director alexander akamov
employees 1183
mining openpitunderground
processing cyanide leaching and merrillcrowe
production start date 2003
life of mine 2018
key figures
1077kt
ore mined  
154
127koz
ge production  
12
 704 
usge oz
total cash costs 7 
bringing our newest  
mine up to speed
location chukotka russia
managing director evgeniy tsybin
employees 840
mining underground
processing 850 ktpa
production start date 2011
life of mine 2020
key figures
85 gt
average reserve grade
188 koz
gold in concentrate 
produced 117
92
pox recovery
143 koz
total gold production 
195
operating review
mayskoye
mines
1 albazino
2 mayskoye
processing plants
  
amursk pox  
pox cyanidation
 town
 sea port
pevek
komsomolsk
onamur
vanino
2
1

khakanja
mines
1
 yurievskoye
2
 avlayakan
3 ozerny
processing plants
 khakanja
 sea port
1
2
3
okhotsk
kiran
gold production at khakanja in 2014 decreased slightly by 5 
yearonyear to 979 koz while silver production was 17 moz 
down 29 yearonyear these decreases were driven by 
planned average grade declines as the khakanja mine is nearing 
depletion and the mill feed is complemented by material from 
lowergrade stockpiles
in 2014 we completed all preparatory works at svetloye ahead 
of construction in 2015 a seaside access point and allseason 
road from the shore to the site have been fully established 
mining
at khakanja openpit mine works concentrated on pit 1 with 
increased stripping and 271 kt of ore mined in 2014 average 
gold grades in ore mined increased more than twofold to 
30 gt while silver grade remained stable at 142 gt at ozerny 
which became the major source of ore for processing in 2014 
764 kt of ore were mined with gold grade increasing by 12 to 
40 gt at both khakanja and ozerny openpit mining will be 
completed in 2015 in q1 and q2 respectively with the mining 
fleet to be redirected to svetloye 
at avlayakan where mining works completely switched to 
underground in 2014 we achieved design capacity with 38 km 
of underground development completed during the year and  
42 kt of ore mined the shift to underground resulted in a 55 
increase in the average gold grade to 138 gt and a roughly 
stable silver grade of 105 gt
processing
in 2014 ore processed was 622 kt unchanged from 2013 
average gold and silver grades were 53 gt and 117 gt 
respectively the silver grade decline is attributable to the 
increased processing of ore from ozerny that largely substituted 
that from khakanja
exploration and development
a highlight of 2014 was the completion of the feasibility study  
for the svetloye 10 mtpa openpit heap leach operation 
followed by the board’s approval for the start of construction 
ore reserves are estimated at 73 mt at an average gold grade 
of 28 gt containing 07 moz of gold this capitallight project 
with a capex of approximately us80 million and an initial mine 
life of eight years generates an impressive 44 irr at a gold 
price of us1250oz and will significantly extend the overall 
mine life of the khakanja hub svetloye is expected to add 
70 koz of gold in annual production at an average allin 
sustaining cost of us750800oz starting from q3 2017
in our exploration efforts we are focusing on extending 
khakanja’s mine life through brownfield exploration at ozerny 
prospecting drilling in the flanks 8 km was performed with  
new ore body discovered in the northern flank we are also 
continuing prospecting works including trenches and drilling  
in the golubichny and dikiy areas where several ore bodies 
were identified three additional new licences were obtained  
in 2014 covering 257 km
2

priorities for 2015
in 2015 some further decline in production is expected due  
to reduced grades in ore from khakanja and ozerny and  
the current reserve base nearing depletion by 2018 in the 
meantime mining at svetloye is expected to start in q4 2015 
our brownfield exploration programme will continue in 2015 
with the focus on the mankanja vodorazdelny and serebryany 
areas where initial highgrade intercepts were obtained in 2014
in 2014 mayskoye operated the first full year at design capacity 
and delivered a significant 143 koz contribution to the group’s 
total production we have also achieved better offtake terms 
and were able to effectively split the concentrate produced  
at mayskoye between pox processing and offtake to achieve 
optimal economic performance
mining
mining at mayskoye achieved the target level in 2014 with  
105 km of underground development during the year 653 kt  
of ore were mined at an average grade of 84 gt this was  
a 14 improvement compared with 2013 achieved due to 
better dilution and grade control
processing
in 2014 ore processed grew by 66 yearonyear to 807 kt 
with an average gold grade of 87 gt 22 reflecting the 
increased volumes and quality of the ore mined average 
recoveries were 84 and increased by 8 compared with 
2013 in the second half of the year following a number of 
operational improvements and increase in grades recoveries 
exceeded 86 927 kt of flotation concentrate containing 
188 koz of gold were produced of this 72 kt of concentrate 
were sold to china and another 10 kt processed at the  
amursk pox plant with the remaining material stockpiled 
onsite after the close of the navigation period
sales and downstream processing
in 2014 we were able to expand the number of our offtake 
partners in china and achieve an improvement in the offtake 
terms as our partners gained experience with the material 
supplied 130 koz of payable gold was sold to offtakers  
in 2014 while another 13 koz came from the processing  
at the amursk pox
at the pox plant following the initial pilot processing in q1 2014 
full scale blending of mayskoye concentrate commenced in the 
second half of the year once sufficient amounts of concentrate 
were shipped to amursk from the mine 10 kt of concentrate 
were processed with recoveries reaching 94 by the yearend 
and thus exceeding the design level
priorities for 2015
we will continue to work on further improvement of grade 
control and dilution through the optimisation of underground  
mining methods we are also aiming to develop geomechanical 
modelling in order to improve engineering solutions for 
preparation and cutting works an underground communication 
system will be installed in order to improve dispatch control  
at the mine 
a further increase in the concentrator throughput to reach 
nameplate capacity of 850 ktpa is planned while maintaining 
the design recovery levels in excess of 86 
in 2015 the share of amursk pox in total production should 
increase with sufficient stockpiles available before the start  
of the navigation period in july nevertheless we will continue  
to split the concentrate between own processing and offtake  
in china based on the metallurgical properties and resulting 
economics of each route
khabarovsk

strategic report governance financial statements appendices
32 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 33 strong operations in 
kazakhstan delivering  
a stable contribution
location kostanay region kazakhstan
managing director alexander simon
employees 720
mining openpit
processing 3150 ktpa cip and 1050 ktpa flotation
production start date 2007
life of mine 2030 varvara
key figures
17moz
ge reserves
 106 koz 
ge production 19
2030
life of mine
705 
usge oz
total cash costs 11 
sustaining high performance  
and margins
location sverdlovsk region russia
managing director andrey novikov
employees 919
mining openpit
processing 950 ktpa cip cyanide leaching  
heap leaching and merrillcrowe
production start date 2000 voro heap leach
2005 voro cip
life of mine 2027 voro
key figures
376
usge oz  
total cash cost 25
69
adjusted ebitda margin  
9
 15 9 koz
ge production  
3
operating review
voro
mines
1 voro
2  maminskoye 
licence area
processing plants
 voro
 town
1


karpinsk
serov
nizhny 

ekaterinburg
2
varvara
mines
1
 varvara
processing plants
 varvara
 town

kostanay
1
in 2014 varvara faced additional market challenges due to  
the decline in the copper price and resulting weakness of the 
copper concentrate market unlike our russian assets which 
benefited significantly from the massive rouble devaluation the 
effects of tenge devaluation were lower and did not fully offset 
this price decline nevertheless varvara demonstrated stable 
cost performance tcc decreasing by 11 to us705ge oz 
and margins in 2014 despite the production decline
mining
waste mined decreased by 2 yearonyear while ore mined 
grew by 98 to 3985 kt after the major stripping campaign 
was completed stripping started in the potential northeast  
pit and mining started in the south pit during the year mining 
works were redirected in order to increase the volume of gold 
ore after the temporary suspension of the flotation circuit 
stricter grade control procedures were implemented with  
gold grades remaining stable throughout the year
processing
ore processed at the leaching circuit amounted to 3117 kt 
17 yearonyear with average gold grades of 114 gt  
10 yearonyear with lower grades attributable to the lower 
amount of thirdparty ore available for purchase during the year 
the flotation circuit throughput was limited to 547 kt as the 
section was temporarily shut down in july this was to prevent 
the accumulation of excess concentrate stockpiles in a weaker 
copper concentrate market the sales of concentrate stockpiled 
resumed at the end of 2014early 2015 the reduction in grades 
at both circuits resulted in lower gold recoveries 5 at the 
leaching circuit and 9 at the flotation circuit as several 
metallurgical initiatives were implemented gold recoveries  
at the leaching circuit increased to 81 in q4 with further 
improvements expected in 2015
total gold and copper production in 2014 declined by 8 and 
66 to 98 koz and 1631 t respectively mainly as a result of 
the copper circuit suspension 
exploration
as with other mature mines we are actively engaged in 
brownfield exploration and the search for potential thirdparty 
ores for varvara in order to complement the existing resource 
base and leverage existing capacity in 2014 these objectives 
were largely met by drilling and the subsequent initial resource 
estimate at tarutin a goldcopper deposit located in close 
proximity to varvara across the russiakazakhstan border  
the newly established 645 koz of ge mineral resources  
of which polymetal currently owns 50 have the potential  
to extend varvara’s life of mine
priorities for 2015
in 2015 both mining and processing will focus on the gold  
ore with full throughput expected at the leaching circuit and a 
moderate reduction in grade as a result of further deterioration 
in the copper price in the beginning of 2015 restart of the 
copper circuit is likely to be delayed till 2016 the existing 
copper concentrate stockpile is expected to be completely  
sold in 2015 infill and stepout drilling will continue at tarutin
voro despite being one of the oldest assets in the portfolio 
continues to be a key cash flow contributor this is due to  
its prime location with access to infrastructure continuous 
process improvements and resulting attractive cash cost  
profile tcc of us376oz and aisc of us515oz in 2014  
a decline of more than 25 compared with 2013
mining
ore mined at voro grew by 6 yearonyear to 19 mt with  
an increased shift towards primary ore mining was performed  
in two areas of the gorevoy deposit on the south voro pit 
average grades in primary ore declined modestly to 52 gt 
while average grade in oxidised ore increased by 17 to 18 gt 
processing
at voro heap leach the amount of ore stacked decreased  
to 747 kt however production at the heap leach grew  
by 18 and amounted to 277 koz this was due to the 
implementation of the carbonincolumn cic process instead 
of zinc precipitation in the merrillcrowe circuit which was  
previously used for recovery from the heap leach solution
total gold production at voro in 2014 increased slightly  
by 3 yearonyear to 1575 koz as higher recoveries at  
the cip plant up 3 pp to 825 offset slightly lower grades 
exploration
our nearmine exploration efforts are mostly focused on 
oxidised ore which is nearing depletion at the main voro 
deposit in 2014 we carried out exploration works in the 
shilovskaya licence area and the bortevsky area by core drilling 
we have also completed drilling with an initial resource estimate 
of 171 koz of gold equivalent at the north kaluga deposit which 
was acquired in the restructuring of our interest in the ural
polymetal joint venture 
priorities for 2015
our nearmine exploration will continue to focus on the potential 
sources of heap leachable mineralisation this will include in 
addition to existing projects exploration drilling at nyavlinsky 
and krasnoturinsky licence areas
ore stacking at the heap leach plant will near completion in 
2015 with 400450 kt of ore to be stacked during the year 
processing at the cip plant will continue at a steady pace with 
a moderate reduction in grade nevertheless voro is expected 
to remain one of the key cashgenerating units of polymetal  
with low capital expenditure and operating cost levels 
strategic report governance financial statements appendices
34 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 35 developing a worldclass 
asset 
location northeastern kazakhstan
bakyrchik and bolshevik
67moz
gold reserves
75 gt au
average reserve grade 
jorc
 20 years
estimated life of mine 
bakyrchik
development project
kyzyl
new infrastructure
the decommissioning of the old infrastructure site clearing and 
various permitting activities including environmental and social 
impact assessment esia preparation have all continued as 
planned in the next phase we will progress to more detailed 
studies and the selection of processing flow charts this should 
all be finalised by q2 2015
we have developed a preliminary layout for the mining and 
processing facilities and the supporting infrastructure including 
power heat and water supplies we have already commissioned 
the design of the power grid stepdown transformer substation 
water conduits and boiler house some existing facilities will  
need to be dismantled during 2015 and into q1 2016 before  
we start stripping in the pit others will be used as temporary 
storage and maintenance facilities during the construction period
in q4 2015 we will finalise the audit of the updated feasibility 
study with the inclusion of the estimate of the resources required 
for the openpit mining option we will also carry out a full esia 
in line with international best practice
exploration plans
year site
drilling 
m
core 
sample
assay 
analysis
2014  
actual
bakyrchik mining and 
exploration licence 16809 4681 5500
2015  
plan
bakyrchik mining and 
exploration licence 36190 14727 18555
bolshevik 9000 1035 1490
in september 2014 polymetal completed the acquisition  
of the kyzyl project in kazakhstan the addition of this world
class asset to our highquality portfolio will provide us with  
a considerable expansion of our existing reserves and mine  
life as well as a significant exploration upside
the kyzyl gold project consists of the bakyrchik and bolshevik 
gold deposits bakyrchik is one of the largest untapped  
gold deposits in the former soviet union and globally  
with gold reserves of 67 moz at 75 gt jorc this will  
double polymetal’s gold equivalent reserves inferred resources 
of 29 moz gold at 66 gt at bakyrchik are expected to provide  
a life of mine of 20 years and there is the potential for further 
exploration on adjacent properties which is covered by 
bakyrchik and bolshevik licences
kyzyl is located in northeastern kazakhstan 75 km from the 
industrial centre of oskemen ustkamenogorsk this is a 
traditional mining region with an established infrastructure  
which gives us good access to power and rail
openplan mining planned
the previous owners had only considered underground  
mining of primary ores with full processing flowsheet to  
doré production including roasting and biox technologies 
polymetal believes that the challenging underground mining 
conditions make openpit mining a more attractive option  
from the point of view of risk mitigation and capital expenditure 
reduction despite the expected high stripping ratio openpit 
mining is judged to be the better option for the first ten years  
to mine 18 mt of ore with 120 t of gold followed by a switch  
to underground mining at a later stage
initially we plan to build a flotation plant for ore processing 
selling the concentrate to thirdparty offtakers we will then 
review the options of either processing the concentrate in  
our pox hub in amursk or alternatively building a new pox 
plant onsite this sequencing will reduce risks split capital 
expenditures and ultimately increase the return on invested 
capital the initial capital expenditure for the flotation plant  
and openpit mine is estimated at us440530 million  
this will be revisited once the feasibility study has been 
completed in q4 2015
in 2014 polymetal submitted documents for openpit 
development to the regulatory authorities of the republic  
of kazakhstan for examination the company also carried  
out a preliminary assessment of the environmental impact and 
held a series of public consultations with the local bakyrchik 
community with positive outcomes the application for the 
statutory permits for openpit mining should be completed  
with the regulatory authorities in q2 2015
preparatory work underway
we have now started exploration and infill drilling in the main 
licence area and along the edgesborders of the deposit 
planned exploration is set to continue in 2015 see table on  
the next page in q34 2014 we commenced the engineering 
surveys required to design mining and processing facilities  
and also performed a technical and economic assessment  
of the mining equipment needed for openpit mining
from the bulk samples collected pilot metallurgical testing  
of the kyzyl ore has confirmed the viability of ore flotation  
to concentrate this signals the potential to improve on  
the parameters achieved in the previous test work
gold deposits
1 bakyrchyk
2 bolshevik
development  
project
 kyzyl
 town

oskemen
1
2
current outline of the project
openpit and underground mine
strategic report governance financial statements appendices
36 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 37   
china
south
korea 
north
korea 
japan
 mongolia 
uzbekistan
kyrgyzstan
tajikistan
turkmenistan
ukraine
belarus
latvia
finland
georgia
azerbaijan
russia 
kazakhstan
china
moscow 
st petersburg 
kaliningrad 
magadan
mayskoye
oskemen 
pevek
khabarovsk 
ekaterinburg 
semcha
svetloye
okhotsk
amursk pox hub
khakanja hub
voro
albazino
varvara
tamunier
olyndja
golubichny
kutyn
elmus
svetlobor
maminskoye
dukat hub
omolon hub
kostanay 
evensk 
kyzyl
sustained investment  
in standalone exploration
exploration
despite the current weak commodity 
price levels our sustained investment  
in both greenfield and brownfield 
exploration is one of the core pillars of  
our strategy we strongly believe that  
our longterm growth is underpinned  
by these efforts in selecting licence  
areas for exploration we focus on areas 
adjacent to our processing hubs or 
potential hubs brownfield and on assets 
with the potential to become sizeable 
standalone operations the advancement 
of the exploration project is subject to 
rigorous review through preestablished 
project stages that are linked to our 
estimate of the resource potential and  
its economic prospects at any stage  
a project may be terminated suspended  
or moved to the next exploration stage 
in 2014 we completed internal  
restructuring of the exploration  
function at polymetal that allowed us  
to decentralise reduce red tape and  
to increase the responsibility of local 
geology project managers for the 
outcome of the project this will also 
speed up the project evaluation process 
and consequent turnover of projects and 
licences that we hold
our key greenfield exploration targets  
for 2014 were
•	 continued exploration at key greenfield 
gold assets svetloye kutyn 
maminskoye and kyzyl preparing 
them for development stage
•	 exploration for platinum group  
metals pgm deposits in the karelia  
and ekaterinburg regions in order  
to establish new hardrock pgm 
resources sufficient for a standalone 
mining operation
 
key greenfield projects
as a result of exploration activities during 
the year significant resourcetoreserve 
conversions were achieved maiden ore 
reserves and mineral resources estimates 
were completed for several greenfield 
and brownfield projects 
karelia pgm project
one of our newest greenfield exploration 
projects viksha semcha is now very 
well positioned to establish a large pgm 
resource in karelia an accessible region 
with developed infrastructure we have 
been exploring the precious metals 
mineralisation gold platinum and 
palladium of the koykar ore field 
our activities in 2014 were focused on 
drilling to a depth of 100 m at the large 
pgm ore body identified along the known 
surface outcrop core drilling 187 km 
was carried out at the viksha kenti 
and shagri areas in these areas pgm 
mineralisation within the ferrous titanium 
horizon was revealed with a steady width 
at shallow depths platinum gold and 
palladium mineralisation was identified 
with an average palladium equivalent 
grade of 1826 gt mineralised potential 
in the most explored part of the field 
viksha is estimated at 57 tonnes of 
palladium equivalent the total mineralised 
potential of the koykar sill is estimated at 
350400 tonnes of palladium equivalent 
including 190 tonnes at an openpittable 
depth of 150 m viksha’s statutory 
feasibility study and the statutory gkz 
reserves were approved by the russian 
state authorities in 2014 in 2015 we will 
be converting the exploration licence  
to exploration and mining 
svetloye
in 2014 we completed an initial  
ore reserves estimate at svetloye  
of 677 ge koz with an additional  
80 ge koz of mineral resources project 
development has been approved by the 
polymetal board and svetloye will now 
become part of khakanja hub in 2014 
our drilling campaign focused on the 
elena and emi zones as well as prospect 
drilling in the ludmila zone and emi 
flanks in 2015 along with the start of 
construction we will prepare for mining  
at svetloye with the infill detailed drilling  
to further increase the resource potential 
we will start prospecting at the new 
licence area pravosekchenskaya
kutyn
at kutyn we targeted the assessment  
of oxidized openpittable resources and 
the increase of the resource potential of 
the deposit by discovering new ore 
bodies the works were focused on 
mineralisation located near the surface 
and suitable for heap leaching including 
extensions of known ore bodies detailed 
drilling and mapping of ore bodies  
in sedlovinnaya rodnikovaya and 
geophyzicheskaya enabled us to perform 
geotechnical mapping of ores amenable 
to cyanidation trenching was performed 
in the itylskaya delinskaya dzhuaty1 
and dzhuaty2 ore zones known and 
new ore bodies have been traced along 
the strike 
the initial ore reserves estimate  
and the prefeasibility study at kutyn 
completed in 2015 confirmed 386 koz 
with additional mineral resources of 
649 koz the prefeasibility study entails 
an allyearround 700 ktpa openpit 
heapleach operation with an initial  
mine life of five years annual average 
production is estimated to be 50 koz  
of gold with average allin sustaining  
costs of us750oz primary nonoxide 
mineralisation is not included in the 
current study and therefore not included 
in the ore reserve preproduction capital 
expenditure is estimated at us52 million 
however with the current focus on the 
development of the kyzyl project we will 
consider sale or partnership to advance 
the development of the asset
maminskoye
infill drilling continued at maminskoye  
in the first half of 2014 following the 
acquisition of the kyzyl project we 
decided to reprioritise the project 
pipeline and accordingly slow down  
the development of maminskoye 
suspending further exploration activities
exploration activities in 20132014
drilling km trenching 1000 m
3
greenfield 2014 2013
1
2014 2013
1
urals 243 591 124 190
maminskoye 54 274 – 38
tamunier 76 52 – –
svetlobor pgm 36 109 88 82
urals regional 77 156 36 70
far east 194 250 1813 321
kutyn 54 152 1030 321
svetloye 61 87 127 –
olyndja 46 – 425 –
uchama – 08 – –
golubichny 33 – 231 –
landjinskaya – 03 – –
northwest 246 183 – –
semcha pgm 187 50 – –
elmus 59 133 – –
subtotal 683 1024 1936 511
drilling km trenching 1000 m
3
brownfield 2014 2013
1
2014 2013
1
albazino 755 462 218 102
dukat hub 414 256 – –
varvara 361 134 – –
omolon hub 171 230 136 522
kyzyl project kazakhstan 168 – – –
khakanja hub 83 98 01 250
voro 52 – – –
subtotal 2005 1180 355 874
greenfield  brownfield 
total 2688 2204 2291 1385
1
 restated data
map key
exploration project
hub
standalone mining operation
development project
head office
 citytown
seaport
 
strategic report governance financial statements appendices
38 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 39 focused on building  
a sustainable future
sustainability
our core objective is to  
create sustainable returns for 
shareholders while fulfilling our 
corporate responsibilities to 
society and the environment
in this way we balance our 
business interests with the 
interests of our people suppliers 
investors local communities  
and other stakeholders and  
it is this balance which ensures 
the longterm success and 
sustainability of our operations
stakeholder engagement and material issues
in our approach to sustainability we want to address the issues 
that matter most to our business and to our stakeholders to 
this end we follow the principles of materiality and stakeholder 
inclusiveness that are set out within the gri g4 prioritisation 
guidelines we carry out regular stakeholder mapping exercises 
to determine the various stakeholder groups on which polymetal 
has the biggest impact once identified we then engage with 
these stakeholders and collate all ensuing dialogue this enables 
us to understand the issues most material to each group and to 
incorporate their opinions and priorities into our decision making 
and policy development 
through our stakeholder engagement and materiality mapping 
activities we have identified our core sustainability focus areas 
which are shown above
see our materiality matrix in the sustainability report 20132014 
for more information
sustainability risk management
our approach to sustainability is also underpinned by rigorous 
risk management policies and procedures informed by our 
interaction with stakeholders we work to identify manage and 
mitigate the sustainability risks we face this process is overseen 
by the audit and risk committee of the board reflecting the 
importance we place on sustainability within the company
environmental performance
polymetal as a typical mining business operates complex 
processes on a large scale in remote locations these 
processes produce a range of waste materials and use  
toxic substances such as cyanide like any other mining 
company we also produce significant quantities of emissions 
and carry out processes that can have potentially negative 
environmental impacts
to control these impacts we have developed a robust 
environmental management system ems that complies  
with increasingly sophisticated national and international 
standards and regulations this system is overseen by 
dedicated environmental teams and focuses on resource  
and energy efficiency pollution prevention use of modern 
equipment and technologies and employee engagement
at the heart of the management system is our environmental 
policy which can be viewed at wwwpolymetalinternationalcom 
it emphasises the use of best practice continuous improvement 
risk reduction compliance and management of specific 
environmental issues it also focuses strongly on incident  
and emergency control the use of environmentally friendly 
materials and resource efficiency
our approach
2014 represents a milestone on our sustainability journey  
this year we are adopting the most recent version of the  
global reporting initiative gri sustainability reporting 
guidelines within this g4 framework the main focus is 
‘materiality’ – in other words those issues that matter most  
to our business and our stakeholders compliance with g4 
does not become mandatory until the end of 2015 so we are  
making this transition ahead of schedule this is a sign of our 
commitment to continuous improvement and best practice  
and demonstrates our willingness to engage with clear and 
accountable reporting practices in support of this in 2015  
we have recruited a chief sustainability officer whose role  
will involve coordinating our diverse sustainability initiatives 
and activities
polymetal’s overall approach to sustainability is guided  
by the un global compact to which the company has been  
a signatory since 2009 our strategy is designed to meet the 
requirements of this voluntary international standard and ensure 
compliance with its ten principles in the areas of human rights 
labour environment and anticorruption we are also an active 
member of the uk global compact network russia
the un global compact and our corporate values –  
dialogue compliance ethical conduct fairness stewardship 
and effectiveness – shape the focus of our more detailed 
sustainability policies and associated management systems 
these polices are defined at group level and implemented 
through our head office in st petersburg and subsidiary 
companies through ongoing monitoring and auditing  
we ensure that our performance is measured against  
all relevant regulatory and internal requirements
each of our subsidiary companies has its own environmental 
team these teams contribute to the running and monitoring  
of the ems and provide quarterly performance reports to  
the group meanwhile our inhouse engineering operation 
polymetal engineering employs more than 100 specialists  
to ensure that uptodate practices and modern technologies 
are used in the design and construction of mines and 
processing facilities 
across the group we incorporate regular auditing and monitoring 
activities into the environmental management system we also 
comply with the requirements of relevant russian and kazakh 
legislation and iso 14001 external audits are regularly 
undertaken by state supervisory authorities such as the russian 
federal service for supervision of natural resource usage while 
audits conducted by service providers such as bureau veritas 
help us to improve our internal environmental management and 
performance during the reporting period we received no 
significant fines or nonmonetary sanctions for noncompliance 
with environmental laws and regulations
environmental compliance
we comply with stringent environmental impact assessment 
procedures which include public hearings and adequate 
mechanisms to enable stakeholders to share their grievances 
our ongoing stakeholder engagement activities also provide 
forums for stakeholders to voice concerns in 2014 there were 
no new major grievances filed about our environmental impacts
all of our suppliers comply with applicable laws and regulations 
in our formal contractual agreements we insist that our 
suppliers meet their compliance requirements 
investment in environmental protection
our overall investment in environmental protection during the 
reporting period was us135 million a slight increase from 
us134 million in 201112 of this total 51 went into the 
protection of water resources 32 into land reclamation  
and 17 into the reduction of atmospheric emissions
however investment in 2014 decreased to us5 million in 
comparison with us7 1 million in 2013 partially due to the 
completion of construction and rampup of the environmental 
protection facilities at polymetal’s new operations and partially 
due to currency devaluation 
the balance comprises quarterly payments we make to 
governments in the regions we operate for the negative impact  
on the environment caused by our business the amounts of 
these payments are governed by environmental law and are 
defined by specialised government agencies through the  
audits they conduct regularly at our operation sites
our sustainability focus areas 
  maintaining positive  
working relationships  
with local government  
ngos and communities by 
enhancing our partnership 
agreements and increasing 
the effectiveness of 
our investments
  improving our health and 
safety system through more 
sophisticated visualisation 
risk management systems 
and more rigorous 
monitoring within the 
company and with our 
supplier network
  attracting and retaining  
more highquality people and 
improving the quality and 
terms of their employment
  enhancing the rigour  
and transparency of our 
communications with 
suppliers customers 
and partners
  further developing our 
certified environmental 
management system and 
embedding the system  
into production operations
  cost and energy  
efficiency programmes
sustainability report 201314
this section of our annual report presents an overview of polymetal’s sustainability approach and 
performance in 2014 we have also published a full sustainability report 20132014 which provides  
more detailed coverage 
the scope of the sustainability report covers all of our whollyowned operating mines and processing sites  
in russia and kazakhstan dukat omolon amursk albazino mayskoye khakanja voro and varvara  
our headquarters in st petersburg and our subsidiary companies we own and operate all of these entities 
and have direct control over their policies procedures and performance 
this report and copies of our previous reports are available on our website along with regular updates about  
our sustainability activities during the year wwwpolymetalinternationalcomsustainabledevelopment
strategic report governance financial statements appendices
40 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 41 striving for greater efficiency 
and minimising negative impact
sustainability
kyzyl environmental assessment
international environment and social consultants are 
undertaking a detailed review of the environmental and  
social issues related to the kyzyl gold project in northeastern 
kazakhstan a formal esia report along with the project 
feasibility study will be issued in q4 2015 which will outline 
priority action areas and benchmark the project and the 
embedded environmental programme this will ensure that any 
environmental and social impacts are addressed in line with the 
international finance corporation performance standards and 
world bank environmental health and safety guidelines
key environmental projects in 2014 
during 2014 we made good progress in our environmental 
management programmes
the five main projects undertaken during the year
•	 the construction of advanced stormwater and wastewater 
purification units at amursk birkachan and mayskoye 
was completed
•	 mine site rehabilitation at yurievskoye was completed
•	 improvements were made in water treatment efficiency  
and reduction of water consumption at voro
•	 we started waste oil combustion at albazino mayskoye and the 
omolon hub in order to heat onsite buildings and spaces and
•	 we instigated tailing dump reconstruction with artificial damp 
bed freezing at lunnoye
waste management
across our operations we are committed to responsible waste 
management we operate systems and procedures that are 
designed to maximise the amounts we recycle and minimise 
potential impacts on people and the environment
we deal with the production and consumption wastes  
we generate by reutilising them in our own production
processes outsourcing them to specialist companies  
and disposing of them within our own waste facilities 
overburden and tailings
the most significant waste streams linked to our operations  
are overburden and tailings which account for more than 99 
of total arisings by volume the former is material extracted to 
uncover ore deposits the latter a byproduct of ore processing 
in 2014 we produced a total of 68 million tonnes of overburden 
and 11 million tonnes of tailings
recycled materials
wherever possible we try to recycle the waste we produce  
in 2014 this accounted for 20 of total waste produced 
cyanide and hazardous waste management
we pay particular attention to the way we monitor and manage 
cyanide since it generates hazardous waste components during 
the recovery of gold from the ore we process in 2014 we used 
8002 tonnes of cyanide compared with 7 369 tonnes in 2013 
our approach involves
•	 identifying all associated hazards
•	 strictly controlling all cyanide levels in our tailings
•	 monitoring air soil surface and ground waters
•	 providing environmental monitoring results to public 
authorities and
•	 delivering environmental protection measures including the 
design construction and monitoring of tailings dams and the 
monitoring of water sources and quality riverbed changes 
and associated drainage
additionally when we use cyanide we use 100 of the volumes 
purchased to ensure there is no waste element cyanide also 
exists in our processes as a chemical compound found in gas 
water and in solids which we later purify
in line with our commitments in this area we take a rigorous 
approach to the transportation of hazardous materials  
in 2013 and 2014 we did not transport import or export  
any waste deemed hazardous under the terms of the  
basel convention 2 annex i ii iii and viii
water
we withdraw significant volumes of water for use across our 
business all water is reused treated and discharged as 
effluent to surface water or is treated and stored in tailings 
dams we capture all water consumption and discharge data 
using water meters flow meters and indirect measuring
we have consent from local and state authorities to withdraw 
water from a wide range of sources adjacent to our operating 
sites due to the wide geographical spread of our operations 
we are able to ensure that our usage does not place undue 
demands on any one water source and always remains within 
acceptable withdrawal limits we also withdraw very little from 
surface water bodies such as rivers or springs indeed around 
90 of our water sources are underground and our annual 
average volume of water withdrawn from surface bodies does 
not exceed 10 those surface sources we do use are located 
away from environmentally sensitive areas or those areas where 
water sources are of high value to local communities and 
indigenous peoples
performance
during 201314 we made good progress in our environmental management programmes
the major projects carried out in this period included land rehabilitation environmental monitoring industrial waste recycling  
the construction of waste storage areas the repair and replacement of gas purification and exhaust systems and the control  
of dust emissions
ghg emissions  
co 2 equivalent  
tonnes per 10 kt  
of ore processed
due to the remote locations of our operations we rely heavily  
on diesel fuel for power generation these diesel generators plus  
the use of natural gas and coal for heating and fuel for vehicles 
account for the bulk of ghg emissions the significant drop  
in emissions per unit for 2014 is evidence of our increasing  
carbon efficiency
2013 2 014
675
642
total air emissions 
tonnes per 10 kt  
of ore mined
stripping mined waste storage ore processing and energy use 
generate air emissions these emissions include nonorganic dust 
carbon dioxide and nitrogen and sulphur oxides
2013 2 014
75
62
major waste 
components  
tonnes per tonne  
of ore mined
overburden and tailings are the primary waste materials arising 
from our operational activities we operate against a set of 
procedures that are designed to maximise volumes of recycled 
materials and minimise our potential impacts on people and 
the environment
2013 2 014
78
58
discharges to  
surface water 
thousand cubic  
metres per 10 kt  
of ore processed
across our operations we aim to reduce discharge intensity 
improve the quality of water discharged enhance the efficiency  
of water use and increase recycling any increases are due  
to growth of incoming waters in our open pits
2013 2 014
43
53
energy intensity  
gigajoule per 10 kt  
of ore processed
polymetals remote subsidiaries must generate their own sources  
of electricity and heat which currently necessitates significant use  
of diesel however we are constantly reviewing costs environmental 
impacts and alternatives and the increase in 2014 is the result of the 
change from diesel to electricitypowered equipment
2013 2 014
765
791
read more about our performance in each of these areas on the following pages
ghg emissions intensity co 2 eq t10 kt of ore processed 
2012 2013 2014
696
675
642
strategic report governance financial statements appendices
42 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 43 dedicated to improving our 
performance and systems
sustainability
health and safety
polymetal operates 120 production sites and processes 
including open and underground mines geological exploration 
sites ore processing and explosives depots each of these sites 
has its own inherent risks and in russia and kazakhstan 92 of 
our production facilities are deemed ‘hazardous’
our people work in challenging conditions and remote locations 
where it can be difficult to enforce stringent safety procedures 
however each year as our operations expand we are learning 
more about how best to engage our people with health and 
safety issues and to promote a ‘zero harm’ culture in which 
everyone takes responsibility for personal safety and wellbeing
our overall approach is set by the company’s health and  
safety policy and underpinned by our employee protection and 
workplace safety management system we also follow best 
practice in our management of industrial risks to protect our 
employees and safeguard the interests of local populations
we comply with the health and safety legislation of the states 
and regions where we operate and we meet all relevant 
international requirements indeed our employee protection and 
workplace safety management system is based on the most 
uptodate health and safety standards including iloosh 
2001 ohsas 18001 and gost r 1200072009
it is with the deepest regret therefore that we report that during 
2014 there were three fatalities across the group there was 
also one workplace fatality at a contractor’s site we extend our 
deepest condolences to the families and friends of those who 
lost their lives and pay tribute to the hard work and commitment 
of the men who died we are of course covering all related costs 
and providing extended financial support to the families of 
the deceased
there were also eight nonfatal accidents across the polymetal 
group in 2014 any fatality accident or injury within our operations 
is wholly unacceptable we have to do more to reduce workplace 
risks and improve the health and safety performance of our 
employees and contractors we aim to return to our previous 
record of zero fatalities across all sites and operations
our analysis shows that the rise in the number of workplace 
accidents was partially attributable to the increased scope of 
underground mining at our operations in complex geotechnical 
environments in response we have been quick to increase the 
level of training hazard visualisation and use of safety videos 
across our operations – particularly for those workers in 
highrisk roles such as blasters shaft miners and shaft 
timbermen we are also taking further actions to extend 
personal safety and risk awareness across our operating mines 
and devising corrective and preventative measures in relation  
to each specific accident
we are implementing a range of new safety measures and 
actions designed to enhance our existing occupational health 
and safety management system ohsms
•	 updating our ohsms policy and objectives
•	 changing underground mining technology
•	 carrying out a comprehensive analysis of all workrelated 
injuries and their causes
•	 conducting a rigorous assessment of our ohsms to identify 
inefficiencies and weak points
•	 an external ohsms audit by bureau veritas
•	 appointing new personnel to oversee health and safety  
at certain mine sites and
•	 launching an upgraded shiftbyshift risk assessment system
health and safety performance
company statistics
2014 2013
total accidents 11 11
– fatal 3 1
incidents 1 0
occurrences 25 24
ltifr 065 059
fifr 018 006
suppliers and contractors
all contractors working onsite at polymetal operations must 
comply with our health and safety regulations as stipulated in 
our health and safety management system these obligations –  
and the penalties for noncompliance – are clearly defined in all 
our contracts
contractor statistics
2014 2013
total accidents 7 7
– fatal 1 0
occurrences 13 22
ltifr 14 12
fifr 02 0
definition of hs terms
accident an unfortunate event that occurs in the course of work on the way to or from work 
or in a company vehicle which leads to mental or physical harm
incident an event that gives rise to an accident or has the potential to lead to an accident  
for example an unexpected explosion andor the release of dangerous substances
occurrence a failure near miss or dangerous event
ltifr lost time injury frequency rate per one million hours worked
fifr fatal injury frequency rate per one million hours worked
regardless of location our overarching aim is to reduce the 
amount of water we use per unit of output in addition we aim 
to reduce to the absolute minimum the volume and impact of 
liquids discharged into watercourses while maximising the 
safety of our tailings dams
during 201314 the total amount of ore mined by polymetal 
increased yearonyear by 32 meaning the total amount of 
water used across our operations also increased
over the past three years the volume of water reused by all 
group companies has averaged 87 of the total withdrawn 
the remaining proportion is treated and discharged to surface 
water in accordance with the requirements of russian and 
kazakh environmental legislation we have discharge permits 
and agreements in place and the quality of our discharge water 
complies with target indicators
energy
polymetal’s mining operations are energy intensive in addition 
operating in remote locations with no access to grid power and 
extreme weather conditions we are reliant on diesel fuel for 
heating and powering equipment and vehicles diesel and gas 
purchased from thirdparty suppliers account for the majority  
of our total direct energy consumption we also use coal which 
we mine at our production sites
energy efficiency and savings
we obviously need to develop and maintain our own power 
infrastructure whilst at the same time promoting energy 
efficiency and savings across our operations in 2014 we saved 
1495 tonnes of diesel we are also investigating longterm 
options for renewable energy use
greenhouse gas emissions
our operations produce direct greenhouse gas ghg 
emissions through the generation of heat and electricity from 
diesel generators the burning of natural gas and coal and the 
use of industrial and household landfills
we use established international methodology to calculate our 
co
2
 emissions in 2014 direct co
2
 emissions resulting from our 
operations amounted to 304 kt compared with 327 kt in 2013
indirect emissions and other pollutants released during 
production processes are shown in the following table
greenhouse gas emissions
1
2014 2013
total ghg emissions t 725226 725366
– direct ghg emissions
2
 t 304248 327222
– indirect ghg emissions
3
 t 420978 398144
ghg emissions intensity  
co
2 
eq t10 kt of ore processed 642 675
other pollutants
2014 2013
sulphur dioxide sox 304 276
nox nitrogen oxide  dioxide 1493 1358
inorganic dust solid particles 4125 3750
carbon monoxide co 1852 1684
1
  from 1 january 2013 the group began calculating co 2 emissions according to the 
reference book ‘international greenhouse gases emissions inventory methodology’ 
developed by a zinchenko from the scientific and production corporation atmosphere  
in st petersburg in 2003
2
  direct emissions include co 2 equivalent emissions produced by combustion of fuel diesel 
fuel petrol gas coal and use of electric power when operating own powergenerating 
facilities automobile transport main and auxiliary mining equipment
3
  indirect emissions include co 2 equivalent emissions that relate to the generation of power 
purchased imported by the company’s operations
biodiversity management
we make concerted efforts to minimise our impact on flora and 
fauna and we do not operate in or adjacent to protected or 
vulnerable areas of land or bodies of water neither do we 
operate on or adjacent to land identified as having natural 
historical or cultural value for indigenous minorities of the  
north imn
key plans for 20152017
we have also identified a number of projects on which  
we will be focusing our attention in 2015
•	 rehabilitation of the pits in the ozerny area
•	 reconstruction of the dump facility for solid domestic  
and industrial waste in lunnoye
•	 increased throughput of the emergency and storm 
wastewater purification station at voro
•	 construction of a sewage collector from the amursk pox  
plant to a mechanical sewage purification station and
•	 recycling of industrial waste in mayskoye
health and safety performance
14
2010 2011 2012 2013 2014
● minor injuries   ● severe injuries   ● fatalities   ● ltifr
4
6
9
2
10
1
8
2
1
190
070
059 059 065
6
2
3
strategic report governance financial statements appendices
44 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 45 sustainability
training motivation and reward  
at the core of our activities
employees
as we expand our operations we are looking to develop  
our stable loyal and motivated employee base each year we 
strengthen our internal talent pool increasing the scope of our 
employees’ expertise and building our leadership capabilities  
for the future we also pay competitive salaries and provide 
equal terms of recruitment employment and promotion  
making polymetal a highly attractive place to work
indeed we believe that by providing an environment in which 
our employees feel well looked after rewarded and listened  
to we can continue to develop the workforce we need to meet 
our longterm business goals as a key stakeholder group  
our employees expect a certain standard of behaviour from  
us in return our employees are expected to adhere to our 
company code of conduct which covers all aspects of hr  
and development as well as our commitment to the un global 
compact and international labour organisation principles
salaries and benefits
we strongly believe in acknowledging and rewarding our 
employees’ achievements we offer competitive and fair rates  
of pay and benefits to ensure we can attract and retain the best 
people our levels of salary and remuneration exceed regional 
averages in all our areas of operation while our longterm 
incentives are linked to employees’ performance and potential
within the company our remuneration structure is built around 
a base salary which comprises a fixed salary and allowance 
based on an employee’s qualifications and personal attributes 
for operational staff we provide a timepaid salary which  
is calculated according to the number of hours worked the 
amount of work done and monthly and annual allowances 
based on performance and available funds with these 
measures we comply with and exceed all legal requirements  
in russia and kazakhstan
gender diversity
we do not believe that the skills and talent required for the 
business are genderrelated we proactively work to recruit  
and encourage women within the business
in 2014 the proportion of women working in the group was 
22 women represent 22 of board members 22 of  
senior management positions and 43 of qualified employees
employee turnover
in recent years we have managed to significantly reduce  
our average employee turnover rate including flyinflyout 
operations this was down to 114 in 2014 compared  
with 185 in 2013
anticorruption
through the polymetal code of conduct we take a rigorous 
stance on anticorruption we educate our employees on 
preventing corruption and its potential impact on our business 
in 2014 3000 polymetal employees including all regional 
managing directors attended a total of 66 anticorruption 
seminars we also have measures in place to help minimise 
corrupt practices and fraudulent transactions among our 
workforce our contractors and our suppliers 
human rights
as supporters of the un global compact and through  
our own corporate values defined in the polymetal code  
of conduct we apply human rights principles rigorously  
for all our employees we respect the human rights and 
preserve the cultural heritage of the indigenous communities  
in areas where we operate in keeping with the un declaration 
on the rights of indigenous peoples we also seek to  
influence our partners contractors and suppliers to apply  
the same standards 
 
communities
geographically the scope of our operational activities is vast  
it encompasses the magadan region khabarovsk territory  
the chukotka autonomous territory northern urals and 
kazakhstan and is expanding every year in these areas  
this means that our interactions with local populations are 
widespread and diverse 
as an employer we provide local employment opportunities 
across all our sites and facilities we commission and use  
local services helping to stimulate local economies and  
supply chains 
during 2014 despite macroeconomic headwinds we sustained 
stable wage growth across the group in line with inflation 
maintaining our position as an attractive employer in the labour 
market in the regions where we operate we also continued  
to deliver improvements to employees’ working conditions 
especially for those undertaking shiftwork in remote areas with 
severe climates key achievements included the construction  
of a modern workers’ dormitory in mayskoye comprehensive 
repair of dormitories at dukat and the commissioning of 
stateoftheart sports facilities in some of our more 
remote locations
training and development
we invest in training and development to enhance the 
capabilities of our people our training programmes are 
designed to create the workforce we need to meet our 
operational and strategic goals and to offer our employees 
opportunities for career progression using both our own 
specialist instructors and external suppliers we offer general 
management and technical training at our corporate training 
centre in st petersburg and at the teaching facilities available at 
most of our sites this is supplemented by the training modules 
provided by our distancelearning system we also nurture 
future generations of skilled managers through our talent pool
we invested us07 million in 2014 2013 us05 million  
in professional training across all disciplines this means  
that 9626 employees received some form of professional 
development training during the year in 2014 the average 
number of hours of training for managers and qualified 
employees was 49 and 72 hours per person respectively  
the average hours of training for all other employees increased 
from 111 to 139 reflecting the good work done in this area
of course our operations also generate waste materials and 
emissions however we have robust measures in place to 
manage and mitigate these impacts and go beyond our 
regulatory obligations to ensure our operations do not  
adversely affect local communities or environments
we believe that longterm sustainable development is 
underpinned by the effective management of social investment 
our social investment initiatives are guided by industry 
benchmarks and standards and extend to all territories where 
we conduct exploration and production activities in the last five 
years the scope of our social investments has increased with  
a total of us24 million invested in local projects from 20102014 
in 2015 we plan to spend us55 million on social support and 
territorial development programmes
our investment priorities are determined through open dialogue 
with local communities as part of this process we carry out 
indepth analysis of local people’s needs and work with them  
to understand how social investment could best bring positive 
change to their lives together we identify the most pressing 
local issues and define the scope of the support required
investments and related targets are approved annually by the 
polymetal management and board of directors decisions are 
made based on a project’s potential to improve the quality of life 
for local people with a focus on the following areas
•	 healthcare and education
•	 infrastructure
•	 sport and lifestyle
•	 culture and creative potential
•	 indigenous minorities of the north imn and
•	 environmental protection
social investments in 2014 
● sport 43
● education 24
● cultural heritage and traditions 12
● infrastructure in communities 12
● imn support 6
● health 3
polymetal salaries compared to regional and industry 
wages 201314
2013 2014
● polymetal average   ● regional average   ● industry average
polymetal’s salaries were 
270 higher than across 
the regional average
150 higher than across 
the industry average
254 higher than across 
the regional average
147 higher than across 
the industry average
gender composition 
● male  ● female
2012 2013 2014
23
77
22
78
22
78
43
57
44
56
43
57
senior management qualified personnel
2012 2013 2014
training 20132014 number of employees trained
2013 2014
 inhouse training 
● mining it centre   
● polymetal inhouse regional centres
● distance learning programme
● outsourced training centers
46
28
13
13
46
26
10
18
4280 5346
strategic report governance financial statements appendices
46 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 47 financial review
highlights
•	 revenue for the year ending 2014 was us1690 million largely unchanged from 2013 yearonyear despite average realised 
gold and silver prices decreasing 7 and 18 respectively yearonyear the price decline was largely offset by a 7 increase  
in the volume of gold equivalent sold during the period
•	 group total cash cost
1
 tcc was us634gold equivalent ounce ge oz down 15 from 2013 due to a robust operational 
performance resulting in higher average grades processed and increased throughputs across the portfolio coupled with 
significant russian rouble and kazakh tenge depreciation against the us dollar total cash costs in the second half of the year 
increased slightly by 2 to us641ge oz versus the first half of 2014 driven by production from mayskoye with cost levels higher 
than the group average
•	 allin sustaining cash costs
1
 decreased by 18 yearonyear to us893ge oz as a result of reduction in total cash costs during 
the period combined with increased production levels and an associated reduction in per ounce sustaining capital expenditure  
at operating mines
•	 adjusted ebitda
1
 was us685 million an increase of 15 yearonyear driven predominantly by strong cost performance and 
production growth offsetting the decline in commodity prices adjusted ebitda margin was 41 compared with 35 in 2013
•	 underlying net earnings for the year adjusted for the aftertax amount of impairment chargesreversals and foreign exchange 
loss were us282 million 2013 us179 million as a result of noncash foreign exchange losses the group recorded a net 
loss for the year of us210 million in 2014 2013 us198 million
•	 net debt was us1249 million including the liability for the special dividend payable an increase of 20 versus the 2013  
levels as the company raised an additional us3185 million of debt for the acquisition of the kyzyl gold project in kazakhstan 
completed on 4 september 2014 while continuing to generate free cash flow and pay dividends net debtadjusted ebitda 
was 182 31 december 2013 175 free cash flow for the year
1
 was us306 million an increase of more than twofold 
compared with 2013
•	 a final dividend of us013 per share representing 30 of the group’s underlying net earnings for 2h 2014 is proposed  
by the board which in accordance with the current dividend policy has the discretion to declare a regular dividend when the  
net debtadjusted ebitda ratio is above 175 this will bring the total dividend declared for the period to us041 per share  
or us173 million
1
 the definition and calculation of nonifrs measures used in this report including adjusted ebitda total cash costs allin sustaining cash costs underlying net earnings net debt  
free cash flow and the related ratios are explained on the following pages
market summary
please see the market overview on pages 2223
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 changes in exchange rates therefore affect its financial results and performance both average 
monthly and periodend rubus exchange rates fluctuated heavily during 2014 a result of significant depreciation of the russian 
rouble against the us dollar by the yearend from 1 january to 31 december 2014 the russian rouble depreciated against the 
us dollar by 722 from 327 rubus to 563 rubus and the average rate was up 23 yearonyear from 318 rubus  
in 2013 to 384 rubus in 2014 the devaluation of the rouble had a significant negative noncash effect on the group’s net 
earnings in 2014 due to the effect of retranslating its us dollar debt which was partially offset by a more longlasting positive  
effect on the dollar value of the group’s roubledenominated operating costs and adjusted ebitda
financial highlights
2014 2013  change
1
revenue usm 1690 1707 1
total cash cost usge oz 634 745 15
allin cash cost usge oz 893 1086 18
adjusted ebitda usm 685 598 15
adjusted ebitda margin  41 35 6
average realised gold price usoz 1231 1326 7
average lbma gold price usoz 1266 1410 10
average realised silver price usoz 177 216 18
average lbma silver price usoz 191 238 20
loss for the year usm 210 198 6
underlying net earnings usm 282 179 57
return on equity  21 9 12
dividend payout ratio 
2
58 19 39
basic eps usshare 053 051 3
underlying eps usshare 071 046 53
dividend declared during the period usshare
3
036 032 13
dividend declared for the period usshare 041 009 nm
5
net debt usm 1249 1045 20
net debtadjusted ebitda 182 175 4
net operating cash flow usm 515 462 11
capital expenditure usm 210 319 34
free cash flow usm
4
306 138 122
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  
for the same reason this note applies to all tables in this section
2 
dividend payout ratio is calculated as percentage of dividend declared for the period to underlying eps
3 
fy 2014 final dividend for fy 2013 declared in march 2014 interim dividend proposed for 1h 2014 declared in august 2014 and special dividend declared in december 2014  
fy 2013 final dividend for fy 2012 declared in april 2013 and interim dividend proposed for 1h 2013 declared in august 2013
4 
free cash flow excludes cash payment for the kyzyl acquisition
5 
nm  not meaningful
operating results
see page 24
strategic report governance financial statements appendices
48 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 49 financial review
revenue
sales volumes
2014 2013  change
gold koz 943 808 17
silver moz 293 274 7
copper tonnes 1029 6141 83
gold equivalent sold
1
koz 1372 1285 7
1
 based on actual realised prices
sales by metal 
usm unless otherwise stated 2014 2013  change
volume
variance
usm
price
variance
usm
gold 1161 1071 8 180 90
average realised price usoz 1231 1326 7
average lmba closing price usoz 1266 1410 10
share of revenues  69 63
silver 520 593 12 43 115
average realised price usoz 177 216 18
average lbma closing price usoz 191 238 20
share of revenues  31 35
copper 7 41 82
share of revenues  0 2
total metal sales 1689 1704 1 115 131
other revenue 2 2 30
total revenue 1690 1707 1
in 2014 revenue decreased slightly by 1 yearonyear to us169 billion driven by a 7 decline in the average realised gold price 
while gold equivalent volume sold was up 7 gold and silver sales volumes increased by 17 and 7 yearonyear while 
production grew 17 and 5 respectively
the average realised price of gold was us1231oz in 2014 down 7 from us1326oz in 2013 and slightly below the average 
market price of us1266oz the average realised silver price was us177oz down 18 yearonyear and 7 below the average 
market price of us191oz due to a larger volume of polymetal’s sales recorded in the second half of the year when market prices 
had significantly deteriorated
the share of gold sales as a percentage of total revenue increased from 63 in 2013 to 69 in 2014 driven by production and 
sales volume movements and the relative decline in the silver price
copper sales were limited by the current weakness in the copper concentrate market resulting in a temporary shutdown of the 
flotation circuit at varvara
analysis by segment
revenue usm gold equivalent sold koz silver for dukat
2014 2013  change 2014 2013  change
dukat 486 532 9 27783 24865 12
voro 204 215 5 160 154 4
khakanja 158 203 22 125 148 15
varvara 120 190 36 95 140 32
omolon 277 223 24 219 162 35
albazinoamursk 299 294 2 236 230 3
mayskoye 145 50 193 141 48 194
other 1 2 na na na na
total revenue 1690 1707 1 1372 1285 7
the decline in gold and notably silver prices during the period affected revenues at voro and dukat respectively despite the 
increase in production volumes sales at omolon and albazino followed production growth while khakanja experienced some 
reduction in revenues due to lower production driven by the planned grade decline at varvara the decline in sales was driven  
by the weakness in the copper concentrate market and resulting production decline
cost of sales
cost of sales excluding writedowns of metal inventories  
usm 2014 2013  change
onmine costs 391 393 0
smelting costs 363 384 5
purchase of ore from third parties 2 33 95
mining tax 110 109 1
total cash operating costs 866 919 6
depreciation and depletion of operating assets 292 245 19
rehabilitation expenses 3 2 78
total costs of production 1161 1167 0
increase in metal inventories 142 54 163
writedown of nonmetal inventories to net realisable value 4 11 62
total change in metal inventories 138 43 219
cost of other sales 0 1 36
total cost of sales 1023 1124 9
revenue by segment
usm
● dukat  ● voro  ● khakanja  
● varvara  ● omolon  ● albazinoamursk  ● mayskoye 
1690
1707
2013
2014
486 204 158 277 120 299 145
532 215 203 190 223 294 50
continued
strategic report governance financial statements appendices
50 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 51 financial review
cash operating cost structure
2014 2013 
usm  of total usm  of total
consumables and spare parts 258 30 286 31
services 323 37 305 33
labour 169 19 180 20
other expenses 5 1 6 1
purchase of ore from third parties 2 0 33 4
mining tax 110 13 109 12
total cash operating costs 866 100 919 100
total cost of sales decreased by 9 in 2014 to us1023 million mainly on the back of decreased amounts of ore purchased from 
third parties at voro and varvara combined with russian rouble and kazakh tenge depreciation during 2014 this was partially 
offset by volumebased growth in production and sales 12 and 7 yearonyear respectively in gold equivalent terms and  
a significant increase in depreciation charges at mayskoye and omolon driven by larger mining and production volumes 
the cost of consumables and spare parts decreased by 10 and the cost of services remained almost flat despite meaningful 
production growth
the total cost of labour within cash operating costs in 2014 was us169 million a 6 decrease mainly stemming from a decline  
in the average number of employees at khakanja omolon and mayskoye
mining tax remained flat yearonyear at us110 million as production volume growth of 12 offset the decrease in average 
realised prices
depreciation and depletion was us292 million up 19 yearonyear mainly as a result of the full rampup of mayskoye as well  
as the revision of the mine plan at omolon triggering faster depreciation of capitalised stripping costs and depletion of mineral 
rights us36 million of depreciation and depletion expenses in 2014 related to ore and concentrate stockpiles was included  
in metal inventories as at 31 december 2014
in 2014 a net metal inventory increase of us142 million was recorded excluding writedowns to net realisable value the increase 
was mainly represented by the temporary increase in ore stockpiles at the omolon hub represented by lowgrade heap leach ore  
at birkachan ores at sopka where mining was completed ahead of schedule and at dalneye and accumulation of excess 
concentrate stockpiles at varvara
general administrative and selling expenses
usm 2014 2013  change
labour 93 107 13
sharebased compensation 2 24 92
services 17 19 11
depreciation 5 4 25
other 14 14 1
total 131 168 22
general administrative and selling expenses decreased by 22 yearonyear from us168 million to us131 million mainly because 
of the fall in roubledenominated labour and sharebased compensation costs
the us24 million of sharebased compensation recognised during 2013 represented the final accrual made in respect of the old 
longterm employee incentive programme old eip which was adopted in 2010 and had a vesting date of 11 june 2013 or at the 
discretion of the participants 11 june 2014 none of the options vested in june 2013 as the performance conditions the share 
price exceeding the strike price of us1674 per share were not met further in march 2014 the majority of employees waived  
their rights under the old eip in order to be able to participate in the new longterm incentive plan ltip however the expense 
previously recognised does not reverse as a credit to the income statement in accordance with ifrs rules as the nonvesting is 
related to a marketbased condition the first grant of options under the new ltip took place on 22 april 2014 and us2 million  
was recognised in sharebased compensation expense for 2014
other expenses
usm 2014 2013  change
mining taxes vat penalties and accrued interest 20 1 nm
exploration expenses 51 24 109
taxes other than income tax 22 21 5
social payments 9 11 14
housing and communal services 7 7 10
loss on disposal of property plant and equipment 4 10 53
business acquisition related costs 4 – nm
allowance of doubtful debt 0 1 nm
change in estimate of environmental obligations 1 1 32
other expenses 16 16 0
total 132 88 49
other expenses increased from us88 million in 2013 to us132 million in 2014 additional charges recognised in 2014 were 
recorded by the company in relation to various tax exposures and tax penalties and are related to the mining tax exposure of 
us11 million vat exposure of us2 million tax exposure at varvara in respect of the commercial discovery bonus of us3 million 
and penalties and interest related to income tax of us4 million for more information refer to note 12 of the consolidated 
financial statements
the increase in exploration expenses from us24 million in 2013 to us51 million in 2014 is mainly due to a higher amount  
of previously capitalised exploration costs being written off on a cash basis the exploration expenses were us16 million and 
us23 million respectively
total cash costs by mine
total cash costs per gold equivalent ounce
1
cash cost per ge ounce usoz
gold equivalent sold koz 
silver for dukat
2014 2013  change 2014 2013  change
dukat se oz
2
 87 116 25 27783 24865 12
voro 376 503 25 160 154 4
khakanja 704 756 7 125 148 15
varvara 705 791 11 95 140 32
omolon 570 879 35 219 162 35
albazino 625 790 21 236 230 3
mayskoye 966 957 1 141 48 194
total 634 745 15 1372 1285 7
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 including addition of treatment and refinery charges related to concentrate offtake 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 
2
 dukat’s total cash cost per gold equivalent was us621ge oz 2013 us732ge oz and was included in the group tcc calculation 
cash operating cost structure
usm
● consumables and spare parts  ● services  ● labour  
● other expenses  ● purchase of ore from third parties  ● mining tax  
866
919
2013
2014
258 323 169 5 2 110
286 305 180 6 33 109
dukat
1
116
voro khakanja varvara omolon albazino mayskoye total
87 503
376
756
704
791
705
879
570
790
625
957 966
745
634
total cash costs
usge oz
● 2013   ● 2014
1
silver equivalent oz for dukat
continued
strategic report governance financial statements appendices
52 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 53 financial review
in 2014 the total cash costs per gold equivalent ounce sold tcc were us634ge oz down 15 yearonyear the recent 
depreciation of the russian rouble had a meaningful positive impact on cost levels reported in us dollars which were supported  
by robust operating performance across polymetal’s operations
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 – 2013 745
domestic inflation 72 10
us rate change 194 26
auag ratio change 34 5
change in average grade processed by mine 0 0
change in recovery rate 5 1
change in share of sales between mines
1
 19 3
other internal factors 8 1
total cash cost per gold equivalent ounce – 2014 634 15
1
 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 25 yearonyear to us87oz beyond the effect  
of the rouble depreciation this decrease in cash costs has been achieved as a result of stable grades and solid improvement  
in throughput at both the omsukchan and lunnoye plants
•	 at voro which continues to be our lowest cost operation cash costs decreased further by 25 compared with 2013 to 
us376ge oz the key driver of cost dynamics was the discontinued use of purchased ore with relatively low grade and higher 
cost as well as higher recoveries at the cip plant and higher production at the heap leach facility
•	 khakanja’s tcc was us704ge oz a 7 decrease yearonyear this cost performance was supported by the significant 
devaluation of the russian rouble which offset the scheduled decline in average grade processed from 57 gt to 53 ge gt 
yearonyear
•	 at varvara tcc was us705ge oz decreasing by 11 yearonyear this performance was achieved on the back of a stable 
grade profile and significant devaluation of the kazakh tenge in early 2014
•	 at omolon tcc amounted to us570ge oz a 35 decrease yearonyear this strong performance was achieved on the back 
of 31 growth in average gold equivalent grade processed at the kubaka mill during the period from 51 gt to 67 gt as well  
as an 8 increase in kubaka mill throughput
•	 at albazinoamursk tcc was us625ge oz down 21 compared with 2013 this improvement was achieved on the back  
of steady mine performance increased capacity at albazino and the pox plant operating for a full year at design throughput and 
exceeding design recovery levels
•	 total cash costs at mayskoye were us966ge oz as the majority of sales were generated from concentrate offtake which  
is more expensive than concentrate processing at the pox plant
allin sustaining cash costs
1
total usm usge oz
2014 2013  change 2014 2013  change
total cash costs 864 957 10 634 745 15
sga and other operating expenses not included in tcc 165 142 16 121 111 9
capital expenditure excluding new projects 138 256 46 101 199 49
exploration expenditure capital and current 51 41 24 37 32 17
allin sustaining cash costs 1218 1396 13 893 1086 18
finance cost 46 49 6 34 38 12
income tax expense 72 40 80 53 31 68
aftertax allin cash costs 1336 1485 10 980 1156 15
development capital 34 60 43 25 47 47
sga and other expenses for development assets 40 7 nm 29 5 nm
allin costs 1410 1552 9 1034 1208 14
1
 allin sustaining cash costs comprise total cash costs 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 the 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 sustaining cash costs amounted to us893ge oz in 2014 and decreased by 18 yearonyear with a decrease in total  
cash costs and reduction of per ounce sga and capital expenditure on the back of continued production growth
allin sustaining cash costs by mines were represented as follows
allin sustaining cash cost per ounce usoz 
2014 2013  change
dukat 109 139 22
voro 515 692 26
khakanja 909 1065 15
varvara 1049 1088 4
omolon 722 1322 45
albazino 901 1139 21
mayskoye 1134 2307 51
total 893 1086 18
impairment chargesreversals
2014 2013
goodwill – 76
mining assets – 125
metal inventories 39 153
investments in associates – 12
total impairment charges 39 366
reversals recorded in 2014 are related to ore in heap leaching piles workinprogress and metal for refinery previously impaired 
which was further processed or determined to be economic for further processing the reversals are mainly driven by the decline  
in unit cash costs required to bring the workinprogress stockpiles into saleable metal
continued
strategic report governance financial statements appendices
54 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 55 financial review
adjusted ebitda and ebitda margin
1
reconciliation of adjusted ebitda
usm 2014 2013  change
loss for the year 210 198 6
finance cost net 37 40 8
income tax expense 72 40 80
depreciation and depletion 260 238 9
ebitda 159 120 33
reversalwritedown of metal inventory to net realisable value 39 153 125
impairment of noncurrent assets – 201 100
impairment of investment in associate – 12 100
sharebased compensation 2 24 92
net foreign exchange losses 559 74 nm
change in fair value of contingent liability 23 8 180
rehabilitation costs 2 2 16
writedown of nonmetal inventory to net realisable value 4 11 62
gain on disposal of subsidiary – 9 100
mining taxes vat penalties and accrued interest 20 1 nm
adjusted ebitda 685 598 15
adjusted ebitda by segment
usm 2014 2013  change
dukat 230 229 0
voro 141 130 9
khakanja 60 85 29
varvara 45 74 40
omolon 142 64 124
albazinoamursk 133 103 29
mayskoye 28 4 nm
kyzyl 3 – nm
corporate and other and intersegment operations 91 82 10
total 685 598 15
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 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 add to the total shown
in 2014 adjusted ebitda was us685 million 15 higher yearonyear resulting in an adjusted ebitda margin of 41  
the increase was mainly driven by the 15 decrease in total cash costs which was partially offset by a 7 and 18 reduction  
in the average realised gold and silver price respectively adjusted ebitda increased at voro omolon and albazino while it 
decreased at khakanja due to the scheduled grade declines as well as at varvara due to lower sales volumes and increased costs 
the adjusted ebitda margin at mayskoye was 19 as most sales were derived from highcost concentrate offtake
other income statement items
polymetal recorded a net foreign exchange loss in 2014 of us559 million compared with us74 million in 2013 these unrealised 
noncash losses represent the appreciation of the group’s predominantly us dollardenominated borrowings against the russian 
rouble the functional currency of all group companies other than varvara whose functional currency is kazakh tenge the group’s 
average gross debt during 2014 was us1217 million fully denominated in us dollars while the us dollar appreciated against the 
russian rouble by 722 during the period from 327 rubus at 31 december 2013 to 563 rubus as at 31 december 2014
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 polymetal believes that the underlying matching of revenue cash flows against debt repayments and 
related interest represents an economically effective hedging strategy
net earnings earnings per share and dividends
the group recorded a net loss of us210 million in 2014 versus us198 million in 2013 the loss resulted from unrealised foreign 
exchange losses pretax amount of us559 million equal to an aftertax amount of us523 million
underlying net earnings excluding aftertax impact of impairment chargesreversals and foreign exchange losses were 
us282 million compared with us179 million in 2013 the increase in underlying net earnings was mainly driven by the increase  
in adjusted ebitda
basic earnings per share were a loss of us053 per share compared with a loss of us051 per share in 2013 underlying basic 
eps was us071 per share compared with us046 per share in 2013
in accordance with the company’s dividend policy the board is proposing to pay a final dividend of us013 per share representing 
approximately 30 of the group’s underlying net earnings for the period during 2014 polymetal paid a total of us65 million in 
dividends representing final dividends for fy 2013 and interim dividends for 1h 2014 in january 2015 polymetal paid an additional 
us84 million of special dividends on the back of strong free cash flow generation and a comfortable leverage position
capital expenditure
usm 2014 2013  change
dukat 25 37 33
mayskoye 18 54 67
varvara 14 21 34
khakanja 14 14 3
amurskalbazino 13 36 64
omolon 7 22 68
voro 7 8 21
kyzyl 1 – na
corporate and other 15 6 128
exploration 72 59 22
capitalised stripping 31 91 66
capitalised interest 5 6 15
total capital expenditure
1
223 357 38
1
 total capital expenditure includes amounts payable at the end of the period on a cash basis capital expenditure was us210 million in 2014 2013 us319 million the difference from 
capex on an accrual basis is mostly due to depreciation of us19 million 2013 us33 million capitalised into exploration and stripping assets
in 2014 total capital expenditure was us223 million down 38 yearonyear all of the group’s major investment projects are  
now complete following the launch of the mayskoye concentrator in april 2013 from 2h 2013 the bulk of the group’s capital 
expenditure has been related to stayinbusiness spending and exploration capital expenditure excluding stripping costs was 
us192 million in 2014 2013 us265 million
adjusted ebitda margin
usm
● 2013    ● 2014
dukat voro khakanja varvara omolon albazino
amursk
mayskoye kyzyl
corporate
and other
intersegment
operations
total
229 230
130 141
85
60
74
45
64
142
103
133
4
28
3 82 91
685
598
capital expenditure
usm
● dukat  ● mayskoye  ● varvara  ● khakanja  ● albazinoamursk  
● omolon  ● voro  ● kyzyl  ● corporate and other  
● exploration  ● capitalised stripping  ● capitalised interest 
223
357
2013
2014
25 72 31 5
37
18 14 14 13 771 15
54 21 14 36 22 8 6 91 59 6
continued
strategic report governance financial statements appendices
56 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 57 financial review
capital expenditure in 2014 was represented as follows
•	 across all mines capital expenditure declined yearonyear and was mainly represented by mining fleet upgradesreplacements 
and maintenance expenditure at the processing facilities
•	 the company continues to invest in standalone exploration projects capital expenditure on exploration in 2014 was us72 million 
compared with us59 million in 2013 and focused in addition to nearmine properties mostly on pgm assets maminskoye 
and kutyn
•	 capitalised stripping costs totalled us31 million in 2014 2013 us91 million and are attributable to operations with stripping 
ratios during the period exceeding their life of mine lom averages including most importantly varvara voro and khakanja  
the decline is mainly related to completion of major stripping campaigns in 2013 and
•	 total capital expenditure in 2014 includes us5 million of capitalised interest 2013 us6 million which has declined as the 
group has commissioned all of its major growth assets
cash flows
usm 2014 2013  change
operating cash flows before changes in working capital 614 450 37
changes in working capital 99 12 902
total operating cash flows 515 462 11
capital expenditure 210 319 34
kyzyl acquisition 315 – nm
other 1 5 124
investing cash flows 524 324 61
financing cash flows
net increase in borrowings 202 213 5
dividends paid 65 316 80
total financing cash flows 137 104 232
net decreaseincrease in cash and cash equivalents 127 34 276
cash and cash equivalents at the beginning of the year 66 19 252
effect of foreign exchange rate changes on cash and cash equivalents 36 13 369
cash and cash equivalents at the end of the year 157 66 139
operating cash flows in 2014 strengthened compared with the prior period operating cash flows before changes in working  
capital grew by 37 yearonyear to us614 million as a result of an increase in adjusted ebitda net operating cash flows  
were us515 million compared with us462 million in 2013 these were also affected by an increase in working capital in 2014  
of us99 million these increases are mainly due to additional ore stockpiles at omolon net increase of us72 million and 
accumulation of excess concentrate stockpiles at varvara net increase of us30 million
total cash and cash equivalents increased by 139 compared with 2013 and comprised us157 million with the following items 
affecting the cash position of the group
•	 operating cash flows of us515 million
•	 investment cash outflows totalled us524 million up 61 yearonyear and are represented by capital expenditure down  
34 yearonyear to us210 million and other investing cash flows represented by the cash portion of the kyzyl acquisition
•	 payment of regular dividends for 2013 and 1h 2014 amounting to us65 million and
•	 the net increase in borrowings of us202 million
liquidity and funding
usm
31 december 
2014
31 december 
2013  change
shortterm debt and current portion of longterm debt 509 81 528
longterm debt 814 1030 21
dividends payable 84 – nm
gross debt 1407 1111 27
less cash and cash equivalents 157 66 140
net debt 1249 1045 20
net debtadjusted ebitda 182 175 4
the group continues to maintain a comfortable liquidity and funding profile
the group’s net debt increased to us1249 million as at 31 december 2014 representing a net debtadjusted ebitda  
over the last 12 months ratio of 182 the increase is mainly attributable to debt financing of the kyzyl acquisition in 2h 2014
the proportion of longterm borrowings comprised 58 as at 31 december 2014 93 as at 31 december 2013
in addition as at 31 december 2014 the group had us10 billion 31 december 2013 us13 billion of available undrawn 
facilities of which us08 billion is committed from a wide range of lenders this ensures that polymetal maintains its operational 
flexibility in the current environment
the average cost of debt remained low at 35 in 2014 2013 299 supported by low base interest rates and the ability  
to negotiate competitive premiums given the solid financial position of the company and polymetal’s excellent credit history  
despite ongoing tightening of the credit markets in russia the group is confident in its ability to refinance the existing borrowings  
as they fall due in january 2015 the group negotiated a fouryear us100 million loan from a large european bank
2015 outlook
while we recognise that our financial performance is heavily dependent on the rubus exchange rate inflation in russia  
and oil price dynamics polymetal expects to deliver a resilient financial performance at the current price levels which will be driven 
by the following factors
•	 the company is fully on track to deliver on its production guidance of 135 moz of gold equivalent for 2015
•	 polymetal expects total cash costs in 2015 of us575625ge oz and allin sustaining cash costs of us750800ge oz
•	 capital expenditure in 2015 is expected to total approximately us240 million including exploration capitalised stripping and 
spending on the kyzyl project 
•	 as a result the company expects to continue to generate meaningful free cash flow and dividend payments in 2015
continued
strategic report governance financial statements appendices
58 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 59 effective risk identification  
and management
risks and risk management
risk management process
polymetal’s risk management process is 
designed to minimise the potential threats 
to achieving our strategic objectives
internal control and risk management 
systems are continuously enhanced to 
add value to our business
the risk management process 
incorporates the following stages
•	 identification and documentation  
of risks
•	 assessment qualification and 
quantification of each risk
•	 development and implementation  
of risk mitigationcontrol strategies
•	 monitoring reporting and reviewing 
risks and
•	 establishment and enhancement of 
effective internal control procedures
effective risk management 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 response as the global and local 
markets we operate in have demonstrated increased 
turbulence over the last several years the board 
placed greater emphasis on principal risk 
management in 2014
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 processes to identify and 
assess principal business risks and to 
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
•	 periodic ‘deep dives’ into significant risk 
areas and
•	 the timeliness of and reporting on the 
effectiveness of corrective actions 
taken by management
risk identification
risk awareness 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 natural 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 and assurance maps 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 quantitative and 
qualitative impact these may have on the 
business and the likelihood of the event 
see table opposite 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 the 
costs and benefits of possible mitigating 
actions a response is then determined 
and implemented to bring 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 and 
assurance maps are used to reevaluate 
and adjust controls in response to 
changes in the company’s objectives the 
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
risk matrix
impact
loss type insignificant minor moderate major catastrophic
harm to people slight injury or health 
effects – first aid
minor medical 
treatment level
minor injury or health 
effects – restricted 
work or minor lost 
workday case
major injury or health 
effects – major lost 
workday case
permanent disability
permanent  
total disabilities 
single fatality
multiple fatalities
environmental 
impact 
minimal 
environmental harm
material 
environmental harm
serious 
environmental harm
major  
environmental harm
extreme 
environmental harm
business disruption 
and asset damage 
and other 
consequential loss 
1 adjusted 
ebitda 
1 adjusted 
ebitda 
5 adjusted 
ebitda 
5 adjusted 
ebitda 
10 adjusted 
ebitda 
10 adjusted 
ebitda  
20 adjusted 
ebitda 
20 adjusted 
ebitda 
legal and 
regulatory 
low level legal issue minor legal issue 
noncompliance  
and breaches  
of the law
serious breach of 
law investigation
report to authority 
prosecution andor 
moderate penalty 
possible
major breach of the 
law prosecution and 
penalties applied
very considerable 
penalties and jail term
impact on 
reputation 
slight impact –  
public awareness 
may exist but no 
public concern
limited impact –  
local public concern
considerable  
impact – regional 
public concern
national impact – 
national public 
concern
international  
impact – international  
public concern
likelihood
rare unlikely possible likely almost certain 
the unwanted event has 
never been known to 
occur in the business  
or is highly unlikely to 
occur in the next 20 years
the unwanted event has 
happened in the business 
at some time or could 
happen within 20 years
the unwanted event could 
well have occurred in the 
business at some point 
within 10 years and may 
reoccur within 10 years
the unwanted event has 
occurred infrequently 
occurs less than once  
a year and is likely to 
reoccur within 5 years
the unwanted event  
has occurred frequently 
occurs one or more times 
per year and is likely to 
reoccur within one year
strategic report governance financial statements appendices
60 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 61 risks and risk management
residual risk level ■ high ■ medium ■ low residual risk level ■ high ■ medium ■ low
risk category risk description and potential effect risk response
1  
market risk
gold and silver price volatility may result  
in material and adverse movements in the 
company’s operating results revenues  
and cash flows
the company has developed and implemented plans  
to ensure consistent cash flow generation at operating  
mines including
•	 redistribution of ore feedstock among deposits to achieve 
better cost profile due to better grade profile better logistics  
or less expensive mining methods
•	 deferring the start of production while continuing ore stacking 
to achieve better cost profiles due to positive scaling effects
•	 managing the volume of thirdparty ore purchases
•	 staffing level review and hiring freeze
•	 assetlevel costcutting
reserve and resource prices as well as cutoff grades are 
adjusted at least annually to reflect the prevailing commodity  
price levels short medium and longterm lifeofmine plans  
are adjusted as appropriate
stress testing for conservative price assumptions is performed  
to ensure resilience of the operating mines in a stress scenario 
and continued value creation contingency action plans were 
developed to address performance in a stress scenario
currently the company does not hedge its commodity price 
exposure as its strategy is to offer stakeholders full exposure  
to potential gold and silver price upside potential
21  
production and 
processing risks –  
mining plans
the risk of failure to meet the planned 
production programme objectives failure  
to meet production targets may adversely 
affect operating performance and financial  
results of the group the risk of lower  
than expected metal grade or dilution  
is caused by complex mining and geological 
conditions mainly at underground mines 
recoveries at the group’s processing  
plants may not reach planned levels due  
to the complex technological properties  
of ore processed
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 engineering team’s 
senior management an approved production programme 
includes increased volume of operational prospecting works 
such as infill drilling and grade control sampling
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
22  
production and 
processing risks – 
production  
process supply by  
resources required 
raw materials  
equipment etc
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
23  
production and 
processing risks – 
production  
process staffing 
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 delays 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 45 of this report a positive corporate culture is actively 
promoted within the group
24 
production and 
processing risks – 
reliance on 
contractors
risk of underperformance against 
production plan exceeding available 
resources budget overspending  
delayed results
contractors’ performance control system is designed 
implemented and applied
risk category risk description and potential effect risk response
3  
tax risks
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 and to actively monitor the ongoing 
changes to the tax legislation in its countries of operation
given the prevailing practice accepted by arbitration courts when 
deciding on certain cases in tax disputes in 2013 and 2014  
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
a new antioffshore law has been enacted in russia from  
1 january 2015 the law introduces material changes into the 
taxation procedures for controlled foreign companies and 
establishes new criteria for beneficial ownership of income and 
tax residency in russia as all operating entities of the group are 
domiciled in russia and kazakhstan polymetal generates all  
of its revenues and profits and pays all related taxes in these 
countries therefore the company intends to comply with the  
new requirements in full and does not expect any material impact 
on the total tax expense of the group from the new law 
4  
exploration risks
exploration and development are time and 
capitalintensive activities and may involve 
high degrees of risk but are necessary for 
the future growth of the business failure  
to discover new reserves of sufficient 
magnitude could adversely affect the 
company’s future performance
risk and uncertainty are inherent for exploration and  
development activities
the group invests considerable amounts in focused exploration 
projects to obtain sufficient information about the quantity and 
quality of new reserves and to estimate expected cash flows  
the group’s team of geologists and engineering specialists  
has a strong track record of successful greenfield and brownfield 
exploration leading to subsequent development of exploration 
fields into commercial production
5  
construction and 
development risk
failure to achieve target returns from the 
major capital expenditure projects such  
as building new mines and processing 
facilities or production capacity increase
refurbishment at existing mines as a result 
of failure to meet project delivery timeline 
and budgets this can adversely affect the 
group’s financial results and cash flows
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
the methods of construction risk management are constantly 
improved including by the employment of worldclass consultants 
with recognised international experience
6  
logistics and  
supply chain risk
the company operates in remote locations 
that require complex transportation of 
material volumes of ore and goldsilver 
concentrates most of which is performed 
by third party contractors production 
targets may not be reached if any element  
of the logistics chain is disrupted
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
continued
strategic report governance financial statements appendices
62 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 63 risks and risk management
risk category risk description and potential effect risk response
7 
health and  
safety risk
health safety and environment risk 
includes regulatory compliance 
environment pollution and damage  
and personal safety
the company has an occupational and industrial safety control 
system including risk assessment of individual workplaces and 
protection of personnel with safety equipment
the company has tightened the responsibility for safety by 
making workers be more careful towards risk and developed 
additional security measures in relation to the recently identified 
insufficient compliance with safety requirements by employees
8  
environmental risk
major pollution arising from operations 
include deforestation air and water 
pollution land contamination potential 
impacts include fines and penalties 
statutory liability for environmental 
redemption and other financial 
consequences that may be significant
the company implemented a certified environmental 
management system which meets international standards
the company implements a number of initiatives to monitor and 
limit the impact of its operations on the environment including 
external expert assessment of pollution generated and adopting 
best practice in the industry on corporatelevel policies  
and procedures
9  
mergers and  
acquisitions
the group invests considerable amounts  
in precious metals assets and operations  
in russia 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 result 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 
in excess of us15 million
10  
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
risk category risk description and potential effect risk response
11  
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
financial and economic sanctions imposed 
in 2014 by the united states and the eu  
on certain businesses and individuals in 
russia have increased political tensions 
and increased economic instability there  
is a risk that further sanctions could impact 
the group’s ability to operate in russia  
or kazakhstan
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
sanctions imposed on russian individuals and businesses  
in 2014 have not currently had any direct influence on the group’s 
operations however at the same time they have meaningfully 
impacted both the macroeconomic situation in russia and 
interest rates for local and foreign borrowings
121  
financial risks –
liquidity risk
the inability to raise sufficient funds to  
meet current operating or ongoing financial 
needs or to develop new projects  
and growth
inadequate cash management in terms  
of cash flow forecast available resources 
and future requirements
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 the group 
ensures that significant undrawn committed facilities are  
in place to cover any funding gaps
122
financial risk – 
currency risk
the risk arises from company’s receipts 
from metal sales and foreign currency –
denominated debt as well as the foreign 
currencydenominated cost of imported 
capital goods and consumables
natural hedging is used to reduce the risk exposure revenue  
is matched with us dollardenominated debt
flexible budgeting is used to monitor the effect of exchange rate 
fluctuations on the group’s financial results
depreciation of the russian rouble and kazakh tenge in 2014 
against the us dollar and euro resulted in recognition of unrealised 
negative foreign exchange losses on revaluation of us
denominated debt however lower exchange rates resulted  
in a decrease of operating costs and higher cash flows from 
operations as most costs are denominated in local currencies 
123
financial risks – 
interest rate risk
the group is exposed to the interest rate 
risk as the significant part of the group’s 
debt portfolio is us dollardenominated 
floatingrate borrowings
based on analysis of the current economic situation the group 
has decided to accept the risk of floating interest rates rather than 
hedge 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 ongoing economic situation suggest this may be profitable
due to the financial sanctions imposed against some russian 
banking institutions in 2014 the overall level of interest rates  
in russia has increased considering this the company has 
revised the risk level by increasing it to average 
124
financial risks – 
inflation rate risk
a higher rate of inflation may increase  
future operational costs and have a 
negative impact on financial results if there 
is no related depreciation of the local 
currency against the 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 
the recent devaluation of the russian rouble which is likely to 
result in increased inflation levels has been factored in when 
preparing budgets and projections for subsequent years
residual risk level ■ high ■ medium ■ low residual risk level ■ high ■ medium ■ low
continued
strategic report governance financial statements appendices
64 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 65 maintaining strong governance
board of directors
1
 
bobby godsell
chairman of the board of directors
appointed 29 september 2011
previous experience president of the south african 
chamber of mines chairman of eskom chief 
executive of anglogold ashanti director of african 
barrick gold and solar capital chair of the board of 
optimum coal holdings acquired by glencore plc
qualifications ba from the university of natal and 
ma from the university of cape town
other roles chairman of business leadership south 
africa director of platmin limited member of the 
south african national planning commission and 
cochairman of the south african millennium labour 
council nonexecutive director of the south african 
industrial development corporation
committees chairman of the nomination committee
5
 
marina grönberg
nonexecutive director
appointed 29 september 2011
previous experience board member of jsc 
polymetal 20082012 various positions in banks 
and private equity firms
qualifications degrees in economics and  
finance and in law from moscow state law 
academy and in applied mathematics from  
moscow state university
other roles board member of waterstones holding 
hachetteatticus mig credit marenco swiss 
helicopters sparretail ann capital 
management fund and pik group managing 
director of ann schweiz member of 
management committee of ann capital 
management fund president of the charity  
fund named after nadezhda brezhneva
6
 
christine coignard
senior independent nonexecutive director
appointed 01 july 2014
previous experience 25 years’ experience in the 
banking industry and advisory services worldwide 
gained banking experience at royal bank of canada 
societe generale and citibank international 
consultant for the apogee gold fund based in boston 
project manager for interros in russia director of 
investments and financing for norilsk nickel  
managing director at hcf international advisers
qualifications business degree from école de 
management de lyon france and mba from the 
schulich school of business toronto canada
other roles managing director and founding partner 
of coignard  haas gmbh
committees member of the audit and risk 
remuneration and nomination committees
 ms coignard was appointed to the board effective  
1 july 2014 as an independent nonexecutive director 
further to the voluntary retirement of mr balfour as a director 
at the conclusion of the agm held on 21 may 2014
4
 
jeanpascal duvieusart
nonexecutive director
appointed 29 september 2011
previous experience managing partner for central 
europe and the cis at mckinsey joined mckinsey in 
1992 and worked in brussels new york and central 
europe before becoming managing partner in 
prague advisor to banks insurers and industrial 
companies in russia and central europe 
shareholder of ppf group nv since 2010
qualifications mba from the university of chicago 
and master’s degree in commercial engineering 
catholic university of louvain belgium
2
 
vitaly nesis
group chief executive officer
appointed 29 september 2011
previous experience jsc polymetal’s chief 
executive officer from 2003 member of its board 
20042012 ceo of vostsibugol 20022003 
strategic development director at the ulyanovsk 
automobile plant in 2000 head of the investment 
planning department at sualholding 20012002 
mckinsey in moscow 19992000 merrill lynch in 
new york 19971999
qualifications ba in economics from  
yale university
3
 
konstantin yanakov
nonexecutive director
appointed 29 september 2011
previous experience member of jsc polymetal’s 
board of directors 20082012 and member of its 
audit committee various positions at mdm bank 
cfo of jsc polymetal until 2004 member of the 
board at piraeus bank
qualifications mba from the london business 
school phd in economics from the russian state 
university of management degree in global economics 
from the government of russia’s finance academy
other roles chief financial officer of ict group 
director of llc ictcapital director of greek 
organisation of football prognostics sa opap sa 
director of o1 properties member of the supervisory 
board of rigensis bank member of the  
board of inbank and the nonstate pension  
fund ‘blagosostoyanie’
vitaly savchenko
chief operating officer
appointed 2009
experience director of the production department 
20072009 senior production technical and mining 
positions since 2004 chief underground mine 
engineer at priargunskoye mining and chemical 
company 19942003 recipient of second and 
thirdcategory miner’s glory medal
qualifications degree with honours in underground 
mineral mining engineering kyrgyz mining institute 
mba from the uk’s open university business school
sergey cherkashin
chief financial officer
appointed 2005
experience cfo of the timashevsk dairy plant 
sales director of the ulyanovsk automotive plant 
deputy ceo of development at the volgograd  
dairy plant consultant for at kearney in moscow
qualifications mba from the university of hartford 
degree in applied mathematics from the moscow 
institute of physics and technology
sergey trushin
executive vicepresident mineral resources
appointed 2010
experience chief geologist at the khabarovsk 
exploration company 20082010 chief geologist  
at albazino resources 20062008 and various 
positions at albazino resources since 1998 
geologist with dalnevostochnie resources 1997 
geologist with the production geological association 
‘dalgeology’ and the nizhneamursk exploration 
expedition in the preceding six years
qualifications degree in geological surveying  
and mining engineering exploration from the 
novocherkassk state polytechnic institute
roman shestakov
executive vicepresident project  
development and construction
appointed 2009
experience chief engineer at gold of northern 
urals 20072009 and a pit superintendent from 
2006 mine superintendent at the okhotsk  
mining and exploration company 20042005 
mining engineer in the production and technical 
department of jsc polymetal management  
in the preceding two years
qualifications honours degree in openpit mining 
from the mining department of the st petersburg 
state mining institute mba from the uk’s open 
university business school
valery tsyplakov
managing director polymetal engineering
appointed 2004
experience previous roles in polymetal deputy 
general director for mineral resources design  
and technology and senior roles in the production 
and technology and technological research 
departments 20002004 department head at  
the soviet union research institute of aeronautical 
automation and prior to this a guest scientist at 
aarhus university’s physics institute denmark 
research fellow in the plasma physics department 
of the moscow physics and engineering institute 
professional member of the institute of materials 
minerals  mining london
qualifications degree in experimental nuclear 
physics from the moscow physics and engineering 
institute phd in physics and mathematics
pavel danilin
executive vicepresident  
strategic development
appointed 2009
experience previous roles in polymetal director of 
corporate finance and investor relations head of 
corporate finance head of corporate finance at 
cjsc ict 20022003 deputy head of currency 
department and head of financial resources 
department at the kaliningrad branch of bank 
petrocommerce 19982001
qualifications mba from the university of california 
at berkeley haas school of business degree in 
economics and management from kaliningrad state 
technical university
igor kapshuk
chief legal officer
appointed 2009
experience previously worked in polymetal as  
head of the legal department since 2005 and 
deputy head since 2003 deputy general counsel 
head of the department for legal matters and  
head of claims department at the branch of siberia 
energy coal company and at vostsibugol irkutsk 
20012003 legal advisor for pharmasintez 
19992001 legal advisor and acting head of the 
legal department at the irkutsk teapacking 
factory 19971998 legal adviser at an insurance 
company irkutsk 19941997
qualifications degree from the law school  
of irkutsk state university
7
 
russell skirrow
independent nonexecutive director
appointed 29 september 2011
previous experience board member of jsc 
polymetal 20082012 total of 35 years’ work 
experience in the global mining industry and 
investment banking including ten years at merrill 
lynch in london as head of global metals mining  
 steel research and subsequently as global 
chairman of the metalsmining team and 12 years  
in gold fields ltd south africa and western mining 
corporation in australia and the usa chairman  
of dampier gold ltd 20102013
qualifications bsc with honours in geology  
from durham university and a phd from the  
royal school of mines imperial college london 
member of the institute of materials minerals  
mining with chartered engineer status and fellow  
of the financial services institute of australasia
committee member of the audit and  
risk committee
8
 
jonathan best
independent nonexecutive director
appointed 29 september 2011
previous experience more than 30 years’ 
experience in the mining industry board member  
of jsc polymetal 20062012 chairman of the  
audit committee of gulf industrials chairman  
of sentula mining and member of its nomination and 
remuneration committees chairman of goldstone 
resources interim ceo of transsiberian  
goldin 2006 cfo and executive director  
of anglogold ashanti
qualifications mba from the university of the 
witwatersrand johannesburg chartered 
management accountant acima associate of the 
chartered institute of secretaries and administrators
other roles nonexecutive director of anglogold 
ashanti holdings plc and member of its audit 
committee chairman of bauba platinum and 
member of its nomination and remuneration 
committees nonexecutive director and chairman 
of the audit committee of metair investments
committees chairman of the audit and risk 
committee member of the remuneration committee
9
 
leonard homeniuk
independent nonexecutive director
appointed 29 september 2011
previous experience board member of jsc 
polymetal 20102012 president ceo and  
member of the board of directors of centerra gold 
20042008 chair president and chief executive 
officer of polygon gold inc 20112014 held 
executive positions with centerra gold kumtor gold 
and cameco corporation
qualifications msc from the university of manitoba 
member of the ontario society of professional 
engineers the canadian institute of mining and 
metallurgy and the prospectors and developers 
association of canada honorary professor at the 
kyrgyz mining institute
other roles director of trade ideas llc
committees chairman of the remuneration 
committee member of the nomination committee
senior management
1 2
5
8
3
6
9
4
7
strategic report governance financial statements appendices
66 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 67 corporate governance
dear shareholders
this has been another difficult year for the industry but polymetal fared 
much better than many of its peers our longterm throughthecycle 
commitment to capital discipline was reemphasised during 2014 when 
increased free cash flow generation enabled us to pay another special 
dividend whilst retaining the ability to refinance debt with a comfortable 
leverage level prioritising shareholder returns and going beyond  
the minimum prescribed by our dividend policy in this way gives  
us a distinct competitive advantage over our peers the board of 
directors of polymetal believes that the acquisition of the kyzyl project 
in kazakhstan represents an excellent opportunity to expand the 
company’s existing reserve base through the addition of high grade 
gold deposits with an expected long mine life and significant exploration 
upside this acquisition received full support at the general meeting 
and is a longterm project that will generate substantial value for our 
shareholders the estimated capital expenditure for kyzyl is at the 
bottom of the guidance range and is not expected to impair either  
our balance sheet strength or our ability to sustain dividends
the board attaches great importance to maintaining good relationships 
and an ongoing dialogue with all shareholders to keep them informed  
of significant company developments the company continued its 
programme of communication with institutional investors and analysts 
throughout 2014 with regular presentations and webcasts helping 
them to gain a better understanding of polymetal its operations and 
strategy as well as opportunities to meet the senior management team
in july we welcomed christine coignard to the polymetal board  
as senior independent nonexecutive director her 25 years’ 
experience in global banking and advisory services with particular  
skills in corporate finance and investment banking is already proving  
a valuable asset to the board her presence increases the 
representation of women on the board to 22 reinforcing  
our policy to promote and encourage women across the business
providing effective and strategic leadership is vital to the continuing 
success of the business and in the best interests of its stakeholders 
we are mindful of the need for a meticulous approach to succession 
planning in order to achieve this
as part of our commitment to clear and accountable reporting practices 
we have adopted the most recent version of the global reporting 
initiative sustainability reporting guidelines for our recently published 
sustainability report 201314 compliance with the new g4 framework 
which has as its main focus ‘materiality’ – those issues that matter most 
to our business and our stakeholders – does not become mandatory until 
the end of 2015 so we are making this transition ahead of schedule
as the company evolves and grows so too does the need for good 
corporate governance as a board we uphold the principles of 
continuous improvement and the regular evaluation of our performance 
to ensure that we govern effectively in so doing we emphasise our 
commitment to all our stakeholders by ensuring that the highest 
standards of ethical and responsible behaviour underpin how polymetal 
runs its business
bobby godsell
chairman
statement of compliance with the  
uk corporate governance code
the directors are committed to maintaining high standards of corporate 
governance as a premium uk listed company during the year ended 
31 december 2014 polymetal international was required to comply with 
the uk code of corporate governance the uk code published in 
september 2012 and available through the uk financial reporting 
council’s website or where the provisions of the uk code have not  
been complied with to provide appropriate explanations during 2014  
the company was in compliance with all provisions of the code with  
the exception of the six week period from 21 may to 1 july 2014 
following the departure of charles balfour and until the appointment  
of christine coignard there were three independent directors out of  
a total of seven board members and in addition the audit and risk and 
remuneration committees comprised two independent nonexecutive 
directors noting that there were no meetings of either committee during 
this six week period the code states that at least half of the directors 
excluding the chairman should be independent provision b12 and  
that the audit and the remuneration committees should comprise at 
least three independent nonexecutive directors provisions c31 and 
d21 respectively
as well as complying with the uk code the company has complied 
with all applicable regulations of the moscow stock exchange and 
russian securities laws since admission of its shares to secondary 
trading on the moscow exchange
role and structure of the board
the company’s board comprises one executive director the non
executive 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 the independent directors 
on the board is to challenge the strategy and scrutinise the performance  
of management in meeting agreed goals and objectives to monitor  
the reporting of performance of the company to review the integrity  
of financial information and ensure that the company’s internal financial 
controls and system of risk management are robust and defensible  
they are responsible for determining the appropriate level of 
remuneration for the group ceo and have a primary role in  
appointing and when necessary removing him
directors’ interests are disclosed in annual declarations and the 
company secretary is notified promptly of any changes to those 
interests before each board meeting independent nonexecutive 
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 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 until his resignation  
in may 2014 christine coignard from her appointment in july 2014 
jonathan best russell skirrow and leonard homeniuk 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 mr best continues to display all of the qualities of 
independence pursuant to the criteria set out in the code from october 
2014 mr homeniuk no longer holds any shares and since december 
2014 is no longer executive chairman and ceo of polygon gold inc 
polygon in which polymetal holds a 426 equity ownership and one  
of the three board seats polymetal’s interest in polygon with a carrying 
value of us2 million is not material accordingly the board continues  
to consider that mr homeniuk was independent throughout 2014 and 
continues to be an independent nonexecutive director
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
charles balfour did not offer himself for reelection at the agm of  
the company held on 21 may 2014 and retired as a director at the 
conclusion of the agm in order to pursue other opportunities further  
to a rigorous executive search led by spencer stuart an international 
search firm with no other connection with the company christine 
coignard was appointed to the board effective 1 july 2014 as an 
independent nonexecutive director ms coignard has also been 
appointed as a member of the audit and risk nomination and 
remuneration committees of the board and as senior independent 
nonexecutive director
board meetings
in 2014 the board met ten times further business was approved by 
written resolution on one further occasion and by a committee of the 
board on four 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 to the board is reviewed  
at least annually
board of directors
 chairman 
 bobby godsell n
 group ceo 
 vitaly nesis 
 nonexecutive directors 
 konstantin yanakov 
 jeanpascal duvieusart 
 marina grönberg
  independent nonexecutive directors 
christine coignard a
 
r
 
n
 
russel skirrow a 
jonathan best a
 
r 
leonard homeniuk r
 
n
 committees 
a audit and risk committee 
r remuneration committee 
n nomination committee
strategic report governance financial statements appendices
68 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 69 continued
corporate governance
roles of the chairman group chief executive officer and  
senior independent director
the board has approved the division of responsibilities between the 
chairman and the group chief executive officer group 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 for 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 non
executive directors
•	 encouraging active engagement by all members of the board and 
ensuring that the directors receive accurate timely and clear 
information 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 and the board believes that other 
commitments do not adversely affect his contribution to the company 
mr godsell’s other significant commitments are membership of the 
south african national planning commission and a nonexecutive 
directorship in the south african industrial development corporation 
he is also chairman of business leadership south africa and director  
of platmin limited
following certain administrative changes at the end of december 2014 
the position of the group ceo of polymetal international plc group of 
companies has been introduced and is held by mr nesis the group 
ceo is also serving as executive director of the company and the role 
of chief executive officer of polymetal international plc as a separate 
entity no longer exists however these changes do not affect the group 
ceo’s roles and responsibilities in managing the group which he 
continues to do in his capacity as an executive andor director of group 
subholding companies the group ceo reports to the chairman and 
the board directly and upholds the group’s responsibilities to its 
shareholders customers employees and other stakeholders
the group ceo is responsible for the management of the group and 
for developing the group’s business strategy objectives budget and 
forecasts and once approved by the board overseeing their successful 
constructive use of the annual general meeting
the board uses the annual general meeting agm to communicate 
with investors and to encourage their participation to ensure the 
company’s shareholders have time to consider our annual report and 
notice of agm and lodge their proxy votes in good time all meeting 
materials are made available more than 20 working days prior to  
the agm separate resolutions are proposed on each substantially 
separate subject and all resolutions are put to a poll the company  
also offers shareholders the option 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 2014 agm we received votes representing approximately 
61 of our issued share capital the results of the proxy vote are 
presented 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 2014 
agm was attended by all directors including the chairmen of the audit 
and risk remuneration and nomination committees up to 2014 the 
company’s agms held in jersey with live webcast and conference call 
facilities were available for shareholders unable to be present in person 
and recordings of the agm webcast made available on the company’s 
website the 2015 agm of the company will be held in london to 
enable easier participation of shareholders in the meeting
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 meeting attendance
board 
meetings
1
 
ten
audit and risk 
committee 
meetings
2
 
five
remuneration 
committee 
meetings
3
 
three
nomination 
committee 
meetings
4
 
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  
up to 21 may 2014 55 22 22 11
konstantin yanakov all na na na
marina grönberg all na na na
jeanpascal 
duvieusart 8 na na na
christine coignard 
from 1 july 2014 55 33 11 11
1
 further business conducted by the board was approved by written resolution on one further 
occasion and by a committee of the board on four further occasions
2
 further business conducted by the audit and risk committee was approved by written 
resolution on one further occasion
3
 further business conducted by the remuneration committee was approved by written 
resolution on one further occasion
4
 further business conducted by the nomination committee was approved by written 
resolution on one further occasion
implementation the board interacts with the executive management  
on a regular basis directors invite senior executives to attend relevant 
parts of the board and committee meetings for reporting on agenda 
items and participating in discussion all members of executive 
management report directly to the group ceo
the group ceo responsibilities include
•	 developing and proposing 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
•	 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 sid
charles balfour up to 21 may 2014 acted as the board’s sid from 
1 july 2014 christine coignard was appointed as sid ms coignard is 
available to major shareholders in order to listen to their views and help 
develop a balanced understanding of their issues and concerns she 
also acts as an intermediary for the other directors if necessary in 
2014 ms coignard attended a series of oneonone meetings with 
institutional shareholders and investors arranged as part of the 
company’s roadshow and the investor events organised by the 
company’s brokers the board is regularly updated on shareholders’ 
opinions following meetings with the directors and management
separate meetings are held between the nonexecutive directors 
without the chairman or the group ceo being present and between 
nonexecutive directors without the chairman led by the sid to 
appraise his performance annually and on such other occasions as 
appropriate and between the independent nonexecutive directors 
without the other nonexecutive directors being present this includes 
both formal and informal meetings between directors
nomination committee
the nomination committee is chaired by mr godsell and its other 
members are mr homeniuk mr balfour up to 21 may 2014 and 
ms coignard from 1 july 2014 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 skills knowledge independence experience and diversity 
and makes recommendations to the board about any changes that 
the committee considers necessary
•	 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
•	 evaluates the balance of skills knowledge experience 
independence and diversity of the board before any appointment  
is made by 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 relates to the composition of the board and whether non
executive directors are spending enough time to discharge 
their duties
further to mr balfour not offering himself for reelection at the  
agm held on 21 may 2014 the company appointed spencer stuart  
as an international search firm to find a further independent non
executive director to replace mr balfour subsequently ms coignard 
was appointed to the board on 1 july 2014
there were two meetings of the nomination committee in 2014
at its meetings the committee continued discussing 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 an 
additional advantage of such an approach and is in line with the 
company’s objective of promoting women at all levels of the group 
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
in 2014 the proportion of women working in the group was 22 
women represent 22 of board members 22 of senior management 
positions and 43 of qualified employees the regular monitoring  
of compliance in terms of diversity policy is undertaken by the hr 
department no instances of discrimination towards employees  
of the company have been revealed all candidates and employees 
have equal opportunities regardless of gender age race nationality 
language origin wealth residence religion and other beliefs social 
membership or other personal circumstances
board composition
board member appointed executive nonexecutive independent
audit and risk 
committee 
member
chairman 
remuneration 
committee 
member
chairman 
nomination 
committee 
member
chairman
bobby godsell 29 september 2011 ✓ chairman
vitaly nesis 29 september 2011 ✓
jonathan best 29 september 2011 ✓ ✓ chairman member
russell skirrow 29 september 2011 ✓ ✓ member
leonard homeniuk 29 september 2011 ✓ ✓ chairman member
charles balfour
1
29 september 2011 ✓ ✓ member member member
konstantin yanakov 29 september 2011 ✓
marina grönberg 29 september 2011 ✓
jeanpascal duvieusart 29 september 2011 ✓
christine coignard
2
1 july 2014 ✓ ✓ member member member
1
 senior independent director retired on 21 may 2014
2
 senior independent director from 1 july 2014
strategic report governance financial statements appendices
70 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 71 audit and risk committee report
continued
corporate governance
as part of the ongoing discussion in relation to succession planning 
arrangements the committee and the other nonexecutive directors 
continued meeting with young leaders and discussed ways of 
promoting talented employees and helping them to achieve their full 
potential an executive development programme was adopted by the 
committee which includes mentoring and continuing education in 
addition the company offers internship programmes in cooperation 
with key mining universities
the nomination committee acknowledges that a deeper and more 
rigorous approach to succession planning is vital for the company’s 
continuing success so that leadership is fully aligned to corporate 
strategy both at board and senior management levels
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
in 2014 the board carried out a performance evaluation of itself its 
committees the chairman and the group ceo this was conducted 
without the assistance of an external facilitator the first externally
facilitated board review had taken place in 2013 and was performed  
by lintstock ltd an independent advisor with no other connection  
to the company in accordance with the uk code it is the board’s 
intention that the evaluation process will be externally facilitated every 
three years
selfevaluation 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 for 2015 it is planned that each 
director gives an assessment on their work as a board member  
and each member of a committee will provide feedback on the work  
of the committee and ways of improving information will be sent  
to the chairman and chairmen of the respective committees which  
will be followed by a discussion due to the recent appointment  
of ms coignard as senior indepedent nonexecutive director no 
performance evaluation of her work was made and directors will 
provide their feedback on her for the first time in 20152016 ways  
of improving the ongoing training of directors were discussed and  
an enhanced training programme will be put in place in 2015 with 
assistance from external advisors
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
reelection policies
in accordance with the uk code all directors are subject to annual 
reelection
full terms and conditions of the appointment of nonexecutive directors  
are available for inspection at the company’s registered office
the directors’ biographical details are set out on pages 66 to 67  
and following their performance evaluations the board and chairman 
consider that each of the directors standing for reelection will continue 
to be an effective contributor to the group’s success and demonstrate 
commitment to his or her role a performance evaluation of the 
chairman was conducted by the board in 2014 and the board believes 
that the chairman continues to be effective and to demonstrate 
commitment to his role
induction
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 and a copy of the 
memorandum on inside information insider lists and code of practice 
on dealing in securities directors also receive the company’s 
guidelines on matters reserved to the board 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 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 the progress of capital 
projects a field trip to varvara and kyzyl for nonexecutive directors 
took place in august 2014
dear shareholders
during 2014 the macroeconomic situation in russia geopolitical 
factors and the sustained weakness of commodities prices all 
contributed to the committee’s ever greater focus on risks and more 
importantly ensuring that the company’s risk management process 
minimises its exposure to these circumstances
as new regulations emerge we have concentrated on the principal  
risks and adequacy of internal controls in particular those relating to 
financial tax and market risk the quality of both financial reporting and 
internal controls has increased this year the audit and risk committee 
and the board as a whole are satisfied with the continuous 
improvement made by the finance team
since july 2014 the committee has been further strengthened by 
christine coignard’s membership her extensive international finance 
and banking experience add significantly to our skill base and will be 
invaluable for the future
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 2014 five meetings of the audit and risk committee were held and 
further business conducted by the committee was approved by written 
resolution on one additional occasion
the audit and risk committee dealt with the following matters
•	 reviewed and recommended for approval financial and risk 
information included in the annual report 2013
•	 reviewed and recommended for approval polymetal’s results  
for the six months to 30 june 2014
•	 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 interim and year end audit fees
•	 reviewed the actual audit fee in 2014 compared to the 
authorised amount
•	 approved the terms of engagement including the 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 nonaudit work performed by the auditors
•	 recommended the reappointment of deloitte llp as external auditor
•	 reviewed the critical risks and exposures of the group including 
significant judgements impairments and tax risks
•	 reviewed the capability of the group’s finance team
•	 performed an internal assessment of the committee’s  
effectiveness and
•	 reviewed corporate governance changes and planned for continued 
compliance in 2015
in line 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 strong systems and processes which enable the 
committee to operate effectively
the committee remains fully focused on the quality of the reporting 
internal control and risk management processes in order to ensure the 
transparency and objectivity of the company’s financial statements
jonathan best
chairman audit and risk committee
 
strategic report governance financial statements appendices
72 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 73 continued
audit and risk committee report
audit and risk committee
the audit and risk committee is chaired by mr best and its other 
members are mr skirrow and mr balfour up to 21 may 2014 and 
ms coignard from 1 july 2014 all independent nonexecutive 
directors the directors consider that mr best has recent and  
relevant financial experience refer to page 67 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 
shareholders to consider at the agm in relation to the appointment 
reappointment resignation or removal of the group’s 
external auditor
•	 overseeing the group’s relationship with its external auditor and 
reviewing the effectiveness of the external audit process taking  
into account relevant uk professional and regulatory requirements  
the committee meets with the external auditor at least once a year 
without management being present to discuss their remit and any 
issues arising from the audit
•	 reviewing the independence and objectivity of the external auditor 
and the appropriateness of the provision of any nonaudit services  
by the external auditor taking into account relevant ethical guidance
•	 reviewing the effectiveness of the group’s system of internal controls 
and risk management systems
•	 monitoring and reviewing 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
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 auditor relating to the provision of nonaudit services  
to ensure that auditor objectivity and independence are 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
the policy governing the provision of nonaudit services by the external 
auditor approved by the committee defines permitted audit and 
nonaudit services
preapproval thresholds are in place for the provision of nonaudit 
services by the external auditor being preapproval by the cfo  
if below us5000 by the chairman of the audit and risk committee  
if between us5000 and us20000 or by the audit and risk 
committee if above us20000
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 auditor 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 
wwwpolymetalinternationalcom
the audit and risk committee has considered information pertaining to 
the balance between fees for audit and nonaudit work for the group in 
2014 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 significant amount of other nonaudit fees in 2014 
of us579000 is represented by the assurance services in respect of 
the class 1 circular for the kyzyl acquisition it is impracticable for these 
to be performed by an outside firm due to their nature and are they  
not considered to be a threat to the external auditor’s objectivity 
or independence
review of the effectiveness of the external  
audit process and audit quality
the audit and risk committee has adopted a formal framework in its 
review of the effectiveness of the external audit process and audit 
quality which includes the following areas
•	 the audit partners with particular focus on the lead audit 
engagement partner in 2015 the existing audit partner of the 
company has been rotated and the committee performed an 
interview of the new partner
•	 the audit team
•	 planning and scope of the audit and identification of areas  
of audit risk
•	 execution of the audit
•	 the role of management in an effective audit process
•	 communications by the auditor with the audit and risk  
committee and how the auditor supports the work of the  
audit and risk committee
•	 how the audit contributes insights and adds value
•	 the independence and objectivity of the audit firm and the quality  
of the formal audit report to shareholders
an auditor assessment tool is completed each year by each member  
of the audit and risk committee and by the cfo feedback is also 
sought from the group ceo other members of the finance team 
divisional management and the head of internal audit
the assessment tool adopted is comprehensive and includes detailed 
questions which are completed by way of a formal questionnaire  
every three years with the key areas being performed every year  
the feedback from this process is considered by the audit and risk 
committee and is provided both to the auditor and to management 
action plans arising are also reviewed by the committee
the effectiveness of management in the external audit process is 
assessed principally in relation to the timely identification and resolution 
of areas of accounting judgement the quality and timeliness of papers 
analysing those judgements management’s approach to the value of 
independent audit the booking of audit adjustments arising if any and 
the timely provision of draft public documents for review by the auditor  
and the audit and risk committee
every three years the audit and risk committee requests that a partner 
independent of the audit engagement team discusses the quality of the 
external audit process with the audit and risk committee chairman and 
the cfo using this evaluation framework
during this year the audit and risk committee’s focus was on
•	 evaluating the recoverability of goodwill and ppe the committee 
examined the potential indicators of impairment or impairment 
reversal where appropriate for each of the cashgenerating units 
and the lifeofmine financial models used for assessing the fair value 
less costs to sell of the individual cgus tested for impairment the 
committee examined and challenged the commodity price discount 
rate and exchange rate assumptions used by management in its 
impairment tests
•	 evaluating the existence and recoverability of metal inventories  
the committee examined the price assumptions used by 
management as well as unit costs and other internal assumptions 
used in determining the net realisable value of unfinished goods 
within metal inventories ore and concentrate stockpiles
•	 evaluating the recoverability of exploration and development assets 
the committee evaluated management’s approach to determine 
whether the existing exploration and development assets are likely  
to generate future economic benefits and whether any indicators  
of impairment had been identified
•	 accounting and valuation of the kyzyl acquisition the committee 
examined the purchase price allocation prepared by management 
including the valuation of the deferred contingent consideration and 
seller put option as well as key assumptions used in the valuation  
of these elements
•	 the impact of sanctions on the company’s performance and its 
access to external funding 
•	 internal controls and the risk of misstatement the committee 
reviewed reporting from internal audit in respect of its audit plan  
and discussed all significant findings and
•	 the committee also evaluated the accounting policies adopted 
by management
the chairman of the audit and risk committee makes himself available 
to major institutional shareholders annually to discuss the company’s 
annual reporting to shareholders as part of the company’s investor day  
he is also available for oneonone meetings with key shareholders  
at their request
the reappointment of deloitte llp as the group’s external auditor is 
reviewed annually by the audit and risk committee deloitte llp was 
appointed auditor in 2011 with deloitte cis having been auditor of  
jsc polymetal since the last tendering process in 2007 the group  
has a policy of tendering the external audit at least every ten years  
the committee’s assessment of the external auditor’s performance and 
independence underpins its recommendation to the board to propose 
to shareholders the reappointment of deloitte llp as auditor until the 
conclusion of the agm in 2016 resolutions to authorise the board to 
reappoint and determine the auditor’s remuneration will be proposed 
at the agm on 20 may 2015
the board considers that the audit and risk committee complies  
with the requirements of the uk code
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 
risk to achieve the company’s business objectives whilst bringing 
residual risk to an acceptable level and can only provide reasonable  
and not absolute assurance against material misstatement or loss
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 group 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
strategic report governance financial statements appendices
74 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 75 continued
audit and risk committee report
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
•	 an appropriate tone set from the top board level aimed at building 
the appropriate control environment
•	 a proper risk identification and management system for more detail 
please refer to pages 6061
•	 a 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 group ceo 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
financial reporting systems
the quality of financial accounting and reporting is ensured through  
a set of control procedures in the following areas accounting 
methodology preliminary review of 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 
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 enterprise resource 
planning 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 relevant headquarters 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 versus budgeted financial 
performance 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 transactions with banks on accounts maintenance 
deposits and borrowings and foreign currency transactions are also 
performed at relevant headquarters level in compliance with the 
treasury policy approved by the board
controls over it systems used in financial  
accounting and reporting
the group uses a 1c enterprise 8 erp system for the automation  
of everyday enterprise activities these include various business tasks 
of the economic and management functions such as management 
accounting business accounting hr management supplier 
relationship management srm and material requirements planning 
mrp polymetal also uses the erp system for budgeting accounting 
hr recordkeeping 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 for effective control of each it process
uk bribery act 2010
the company and its directors are committed to ensuring adherence 
to the highest legal and ethical standards this must be reflected in 
every aspect of the way the group operates bribery is a criminal 
offence in the countries in which the group operates 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 a code of conduct in place which refers to antibribery 
and corruption policy the policy extends across all the group’s 
business dealings in all countries and territories in which the group 
operates and applies 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 the policy 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 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 the 
independent investigation of such matters
the company affirms that it has not denied any personnel access  
to the audit and risk committee and that it has provided protection  
to whistleblowers from adverse personnel action
the code of conduct is available on the website copies of the 
antibribery and corruption policy and the whistleblowing policy  
are available on request from the company’s offices
remuneration report
dear shareholders
2014 continued to be a challenging year for all mining companies  
when highly volatile movements in commodity prices forced the sector 
to continue focusing on controlling costs producing robust operating 
performance and maintaining capital discipline at the beginning  
of 2014 the remuneration committee approved a salary increase  
to mr nesis and the senior management team to bring their salaries 
more in line with market practice this was the first salary review since 
the ipo in november 2011 
a significant russian rouble devaluation at the end of 2014 meant  
that the income of those employees whose salaries are denominated  
in russian roubles significantly decreased when taking inflation  
into account
to remain competitive and attract and keep the most suitable 
employees in january 2015 the remuneration committee 
recommended to the board a salary increase of 165 for all group 
employees whose salaries are denominated in roubles including  
the group ceo vitaly nesis this increase was effective from 
1 february 2015
even allowing for the 165 increase the salary of mr nesis in us 
dollar terms decreased by 38 as at 1 february 2015 compared  
to 1 april 2014 when the annual salary increases were effective 
2014 was the first year of implementation for our new longterm 
investment plan ltip scheme in addition 50 of bonuses awarded 
to the group ceo and the senior management team are deferred into 
shares in the company 
as a ftse 250 company whose shares are listed on the london stock 
exchange we believe that our shareholders rightfully expect polymetal 
to comply with the strictest of corporate governance requirements we 
remain committed to full adherence to all regulatory requirements and 
as such also reflect this in our remuneration policies and decisions 
as a result we consistently receive over 95 of votes in favour  
of agm resolutions related to remuneration and to the reappointment  
of directors this unequivocal backing from shareholders in support  
of the company’s decisions is very heartening as we strive to develop 
our remuneration policies in line with best practices and align them  
with business strategy and performance
polymetal’s remuneration policy remains a key element in providing  
a clear framework to motivate incentivise and retain our senior 
management team as disclosed in the 2013 annual report polymetal 
fully complies with the new remuneration disclosure requirements and 
the company’s remuneration policy and remuneration report were 
approved with 998 of votes cast in favour at the agm held in 
may 2014 
going forward we as a committee will continue to ensure the 
alignment of board and senior management remuneration with the 
company’s strategic objectives as well as maintaining full transparency 
to and open dialogue with our shareholders on executive pay 
remuneration philosophy
the focus on sustainable shareholder value creation is the cornerstone 
of our executive remuneration system the company’s remuneration 
policy is set to ensure that directors are fairly rewarded with regard to 
the responsibilities undertaken and considers comparable pay levels  
in the countries of operation and the international mining industry  
the executive remuneration strategy and underlying policy supports 
this by enabling the company to attract and retain talent that will 
maximise shareholder value corporate and individual performance  
is taken into account in setting the pay level for the group ceo and  
this is reviewed on an annual basis to ensure that it remains in line  
with companies of a similar nature size and complexity
an external benchmarking is undertaken every three years in order to 
ensure comparability with other gold mining companies worldwide and 
londonlisted peers such benchmarking was last performed in 2012 
remuneration levels for nonexecutive directors are based on 
comparable levels for companies of a similar nature size and 
complexity and take into account specific responsibilities undertaken
context to the committee’s decisions
in 2014 in addition to continued weakness in the commodities  
markets we witnessed major macroeconomic and geopolitical issues  
in russia and kazakhstan at polymetal we continued to concentrate 
on controlling costs delivering robust operating performance and 
maintaining capital discipline we have also been able to significantly 
expand the company’s reserves and lifeofmine by acquiring the kyzyl 
project in kazakhstan however despite resilient operating and cost 
performance the financial results of the company in 2014 continued  
to be affected by the market conditions our net profit decreased  
on the back of significant decline in commodities prices however we 
were able to sustain free cash flow as a result of decreases in capital 
expenditure and production growth and as a result pay regular  
and special dividends
strategic report governance financial statements appendices
76 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 77 remuneration report
another challenge was to stay on top of the changing remuneration 
disclosure requirements and ensure that all procedures put in place are 
fully compliant with the applicable regulations and best practices these 
priorities are reflected in our remuneration decisions when awarding 
performance bonuses to the group ceo and senior employees and 
reviewing their base salaries
key committee decisions
•	 in 2014 the remuneration committee concentrated on implementing 
the longterm incentive plan ltip which was supported by 998 
of shareholders who voted on it the plan includes a total shareholder 
return tsr underpin stipulating that no options will vest in the  
event that tsr for the period is negative other features include the 
mandatory deferral of 50 of annual bonuses for three years to be 
paid in shares clawback provisions a oneyear holding period for all 
ltip and a substantial minimum shareholding requirement for the 
company’s executives
•	 due to unfavourable market conditions the remuneration 
committee decided that any significant changes to the existing 
approach to the remuneration of directors and senior officers of the 
company in 2014 would be inappropriate
•	 the committee approved the increase in the roubledenominated 
group chief executive officer’s base salary for 2014 by 8 from 
1 april 2014 there was no increase in 2013 versus 2012 and 2011 
which partially compensates for the more significant depreciation of 
the rouble against the us dollar 14 and inflation the us dollar 
equivalent of the chief executive officer’s base salary decreased  
by 5
•	 due to the rapid devaluation of the rouble in q4 2014 there was  
a further salary review for all employees who were paid in roubles 
resulting in a further 165 increase in rouble terms for group ceo 
pay effective from 1 february 2015 
•	 an annual bonus representing 90 of the maximum available 
amount was awarded to the chief executive officer in respect 
of 2014
changes during the year
polymetal made no changes to its existing executive remuneration 
structure in 2014 the company’s remuneration policy was approved  
by shareholders at the agm 2014 and came into effect immediately 
after it will continue to apply for the next three years ending in may 2017 
approach to disclosure
this report sets out the company’s remuneration policy and 
implementation for its directors and provides details of their 
remuneration and share interests for the year ended 31 december 
2014 the board believes that for a company whose shares are  
listed on the london stock exchange it is expected that the  
directors’ remuneration policy and annual remuneration report of the 
company should be approved by shareholders and it is an element  
of good corporate governance for the company to seek this
as there were no changes to the directors’ remuneration policy  
this year we will not be putting it to a binding shareholder vote  
the directors’ annual remuneration report will be put to an advisory 
shareholder vote at the annual general meeting of the company  
on 20 may 2015
on behalf of the committee i welcome feedback from shareholders 
and look forward to receiving your support at the agm
leonard homeniuk
chairman remuneration committee
continued
directors’ remuneration policy
shareholders approved the company’s remuneration policy at the agm on 21 may 2014 and it is expected to cover a period of three years from 
that date the policy applies from the date of approval
element and purpose  
link to strategy operation opportunity
performance metrics used  
and period applicable
executive director – group ceo
base salary
to attract and  
retain highcalibre 
executives
the committee reviews base salary 
on an annual basis taking into 
account general economic and  
market conditions underlying group 
performance the level of increases 
made across the group as a whole 
the remuneration of executives in 
similar positions in ftse 250 and 
global mining peers and individual 
performance when setting base salary 
for the following year
over the policy period base salary for 
the group chief executive officer will 
be set at an appropriate level within 
the peer group and will increase in line 
with base salary increases for the 
wider workforce except where a 
change in the scope of the role occurs
the annual base salary for the 
reporting year and the current year  
is set out in the annual report  
on remuneration
not applicable
benefits the group does not provide any 
benefits for its group ceo
not applicable not applicable
pension
to provide funding 
for retirement
the group does not fund any pension 
contributions or retirement benefits 
except contributions to the mandatory 
pension fund of the russian federation 
as required by russian law
the group pays defined contributions 
of 10 of total pay to the mandatory 
pension fund this permits retiring 
employees to receive a defined 
monthly pension for life from the 
statutory pension fund
does not exceed the mandatory 
contribution made to the pension  
fund of the russian federation
currently 10 of total pay
not applicable
annual bonus
to focus on 
achieving annual 
performance goals 
which are based  
on the group’s key 
performance 
indicators kpis  
and strategy
the annual bonus result is determined 
by the committee after the year end 
based on performance against  
defined targets
annual bonuses are paid three months 
after the end of the financial year  
to which they relate
50 of the annual bonus earned is 
paid in cash and the remaining 50  
is compulsorily deferred into shares 
which are released annually to the 
employee over the next three years  
in equal instalments through the 
deferred share awards plan dsa
details of the dsa are set out on the 
next page
maximum bonus opportunity –  
150 of base salary
target bonus opportunity –  
100 of base salary
threshold – nil annual bonus for 
threshold performance
the annual bonus is earned on the 
basis of the achievement of a mix of 
financial and nonfinancial measures
for 2014 performance metrics and 
associated weightings for each were
•	 production 30
•	 total cash costs 30
•	 completion of new projects on time 
and within budget 30 and
•	 health and safety 10
the committee has discretion to vary 
the weighting of performance metrics 
over the life of this remuneration policy 
in addition the committee has 
discretion to vary performance metrics 
partway through a performance year  
if there is a significant event which 
causes the committee to believe that 
the original performance conditions  
are no longer appropriate
performance is measured over the 
financial year
strategic report governance financial statements appendices
78 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 79 continued
remuneration report
element and purpose  
link to strategy operation opportunity
performance metrics used  
and period applicable
longterm incentive plan ltip
deferred share 
awards plan dsa
deferral to 
encourage retention 
and alignment with 
shareholders
50 of the annual bonus earned is 
paid in cash and the remaining 50  
is compulsorily deferred into shares 
which are released annually to the 
employee over the next three years  
in equal instalments
malus provisions apply for the 
unvested portion of the dsa the 
remuneration committee may at  
any time up to and including vesting 
reduce the number of shares that  
vest should material misstatement 
misconduct andor a failure of risk 
management occur
dividend equivalents will be received 
on vested shares reflecting the value 
of dividends which have been paid 
during the period from the grant date 
to the vesting date
entitlement to this deferred 
component is subject to continued 
employment over the deferral period
in normal circumstances deferred 
share awards will continue until the 
normal time of vesting upon cessation 
of employment in good leaver 
circumstances alternatively the 
board may determine that deferred 
share awards will vest immediately  
in both circumstances there would be 
no prorating of the deferred share 
awards for the time from the award 
date until cessation of employment  
or for performance
no performance conditions apply  
to the deferred share awards
performance 
share plan psp
to provide 
longterm alignment 
with shareholders’ 
interests
under this plan annual rolling awards 
are made with a fouryear vesting 
period and an additional mandatory 
holding period of one year  
following vesting
stretching performance targets  
reward participants for delivering 
positive absolute and superior  
relative total shareholder return tsr 
performance against global peers  
over a longterm period
malus provisions apply for the 
unvested portion of the psp the 
remuneration committee may  
at any time up to and including 
vesting reduce the number  
of shares that vest should material 
misstatement misconduct andor  
a failure of risk management occur
retesting of the performance 
conditions in future years is not 
allowed under any circumstances
first grant under the psp was made  
in april 2014
maximum grant permitted under  
the plan rules is 200 of salary
normal grant level is expected  
to be 150 of base salary
threshold vesting is equivalent  
to 20 of the award
dividend equivalents will be received 
on vested shares reflecting the value 
of dividends which have been paid 
during the period from the grant date 
to the vesting date
vesting is based on relative tsr 
measured against the constituents of 
the ftse gold mines index and also 
on the company’s absolute tsr
peers are ranked and the company’s 
position determines vesting
•	 0 vests for below 
median performance
•	 20 vests at median performance
•	 100 vests at top decile 
performance and above and
•	 no award will vest if absolute  
tsr is negative regardless of 
relative performance
the committee may substitute vary  
or waive the performance targets  
if an event occurs which causes the 
committee to consider that the target 
is no longer appropriate
the committee has discretion to vary 
the proportion of awards that vest to 
ensure that the outcomes are fair and 
appropriate and reflect the underlying 
financial performance of the group
element and purpose  
link to strategy operation opportunity
performance metrics used  
and period applicable
minimum 
shareholding 
requirements
to strengthen 
alignment between 
interests of 
executive directors 
and those of 
shareholders
the group ceo is required to build  
a minimum shareholding over a 
fiveyear period
unvested shares under the psp or 
dsa are not taken into account when 
calculating progress towards the 
minimum shareholding requirements
for the purposes of determining 
whether the requirements have been 
met share price is measured at the 
end of each financial year
post vesting and tax all shares 
acquired under psp and dsa awards 
must be retained until the shareholding 
requirement is met
500 of base salary for the  
group ceo
not applicable
nonexecutive directors
fees for  
nonexecutive 
directors
to attract and  
retain highcalibre 
nonexecutive 
directors
the fees of independent non
executive directors are set by 
reference to those paid by other  
ftse 250 mining companies
fees are set to reflect the 
responsibilities and time spent  
by the nonexecutive directors  
on the affairs of the company
no fees are paid to nonindependent 
nonexecutive directors
nonexecutive directors are not 
eligible to receive benefits and  
do not participate in incentive or 
pension plans
the chairman receives a base fee only
the following fees are paid in addition 
to the nonexecutive director base fee
•	 committee chairmanship fee
•	 committee membership fee and
•	 board and committee  
attendance fee
the remuneration committee 
determines the framework and broad 
policy for the remuneration of the 
chairman the remuneration of 
nonexecutive directors is a matter  
for the chairman of the board and  
the executive members of the board  
ie the group ceo directors do not 
participate in discussions relating  
to their own fees
fees are reviewed but not necessarily 
increased on an annual basis
any increase in nonexecutive  
director fees will normally be in line  
with base salary increases for the wider 
workforce except where a change  
in the scope of the role occurs
current fee levels are set out in the 
annual report on remuneration
not applicable
strategic report governance financial statements appendices
80 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 81 continued
remuneration report
remuneration policy for other employees
the remuneration policy for the other members of the company’s executive team and broader management team of the group is consistent in 
both structure and kpis with the policy in respect of the group ceo whilst the value of remuneration will vary throughout the group depending 
upon the individual’s role criticality to the business and level of seniority the remuneration of all senior executives consists of a base salary an 
annual bonus and participation in the new ltip the psp and dsa employees up to three levels below the board approximately 300 employees 
throughout the group participate in the ltip at the discretion of the remuneration committee the psp policy grant level is 150 of base  
salary for the group ceo 100 for executive committee members and 50100 for employees of the level below the executive committee 
shareholding requirements are also set below board level the dsa operations mirror the arrangement set out for executive directors in the policy 
table where 50 of the annual bonus is compulsorily deferred into shares and released annually to employees over a period of three years
remuneration policy for the wider group of employees is aimed at aligning pay with the achievement of targeted results for each employee the 
company’s policy on fair pay provides for the payment of additional remuneration for employees living in difficult climatic locations and the delivery 
of appropriate levels of pay for different levels of work the bonus component of remuneration for midlevel management and operational staff  
is measured based on the achievement of production targets increasing output the level of justified cost savings and health and safety records 
in terms of pension arrangements the company applies a consistent approach for the group ceo and other employees and adheres to the 
mandatory pension contributions required under applicable laws
salaries are considered for annual increases based on the company’s performance results inflation rates and the competitive level of salaries 
versus the wider market
notes to the policy table
performance measures and targets
the committee selected the performance conditions indicated in the policy table because they are central to the company’s overall strategy  
and are the key metrics used under the annual bonus and ltip by the group ceo to oversee the operation of the business
performance targets for all our incentive plans are reviewed annually and where appropriate are typically set at a level that is in line with the 
company’s forecasts
changes to remuneration policy for 2015
design element changes made during the year
base salary
roubledenominated salaries increased for all employees by 165 effective from 1 february 2015  
note that in us dollar terms the group ceo salary has decreased by 38 compared to 1 april 2014 
annual bonus no changes made 50 of bonus deferred into shares as required by the dsa
ltip
first grants of options were made under the new psp plan in april 2014 a new tranche of options  
is expected to be granted in april 2015 
nonexecutive directors no changes made
the new ltip
following shareholder approval at the agm in june 2013 a new longterm incentive programme the ‘performance share plan’ or ‘psp’ was  
put in place after the vesting of awards under the previous longterm eip for those participants who have waived their rights under the eip  
some minor amendments to the ltip were approved by shareholders at the agm in may 2014
the key terms of the new ltip are described in the policy table above
the board believes that the new ltip ensures continued alignment of the executive team’s performance with shareholder interests and rewards 
superior longterm performance and the creation of sustainable shareholder value the board also believes that the ltip is in line with uk best 
practice and follows fully the provisions of the uk corporate governance code and other relevant guidelines while also containing features which 
are superior to common practice in the uk – such as a positive tsr underpin for vesting of the ltip
illustration of application of remuneration policy
the composition and structure of the remuneration package for the group ceo under three performance scenarios maximum performance 
target performance and minimum performance is set out in the charts below
this chart shows that the proportion of remuneration delivered through shortterm and longterm incentive schemes is in line with our remuneration 
policy and changes significantly across the three performance scenarios as such the package promotes the achievement of both shortterm and 
longterm performance targets and drives the alignment of the group ceo’s interests with the interests of shareholders
00
maximum
target
minimum
total us13 million
total us08 million
total us04 million
10 05 15 20
remuneration policy 
usm
● fixed elements of remuneration    ● single year variable    
● multiple year variable
29 33 38
46 41 12
100
note scenario values are translated at the 31 december 2014 roubleus dollar closing  
exchange rate of 561
the scenarios are defined as follows
minimum ontarget maximum
fixed elements base salary and pension
single year  
variable
performance against 
financial kpis  
is below budget  
by more than 10
nonachievement of  
nonfinancial kpis
0 payout
performance against financial  
kpis is at budgeted levels
full achievement of nonfinancial kpis
100 of base salary payout  
77 of maximum opportunity
includes dsa awards
performance against financial kpis is above 
budgeted levels
full achievement of nonfinancial kpis
150 of base salary payout  
100 of maximum opportunity
includes dsa awards
multiple year  
variable
share price 
performance is  
below the median  
of ftse gold mines  
index constituents
no shares vest
scenario is based on 150 policy awards
share price performance is at median  
of ftse gold mines index constituents
shares equivalent to 30 of base  
salary vest under the psp  
20 of total shares available
share price performance is in the top decile  
of ftse gold mines index constituents
shares equivalent to 150 of base salary vest 
under the psp 100 of total shares available
no allowance has been made for share price appreciation or for the payment of dividend equivalents nonexecutive directors do not receive 
performancerelated pay their fees are disclosed in the policy table on page 81
strategic report governance financial statements appendices
82 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 83 continued
remuneration report
approach to recruitment remuneration
the committee’s approach to recruitment remuneration is to pay a competitive overall package as appropriate to attract and motivate the right 
talent for the role if an executive is promoted to the board from within the company any preexisting awards or benefits that were made available 
to him or her prior to becoming a director and not in anticipation of an imminent promotion to the board will be retained and allowed to vest  
or be provided under the original terms
the following table sets out the various component which would be considered for inclusion in the remuneration package for the appointment  
of an executive director any new director’s remuneration package would include the same elements be set at a level consistent with the scope  
of the role at a level not exceeding that of the group ceo as set out in the remuneration policy table and be subject to the same constraints  
as those of existing directors performing similar roles as shown below
area policy and operation
base salary  
and benefits
the base salary level will be set by taking into account the experience of the individual and the salaries paid  
in comparable companies
depending on the circumstances of any particular appointment the committee may choose to set the base salary  
below market median and increase the amount paid over a period of time to achieve alignment with market levels for  
the role with reference to the experience and performance of the individual subject to the company’s ability to pay
in line with the remuneration policy as set out in the directors’ remuneration policy table no benefits will be provided  
to recruited directors
pension pension contributions will be limited to the mandatory contributions required by russian or any other applicable law  
as set out in the directors’ remuneration policy table
annual bonus the executive director will be eligible to participate in the annual bonus scheme as set out in the directors’ remuneration 
policy table the maximum annual opportunity is 150 of base salary
50 of any bonus is deferred into shares under the dsa as set out in the directors’ remuneration policy table
longterm  
incentives
the executive director will be eligible to participate in the ltip at the remuneration committee’s discretion in line with the 
details set out in the directors’ remuneration policy table the maximum annual grant permitted under the scheme rules  
is 200 of base salary and the normal grant level is up to 150 of base salary performance measures would apply  
as set out in the remuneration policy table
replacement  
awards
the committee will seek to structure any replacement awards so that overall they are no more generous in terms of 
quantum or vesting period than the awards due to be forfeited as a consequence of the individual joining the company  
in determining the quantum and structure of any replacement awards the committee will seek to replicate the fair value 
and as far as practicable the timing form and performance requirements of the forfeited remuneration the maximum 
value of replacement awards is capped at 50 of the individual’s base salary and at least 50 of any replacement award 
should be delivered in the company’s shares
other should relocation of a newly recruited executive director be required reasonable costs associated with this relocation will 
be met by the company such relocation support may include but not be limited to payment of legal fees removal costs 
temporary accommodationhotel costs a contribution to stamp duty and replacement of nontransferrable household 
items in addition and in appropriate circumstances the committee may grant additional support in relation to the payment 
of school fees and the provision of tax advice
the company will reimburse the executive director for all reasonable expenses which heshe may incur while carrying out 
executive duties
service contracts and policy on payment for loss of office
loss of office policy
the committee’s approach when considering payments in the event of termination is to take into account individual circumstances including  
the reason for termination contractual obligations of both parties and applicable share plan and pension scheme rules including any relevant 
performance conditions
vitaly nesis is an executive director and group ceo of polymetal international plc and ceo of jsc polymetal a 100 subsidiary of the group 
incorporated in russia further details are set out in the current directors’ service contracts section below
the table below summarises the key elements of the executive director service contracts and policy on payment for loss of office
area policy and operation
notice period polymetal international jsc polymetal
6 months from company with immediate effect from company
6 months from director 1 month from director
compensation for 
loss of office in 
service contracts
no entitlement in respect of directorship of polymetal international
up to three times average monthly salaries in respect of directorship of jsc polymetal
treatment of annual 
bonus awards
where an executive director’s employment is terminated after the end of the performance year but before the payment  
of the annual bonus is made the executive may be eligible for an annual bonus award for that performance year subject to 
an assessment based on performance achieved over the period no award will be made in the event of gross misconduct
where an executive director’s employment is terminated during a performance year a prorated annual bonus award for 
the period worked in that performance year may be payable subject to an assessment based on performance achieved 
over the period
treatment of  
unvested deferred 
share awards  
under plan rules
in normal circumstances deferred share awards will continue until the normal time of vesting upon cessation of 
employment in good leaver circumstances alternatively the board may determine that deferred share awards will vest 
immediately in both circumstances there would be no prorating of the deferred share awards for time from the award  
date until cessation of employment or for performance
treatment  
of unvested 
performance  
share plan awards 
under plan rules
any outstanding award will lapse at cessation of employment with the group unless the cessation is due to death injury 
illhealth disability redundancy retirement or any other circumstances which the committee determines when the award 
will vest as normal in accordance with the terms of the award
alternatively the committee may determine that a proportion of the award will vest immediately with the proportion 
determined by the committee taking into account where relevant the extent to which the performance conditions have been 
met or are likely to be met at the end of the performance period and any other factors the committee may consider relevant
the number of shares shall also normally be prorated down to reflect the reduced service period
exercise of  
discretion
any discretion available in determining the treatment of incentives upon termination of employment is intended only to be 
relied upon to provide flexibility in unusual circumstances
the committee’s determination will take into account the particular circumstances of the director’s departure and the 
recent performance of the group
change of control in relation to performance share plan awards in the event the company’s shares cease to trade on the london stock 
exchange or any other recognised stock exchange delisting or the directors of the company pass a resolution to the 
effect that delisting is imminent or where the board determines that a ‘significant event’ has occurred which may be a 
demerger winding up or compulsory acquisition of the company or any other event as determined by the board at the 
discretion of the board and where applicable with the consent of the acquiring company psp awards will not vest  
but will be exchanged for new psp awards
in the event that the psp awards are exchanged for new psp awards
•	 the award date of the new psp award shall be deemed to be the same as the award date of the original psp award
•	 the new psp award will be in respect of shares in a company determined by the board which may include any  
acquiring company
•	 the new psp award must be equivalent to the psp award and will vest at the same time and in the same manner  
as the psp award and
•	 where relevant either the vesting of the new psp award must be subject to any performance conditions which are  
so far as possible equivalent to any conditions applying to the psp award or no performance conditions will apply but 
the value of shares comprised in the new psp award shall be the value of the number of shares which would have vested 
under the psp award if they had not been exchanged for new psp awards
deferred share awards shall vest immediately and shall not be prorated for time or performance if any of the events 
referred to above occur
strategic report governance financial statements appendices
84 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 85 continued
remuneration report
current directors’ service contracts
group ceo
the table below highlights key elements of the service contract of the group ceo with jsc polymetal the russian holding company of the group 
where he holds the ceo position
date of contract 1 september 2013
expiry of term 31 august 2018
payment in lieu of notice none
pension none except for defined contributions to the mandatory pension fund of the russian federation
mr nesis entered into an appointment letter as amended 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 london stock exchange 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 the 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 six months’ notice 
he is not entitled to receive any compensation in respect of his role as director on termination of this appointment
following the expiry of the previous fiveyear employment contract on 23 august 2013 jsc polymetal a 100 indirect 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 2013 the contract was entered into for a period of five years and expires on 31 august 2018 under the terms of the contract  
the chief executive officer undertakes to perform general management of jsc polymetal a subholding company which provides management 
services to each of the group’s subsidiaries and arrange for its commercial economic social and other activities with a view to providing for  
jsc polymetal’s further development the employment contract does not contain any specific grounds for early termination the contract can be 
terminated at any time on one month’s notice by mr nesis and with immediate effect by jsc polymetal in accordance with russian labour and civil 
law this could result in compensation of three average monthly salaries
the full terms and conditions of appointment are available for inspection at the company’s registered office in jersey
nonexecutive directors
nonexecutive directors do not have service contracts rather the terms of their appointment are set out in letters of appointment the appointment 
of each of the nonexecutive directors took effect 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 or her appointment each nonexecutive director is subject to confidentiality restrictions without limitation in time
the full terms and conditions of appointment of all the directors are available for inspection at the company’s registered office in jersey
dates of contract or appointment for nonexecutive directors are set out in the table below
director date of contract or appointment notice period
bobby godsell 29 september 2011 1 month
charles balfour 29 september 2011 – 21 may 2014 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 homeniuk 29 september 2011 1 month
christine coignard 1 july 2014 1 month
statement of consideration of shareholder views
the committee consults with the company’s major shareholders regularly and seeks their feedback on the group ceo’s remuneration policy  
in 2014 the company put the directors’ remuneration policy to a binding shareholder vote and received 998 of votes in favour the directors’ 
annual remuneration report was put to an advisory shareholder vote at the 2014 agm of the company and received 998 support
statement of consideration of employment conditions elsewhere in the group
in determining salary increases for the group ceo the committee takes into account a range of factors including overall base salary increases 
awarded to the wider employee population during the year
the committee does not directly consult with employees on the appropriateness of the group ceo’s pay arrangements but any comments 
received by the company will be considered
annual report on remuneration
single total figure of remuneration audited information – us
the table below sets out 2014 remuneration for the group ceo the group ceo’s remuneration is denominated in russian roubles and converted 
to us for presentation purposes the approach to exchange rates and russian rouble remuneration equivalent is set out in the footnote 2  
to this table
base salary taxable benefits annual bonus
1
performance share plan 
psp
3
pension total
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
392499 434148 – – 475630 599624 – – 39661 47800 907790 1081572
1
 50 of the bonus received in 2014 has been deferred into 22178 shares on 11 march 2015 at £537 rub 412 per share using average price for the 90day period ending 31 december 2014  
in line with policy deferred shares will be released in equal tranches over a period of three years in march 2016 march 2017 and march 2018 and are not subject to further performance conditions
2
 the amounts are translated at the average rates of the russian rouble to the us dollar for 2014 and 2013 respectively
3
 no psp awards vested or exercised in the year
details of total fees paid to nonexecutive directors and the chairman during 2014 and 2013 are set out in the table below
us
total fees
2014 2013
bobby godsell 472432 450999
jonathan best 286368 270762
russell skirrow 221784 212516
leonard homeniuk 256625 242265
charles balfour 119886 264398
christine coignard 136777 –
konstantin yanakov –  –
marina grönberg –  –
jeanpascal duvieusart –  –
total nonexecutive fees 1493871 1440940
note the amounts for 2014 and 2013 are translated at crossrates of the british pound and the us dollar to the russian rouble stated by the central bank of the russian federation at the 
dates of each payment
single total figure of remuneration – additional information audited information
annual bonus targets and outcomes
the targets for annual bonus measures are considered commercially sensitive because of the information that their disclosure may provide to the 
company’s competitors given that these competitors are largely based outside of the uk and hence are not subject to the same reporting 
requirements as the company performance against these targets is set out below
measures weight below target maximum
achieving production budget 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 ●
this resulted in the group ceo receiving a bonus of 90 of maximum opportunity for the year which constitutes 117 of his base salary or 
us475630
strategic report governance financial statements appendices
86 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 87 remuneration report
continued
ltip
deferred share awards plan 
in accordance with the company’s dsa mr nesis received a conditional award of 22178 shares shares are released annually over the next three 
years in equal instalments march 2016 2017 and 2018
performance share plan 
under the psp a conditional award of 74165 ordinary shares with no par value was made to mr nesis it is exercisable following a fouryear vesting 
period subject to performance measures determined by polymetal for this award vesting is based on relative tsr measured against the 
constituents of the ftse gold mines index and also on the company’s absolute tsr peers are ranked and the company’s position determines 
vesting 0 vests for below median performance 20 vests at median performance 100 vests at top decile performance and above  
no award will vest if absolute tsr is negative regardless of relative performance
scheme interests awarded during the financial year
no other share awards were made to the group ceo in 2014 10027 shares will be allotted after the publication of the annual report in april 2015
total pension entitlements audited information
save for the group’s defined contributions to the mandatory pension fund of the russian federation during the financial year ended  
31 december 2014 no amounts were set aside or accrued by the group to provide pension retirement or other benefits to the directors and 
senior management
loss of office payments or payments to past directors audited information
no loss of office payments or payments to past directors were made in the year under review
directors’ shareholdings audited information
the group ceo is required to retain a shareholding equal to five times his base salary ie 180463 shares
for the purposes of determining whether the requirements have been met share price is measured at the end of each financial year shares are 
valued for these purposes at the yearend price of £576 us895 per share at 31 december 2014 translated at the closing exchange rate of the 
british pound to the russian rouble as at 31 december 2014
shares that count towards shareholding requirements include unfettered shares the table below sets out the number of shares held or potentially 
held by directors
shares held options held
director
shareholding
 requirement
 of salary
owned
outright
subject to
performance
conditions
vested but
unexercised
exercised
in year
current
shareholding
 salary
guideline
met
vitaly nesis 500 3100000 – – – 8589 yes
leonard homeniuk – 64000 – – – – na
bobby godsell – 2000 – – – – na
marina grönberg – 11000 – – – – na
performance graph and table
the graph below illustrates the company’s tsr performance relative to the constituents of the ftse 250 index excluding investment companies 
of which the company is a constituent from the date of the company’s admission to trading on the london stock exchange in october 2011 to 
provide context to the company’s performance in its specific sector of operation we also provide an illustration of the company’s tsr relative to 
the constituents of the ftse gold miners index
oct
2011
dec
2011
feb
2012
apr
2012
jun
2012
aug
2012
oct
2012
dec
2012
feb
2013
apr
2013
jun
2013
aug
2013
oct
2013
dec
2013
feb
2014
apr
2014
jun
2014
aug
2014
oct
2014
dec
2014
0
20
40
60
80
100
120
140
160
180
total shareholder return 
● polymetal    ● ftse 250    ● ftse gold mines
group ceo’s pay in last five years
us 2014 2013 2012 2011 2010
group ceo total remuneration 907790 1081572 1037413 1138013 248565
annual bonus –  of maximum 90 88 90 137
1
 –
ltip award –  of maximum – –  –  –  –
1
  an additional bonus was awarded by the remuneration committee to mr nesis for the successful ipo of the company in november 2011 mr nesis was required to devote a significant amount 
of time above and beyond his normal daytoday responsibilities as ceo to successfully bring about the ipo excluding the additional bonus the annual bonus comprised 49 of maximum 
opportunity in 2011
percentage change in group ceo’s remuneration
excluding the value of longterm incentives the percentage change in total remuneration for the group ceo was a 16 decrease from 
us1081572 in 2013 to us907790 in 2014 due to the significant devaluation of the russian rouble against the us dollar in rouble terms the 
group ceo total remuneration for 2014 increased by 1 compared to 2013 the average percentage change in total remuneration for all 
employees in the year was a 17 decrease mainly driven by the same factor
to ensure the comparability of this figure and to minimise distortions the allemployee remuneration figure is on the basis of fulltime 
permanent employees
relative importance of spend on pay
the chart below shows how staff remuneration costs compared to profit before tax and distributions made to shareholders in 2014 and 2013
total employee 
pay
return to 
shareholders
underlying profit
before tax
58 19 17
relative importance of employee pay usm
● 2013   ● 2014
370
307
125
149
179
282
note underlying profit before tax excludes aftertax amounts of impairment chargesreversals  
and foreign exchange loss
implementation of remuneration policy in the following financial year
in 2015 the committee intends to implement the executive and nonexecutive director remuneration policies as follows
base salary
the policy for determining 2015 base salaries will remain unchanged base salary for the group ceo for 2014 and 2015 is set out below
2015 salary
1
2014 salary
1
 change
roubles
18174000
roubles
15600000 165
group ceo us263662 us428546 38
1
 base salary for 2015 is translated at the closing exchange rate of rouble to us dollar stated by the central bank of the russian federation as at 1 february 2015 base salary for 2014 is 
translated at the average exchange rate of rouble to us dollar stated by the central bank of russian federation during 2014
the remuneration committee decided to increase the base salary of the group ceo in 2014 in rouble terms for the first time since 2011 having 
taken into account inflation in the russian federation as well as significant devaluation of the russian rouble against the us dollar during the 
period in january 2015 the board approved the remuneration committee’s recommendation that a salary increase of 165 be paid to all group 
employees whose salaries are denominated in roubles including the group ceo vitaly nesis the us dollar equivalent of his base salary has 
decreased by 38 compared to 2014 as a result of the significant russian rouble devaluation
pension and benefits
no pension or benefits plans are in place for 2015 except for the defined pension contributions to the mandatory pension fund of the 
russian federation
strategic report governance financial statements appendices
88 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 89 remuneration report
continued
annual bonus
the targets for annual bonus measures are considered commercially sensitive particularly in the gold mining industry because of the sensitivity  
of information that their disclosure may provide to the company’s competitors given that these are largely based outside the uk and hence are not 
subject to the same reporting requirements as the company
longterm incentive plan deferred share awards plan and performance share plan
deferred share awards plan
the committee intends to defer annual bonus awards earned for the 2015 performance period in line with policy
performance share plan
the committee intends to make an award under the psp to the group ceo in 2015 in line with the policy disclosed on pages 8081
vesting is based on relative tsr measured against the constituents of the ftse gold mines index and on the company’s absolute tsr  
peers are ranked and the company’s position determines vesting
tsr vs ftse gold mines payout
below threshold below median performance 0
threshold median performance 20
maximum upper decile performance 100
straightline vesting will occur between the points set out above no award will vest for performance below median or if the company’s absolute 
tsr performance is negative regardless of relative performance
nonexecutive directors
the policy for determining nonexecutive directors’ fees will be unchanged from 2014 fee rates for 2014 and 2015 are set out below
role
2015 fees
us
2014 fees
 us
nonexecutive chairman 412150 412150
senior independent director no additional fee no additional fee
independent nonexecutive director basic fee 164860 164860
additional fees
audit and risk committee chairman 49458 49458
chairman of other committees 24729 24729
committee membership fee not payable to the committee chair 16486 16486
board and committee meeting attendance fee 4946 per meeting 4946 per meeting
note nonexecutive director fees are denominated in british pounds sterling and for presentation purposes the figures are translated to us at crossrates of the british pound and the  
us dollar to the rouble stated by the central bank of the russian federation as at 31 december 2014
remuneration committee
the remuneration committee comprises three independent nonexecutive directors who have no personal financial interest other than as  
a shareholder in the matters to be decided as a result of mr balfour’s decision not to offer himself for reelection as a director a replacement 
member of the remuneration committee was appointed following the agm from october 2014 mr homeniuk no longer holds equity and since 
december 2014 is no longer executive chairman and ceo at polygon gold inc polygon in which polymetal holds a 426 equity ownership  
and one of the three board seats
the membership of the remuneration committee is shown in the table below
name role
leonard homeniuk chairman
jonathan best member
christine coignard member
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 specific remuneration packages for each of the executive 
director the company secretary and the members of senior management including pension rights and any compensation payments
•	 to formulate suitable performance criteria for the performancebased pay of 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
consideration by the directors of matters relating to directors’ remuneration
in 2014 the remuneration committee met three times further business conducted by the committee was approved by written resolutions on one 
further occasion
in 2014 the meetings of the committee covered the following key areas
•	 reviewed kpis for 2014
•	 approved the list of participants in the performance share plan
•	 reviewed an update on regulatory changes to the directors’ remuneration report
•	 reviewed the remuneration policy and annual remuneration report
•	 approved annual bonuses
•	 reviewed the board expenses and reimbursement policy
•	 reviewed the performance of the remuneration committee
•	 evaluated the first year following changes to remuneration reporting and
•	 reviewed the committee’s terms of reference
the board considers that the composition and work of the remuneration committee complies with the requirements of the uk corporate 
governance code following external board evaluation the committee reviewed its performance and noted feedback provided with the assistance 
of external consultants
statement of voting at agm
at the 2014 agm held on 21 may votes for the remuneration report and remuneration policy were as follows
votes for votes against withheld
remuneration report 238310278 9979 494526 021 0
remuneration policy 238263983 9977 540821 023 0
at this meeting minor amendments to the company’s longterm incentive plan were put to a vote with 9978 of shareholders in favour
advisors
the committee continued to use pricewaterhousecoopers llp pwc as independent external remuneration consultants to provide support  
in relation to the design and operation of the new ltip and on the changes associated with the new remuneration report regulations pwc is a 
member of the remuneration consultants’ group rcg and a signatory of the rcg voluntary code of practice and incorporates the principles  
of the voluntary code of practice into its engagement no other services were provided by pwc during 2014 fees paid to pwc in relation to 
remuneration services provided to the committee in 2014 totalled us48000 2013 us54400 with fees quoted in advance and based  
on the level of complexity of the work undertaken the committee reviews the objectivity and independence of the advice it receives from  
pwc at a private meeting held on an annual basis
during its work in 2014 the committee was also aided by the group ceo and senior finance and human resources executives of the company
pwc’s appointment was made by way of a competitive tender the results of which were presented to the remuneration committee for approval
approval
this report was approved by the board of directors on 30 march 2015 and signed on its behalf by
leonard homeniuk
chairman remuneration committee
strategic report governance financial statements appendices
90 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 91 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 preemptive 
shares as defined in the articles are an aggregate number of up to 
19473643 ordinary shares
pursuant to shareholder approval at the general meeting of the 
company held on 14 august 2014 31347078 new ordinary shares  
of the company representing approximately 745 of the company’s 
enlarged issued share capital were issued to sumeru gold bv as part 
of the initial consideration for the acquisition of the kyzyl project in 
kazakhstan further information on the project can be found on 
page 36 following the allotment the total issued share capital of the 
company comprises 420819943 ordinary shares of no par value  
each carrying one vote
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 
38947286 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 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 agm or if earlier at the close 
of business on the date which is 15 months after the date of the 
resolution which granted them being 20 august 2015
approval of share issues consideration for which does not exceed 
us15 million is delegated to the group ceo
dividends
the group’s loss for the year ended 31 december 2014  
attributable to equity holders of the company was us210 million 
2013 loss of us198 million underlying net earnings adjusted  
for the aftertax amount of impairment chargesreversals and foreign 
exchange losses in 2014 were us282 million 2013 us179 million  
in august 2014 the company declared an interim dividend of  
us008 per share which was paid in september 2014 the directors 
have proposed the payment of a final dividend of us013 per  
share 2013 us008 per share in addition a special dividend  
of us020 per share was declared by the company in  
december 2014 and paid in january 2015
annual general meeting
the agm of shareholders of the company will take place on  
20 may 2015 at 930 am bst at the offices of freshfields bruckhaus 
deringer llp 65 fleet street london ec4y 1hs 
auditor
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 auditor is 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 auditor is aware 
of that information
deloitte llp has expressed its willingness to continue in office  
as auditor and a resolution to reappoint it will be proposed at the 
forthcoming agm 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
having taken all matters considered by the board and brought to the 
attention of the board during the year into account we are satisfied  
that the annual report taken as a whole is fair balanced and 
understandable and provides the information necessary for shareholders 
to assess the company’s performance business model and strategy
on behalf of the board
bobby godsell
chairman
30 march 2015
directors’ report
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 2014
corporate governance
refer to pages 68 to 72 for a description of the group’s corporate 
governance structure and policies
going concern
in assessing its going concern status the group has taken account  
of its financial position anticipated future trading performance its 
borrowings and other available credit facilities its forecast compliance 
with covenants on those borrowings and its capital expenditure 
commitments and plans including the potential exercise of the put 
option in respect of the kyzyl transaction as at 31 december 2014  
the group held us157 million of cash and had net debt of 
us1249 million with us810 million of undrawn but committed 
facilities available subject to applicable covenants compliance 
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 report and that it is appropriate to adopt the going concern basis 
in preparing the consolidated financial statements for the year ended 
31 december 2014
financial and business reporting
the board believes that the disclosures set out in the strategic  
report on pages 1 to 65 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 6667 70 of the report
appointment and replacement of directors
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 agm 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
directors’ interests
information on directors’ interests in shares of the company  
is set out in the remuneration report on page 88
directors’ indemnities
to the extent permitted by the companies jersey law 1991 the 
company has indemnified every director and 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 or her 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
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 2014 2013 none
capital structure
the structure of the company’s share capital is detailed in note 32 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 158
details of employee option schemes are set out in the remuneration 
report on pages 80 to 90
there were no acquisitions of the company’s own shares in 2014 
at 31 december 2014 the group and its subsidiaries held no treasury 
shares 31 december 2013 no shares as at 31 december 2014 the 
company had shareholders’ authority to purchase up to 38947286  
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
pursuant to the company’s articles the directors have the power  
to allot equity securities as defined in the articles at the agm  
of the company held in 2014 the power to allot equity securities was 
renewed up to an aggregate number of 129824288 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
strategic report governance financial statements appendices
92 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 93 independent auditor’s report to the members of polymetal international plc directors’ responsibility statement
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 ifrss 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 ifrss 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 strategic 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
30 march 2015
opinion on consolidated financial statements of polymetal international plc
in our opinion the consolidated financial statements
•	 give a true and fair view of the state of the group’s affairs as at 31 december 2014 and of the group’s loss for the year then ended
•	 have been properly prepared in accordance with international financial reporting standards ifrss as adopted by the  
european union and
•	 have been prepared in accordance with the companies jersey law 1991
the financial statements comprise the consolidated income statement consolidated statement of comprehensive income consolidated balance 
sheet consolidated statement of changes in equity consolidated statement of cash flows and the related notes 1 to 36 the financial reporting 
framework that has been applied in their preparation is applicable law and ifrss as adopted by the european union
going concern
we have reviewed the directors’ statement on page 92 that the group is a going concern we confirm that
•	 we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements  
is appropriate and
•	 we have not identified any material uncertainties that may cast significant doubt on the group’s ability to continue as a going concern
however because not all future events or conditions can be predicted this statement is not a guarantee as to the group’s ability to continue  
as a going concern
our assessment of risks of material misstatement
the assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy the allocation of 
resources in the audit and directing the efforts of the engagement team
risk how the scope of our audit responded to the risk
recoverability of ppe and goodwill notes 2 3 18 and 19
as a consequence of the current volatility in gold and silver 
prices and foreign exchange rates and political and economic 
uncertainties in russia the assessment of recoverability of 
ppe carried at us2021 million and goodwill carried at 
us18 million is a key judgment
management has assessed whether any indicators of 
impairment existed at its eight cash generating units ‘cgus’ 
as set out in note 5 where goodwill is allocated to that  
cgu at dukat and mayskoye management performs formal 
impairment testing as at 31 december 2014 to assess whether 
the recoverable amount of the cgu exceeds its net book value
we challenged management’s assessments as to whether indicators  
of impairment or impairment reversal exist for the group’s cgus through 
critical assessment of developments in the wider economic environment and 
the performance of each of the cgus in the year and through meetings with 
local and group operational management
we obtained copies of the valuation models used to determine the recoverable 
amount of cgus and tested the arithmetical accuracy of the models
we challenged the assumptions underpinning the models including  
the discount rate used expected metal prices capital and operating expenditure 
forecasts production profiles and foreign exchange rates this was achieved by 
comparison to third party documentation the review of reserves and resources 
reports consultation with deloitte specialists to critically assess the discount 
rate applied and discussions with operational management we assessed 
whether assumptions had been determined and applied consistently across  
the group
recoverability of exploration and development ed assets notes 2 3 18 and 19
at 31 december 2014 the group held us1076 million in 
respect of ed expenditure on the balance sheet of which 
us854 million related to the acquisition in september 2014  
of altynalmas gold ltd ‘kyzyl’
recoverability is dependent on the expected future success of 
exploration activities ed expenditure is capitalised once it has 
been determined that the mineral property can be economically 
developed the valuation assessment of each asset’s future 
prospects requires significant judgement
management undertook a detailed assessment of ed assets 
for impairment which included a review of developments in the 
year and planned further ed expenditure including the 
expected timings for that spend
we challenged management’s conclusions as to where impairment indicators 
existed and assessed the recoverability of assets by meeting with operational 
management to discuss material ed assets reviewing drilling and other 
testing results in the year and confirming future development plans we 
reviewed boardapproved budgets for 20156 to check that specific 
exploration project spend was committed and we performed detailed  
testing to assess the validity of costs capitalised in the year
strategic report governance financial statements appendices
94 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 95 independent auditor’s report to the members of polymetal international plc
continued
risk how the scope of our audit responded to the risk
existence and valuation of metal inventories notes 2 3 and 23
at 31 december 2014 the group held us381 million  
in respect of metal inventories on the balance sheet
management’s determination of the contained metal levels  
in ore stockpiles and work in progress involves the use of 
sampling techniques and theoretical models
the assessment of the recoverability of metal inventories 
requires judgement both in terms of calculating expected costs 
to process and refine ore stock piles to produce concentrate  
or doré for sale and in terms of estimating future prices to be 
realised on sale
we tested the existence of metal inventories through attending inventory counts 
conducted by management’s experts at material operating locations and 
performing roll forward testing from the count dates through to year end by 
testing management’s metal inventory models
we tested the recoverability of metal inventories through the recalculation of 
projected net realisable values based on expected commodity prices which 
were consistent with prices used in the group’s ppe and goodwill impairment 
calculations and costs to complete we also performed a detailed analytical 
review of management’s inventory costing calculations
we tested inventories for obsolescence by reviewing management’s strategic 
mine plans and assessing whether there is appropriate provisioning in place  
in particular where stockpiles are no longer expected to be used
accounting for and valuation of kyzyl consideration payable notes 2 3 and 4
the acquisition was funded through four elements with a fair 
value total of us676 million comprising cash consideration 
paid issuance of 31 million new polymetal international plc 
shares a put option granted to allow the seller to divest its shares 
in polymetal international plc back to the group at a fixed price of 
us957 per share and deferred contingent consideration based 
on future gold and polymetal share prices 
the determination of fair value of the put option and the 
deferred contingent consideration was complex and  
required the use of blackscholes and monte carlo  
valuation models respectively
determining the key inputs to those models gold and share 
prices expected volatilities the correlation between gold and 
polymetal share prices and discount rates applied required 
significant judgement
we reviewed the acquisition agreement and agreed cash consideration paid to 
bank statements and new shares issued to the share register we recalculated 
the valuation of shares granted based on the spot price at the transaction date
we challenged management’s key model inputs underpinning the put option 
valuation and contingent consideration liability valuations on completion and  
in the case of the contingent consideration again at 31 december 2014 against 
third party sources and recalculated the fair value
we involved deloitte modelling specialists to assist with our challenge of the 
appropriateness of the model used to value the contingent consideration  
to test the integrity of the model and to assist our challenge and testing of the 
key model input assumptions agreeing assumptions to third party data
we reviewed management’s accounting paper to assess that the  
accounting treatment in respect of assets acquired the put option liability  
and corresponding debit to equity and the contingent consideration liability  
was in line with ifrs
last year our report included one other risk which is not included in our report this year provisioning and disclosure in respect of income tax and 
mineral extraction tax liabilities there have been no new material exposures identified in the current year
the description of risks above should be read in conjunction with the significant issues considered by the audit and risk committee discussed  
on page 75
our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole and not to express 
an opinion on individual accounts or disclosures our opinion on the financial statements is not modified with respect to any of the risks described 
above and we do not express an opinion on these individual matters
our application of materiality
we define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a 
reasonably knowledgeable person would be changed or influenced we use materiality both in planning the scope of our audit work and in 
evaluating the results of our work
we determined materiality for the group to be us18 million 2013 us16 million which is 45 2013 56 of adjusted pretax profit and  
21 of equity 2013 09 pretax profit is adjusted to exclude oneoff impairments and net foreign exchange losses recognised which would  
if included significantly distort materiality year on year
we agreed with the audit and risk committee that we would report to the committee all audit differences in excess of us360000  
2013 us320000 as well as differences below that threshold that in our view warranted reporting on qualitative grounds we also report  
to the audit and risk committee on disclosure matters that we identified when assessing the overall presentation of the financial statements
an overview of the scope of our audit
our group audit was scoped by obtaining an understanding of the group and its environment including groupwide controls and assessing the 
risks of material misstatement across the group our audit scope focused primarily on the eight key operating segments voro khakanja dukat 
omolon varvara amurskalbazino mayskoye and kyzyl which was acquired in the year plus the head office entity such that 100 of revenues 
and over 99 of total assets were subject to a full scope audit
the group audit team was involved in the work of the component auditors at all stages of the audit process the signing partner and senior 
members of the group engagement team visited the head office in st petersburg on multiple occasions in the past year and continued to follow  
a programme of regular planned visits to the group’s other business units the group audit team directed and reviewed in detail the work 
performed on significant risks by the component auditors
our audit work was executed at levels of materiality applicable to each individual component which were between us126 million and 
us90 million
matters on which we are required to report by exception 
adequacy of explanations received and accounting records
under the companies jersey law 1991 we are required to report to you if in our opinion
•	 we have not received all the information and explanations we require for our audit or
•	 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
we have nothing to report in respect of these matters
corporate governance statement
under the listing rules we are also required to review the part of the corporate governance statement relating to the company’s compliance with 
the ten provisions of the uk corporate governance code we have nothing to report arising from our review
our duty to read other information in the annual report
under international standards on auditing uk and ireland we are required to report to you if in our opinion information in the annual report is
•	 materially inconsistent with the information in the audited financial statements or
•	 apparently materially incorrect based on or materially inconsistent with our knowledge of the group acquired in the course of performing  
our audit or
•	 otherwise misleading
in particular we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and  
the directors’ statement that they consider the annual report is fair balanced and understandable and whether the annual report appropriately 
discloses those matters that we communicated to the audit and risk committee which we consider should have been disclosed we confirm that 
we have not identified any such inconsistencies or misleading statements
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
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement 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 we also comply with international standard on quality control 1 uk and ireland our audit methodology 
and tools aim to ensure that our quality control procedures are effective understood and applied our quality controls and systems include our 
dedicated professional standards review team and independent partner reviews
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
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 and to identify any information 
that is apparently materially incorrect based on or materially inconsistent with the knowledge acquired by us in the course of performing the audit  
if we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
christopher thomas
for and on behalf of deloitte llp
chartered accountants and recognized auditor london uk
30 march 2015
strategic report governance financial statements appendices
96 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 97 consolidated balance sheet
consolidated statement of comprehensive income
consolidated income statement
year ended
 31 december
 2014
us’000
 31 december 
2013
 us’000 notes 
revenue 6 1690391  1706597 
cost of sales 7 1023219 1123796
reversalswritedowns of metal inventories to net realisable value 23 39174  153327
gross profit  706346  429474 
general administrative and selling expenses 11 131293 168132
other operating expenses 12 131901 88486
impairment of noncurrent assets 18 –  201105
impairment of investment in associate 21 –  12291
share of loss of associates and joint ventures 21 7139 2340
operating profitloss  436013  42880
loss on disposal of subsidiaries 4 –  8746
net foreign exchange losses  559266 74240
change in fair value of contingent consideration liability 30 22788  8131 
finance income  3216  2850 
finance costs 15 40626 42735
loss before income tax  137875 157620
income tax expense 16 71965 40417
loss for the financial year attributable to equity shareholders of the parent  209840 198037
    
loss per share us us
basic 32 053 051
diluted 32 053 051
  
year ended 
 
31 december
 2014
31 december
 2013
31 december
 2014
 31 december
 2013
 
 cents 
per share 
 cents 
per share us’000 us’000
final dividend proposed in relation to the year note 17 130 80 54707 31158
interim dividend note 17 80 10 33666 3879
special dividend declared note 17 200 – 84164 –
 31 december
2014
us’000
31 december
2013
us’000 notes
assets 
property plant and equipment 19 2020924  2094742 
goodwill 20 17970  30889 
investments in associates 21 2107  15651 
noncurrent loans and receivables 22 12890  22853 
deferred tax asset 16 61787  88484 
noncurrent inventories 23 114227  53142 
total noncurrent assets 2229905  2305761 
current inventories 23 468731  727144 
current vat receivable 55367  85135 
trade and other receivables 24 56010  44526 
prepayments to suppliers 20531  18170 
income tax prepaid 9410  8433 
cash and cash equivalents 25 157224  65567 
total current assets 767273  948975 
total assets 2997178  3254736 
liabilities and shareholders’ equity 
accounts payable and accrued liabilities 28 160735 117397
share repurchase obligation 4 275838 –
current borrowings 26 508811 81331
income tax payable 38306 37174
other taxes payable 44139 56885
environmental obligations 27 2991 212
current portion of contingent consideration liability 30 1783 577
total current liabilities 1032603 293576
noncurrent borrowings 26 813824 1029813
contingent consideration liability 30 17506 15523
deferred tax liability 16 205506 63085
environmental obligations 27 51301 65152
other noncurrent liabilities 6954 97
total noncurrent liabilities 1095091 1173670
total liabilities 2127694 1467246
net assets 869484  1787490 
stated capital account 32 1939084  1664170 
sharebased compensation reserve 33 2387  143524 
translation reserve 824594 206836
repurchase obligation for shares issued for business acquisition 4 218722 – 
retained earnings 28671 186632 
total equity 869484  1787490 
the notes on pages 102 to 141 form part of these financial statements these financial statements are approved and authorised for issue by the 
board of directors on 30 march 2015 and signed on its behalf by
vitaly nesis bobby godsell
chief executive chairman of the board of directors
year ended 
 31 december
2014
us’000
31 december
2013
us’000 
loss for the financial year  209840 198037
other comprehensive loss 
effect of translation to presentation currency 617758 153575
total comprehensive loss for the financial year attributable to equity shareholders of the parent 827598 351612
strategic report governance financial statements appendices
98 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 99 consolidated statement of changes in equity consolidated statement of cash flows
year ended 
31 december
 2014
us’000
31 december
2013
us’000 notes
net cash generated by operating activities 35 514839 461667
cash flows from investing activities 
purchases of property plant and equipment 19 209751 319448
net cash outflow on business combinations 4 314344 11934
convertible loan repaid by polygon gold 21 –  10000 
interest received 3317 1965
contingent consideration payment 30 1722 1329
other investing activities 1612 3681
net cash used in investing activities 524112 324427
cash flows from financing activities 
borrowings obtained 26 453991  3099855 
repayments of borrowings 26 252455 2887041
dividends paid 64824 316429
net cash generatedused in by financing activities 136712  103615
net decreaseincrease in cash and cash equivalents 127439  33625 
cash and cash equivalents at the beginning of the financial year 25 65567  18622 
effect of foreign exchange rate changes on cash and cash equivalents 35782 13320 
cash and cash equivalents at the end of the financial year 25 157224  65567 
 notes
number of 
polymetal 
international 
shares
 outstanding
stated
capital
account
sharebased
compensation 
reserve
translation
 reserve
share
purchase 
obligation
retained
earnings
total
equity
balance at  
1 january 2013 383206204  1576123  119291  53261 –  509718  2151871 
total comprehensive loss – –  –  153575 –  198037 351612
sharebased 
compensation 33 – –  24233  –  –  –  24233 
issue of shares in 
exchange for assets 4 775000 13423  –  –  –  –  13423 
issue of shares in 
exchange for business 
acquisitions 4 5491661 74624  –  –  –  –  74624 
dividends 17 – –  –  –  –  125049 125049
balance at  
31 december 2013 389472865  1664170  143524  206836 –  186632  1787490 
total comprehensive loss – –  –  617758 – 209840 827598
sharebased 
compensation 33 – –  2387  – – – 2387 
transfer to retained 
earnings 33 – –  143524 – – 143524 – 
issue of shares in 
exchange for business 
acquisitions 4 31347078 274914  –  – – – 274914 
put option issued for 
business acquision 
recognised in equity 4 – –  –  – 218722 – 218722
dividends 17 – –  –  – – 148987 148987
balance at  
31 december 2014 420819943  1939084  2387  824594 218722 28671 869484 
strategic report governance financial statements appendices
100 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 101 notes to the consolidated financial statements
1 general
corporate information
polymetal group the group is a leading gold and silver mining group operating in russia and kazakhstan
polymetal international plc the company is the ultimate parent entity of polymetal group the company was incorporated on 29 july 2010  
as a public limited company under companies jersey law 1991 its shares are traded on the london and moscow stock exchanges
significant subsidiaries
at 31 december 2014 the company held the following significant mining and production subsidiaries
effective interest held 
name of subsidiary deposits country of incorporation
31 december
 2014
31 december 
2013
cjsc gold of northern urals voro russia 100 100
llc okhotskaya mining and exploration company khakanja russia 100 100
avlayakan
ozerny
cjsc magadan silver dukat russia 100 100
lunnoye
arylakh
goltsovoye
mayskoye gold mining company llc mayskoye russia 100 100
omolon gold mining company llc birkachan russia 100 100
tsokol
danleye
sopka kvartsevaya
albazino resources ltd albazino russia 100 100
amur hydrometallurgical plant llc na russia 100 100
jsc varvarinskoye varvara kazakhstan 100 100
bakyrchik mining venture llp bakyrchik kazakhstan 100 –
jsc inter gold capital bolshevik kazakhstan 100 –
going concern 
in assessing its going concern status the group has taken account of its financial position anticipated future trading performance its borrowings 
and other available credit facilities and its forecast compliance with covenants on those borrowings and its capital expenditure commitments and 
plans including the potential exercise of the put option in respect of the kyzyl transaction as at 31 december 2014 the group held us157 million 
of cash and had net debt of us1249 million including liability for special dividends payable note 17 with us1038 million of undrawn facilities 
available of which us810 million were considered committed
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 report and 
that it is appropriate to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 december 2014
foreign currency considerations
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 changes in foreign exchange rates affect the group’s financial results and performance both the average and year end rub
us exchange rates fluctuated significantly during 2014 in particular in the second half resulting in significant depreciation of the russian rouble 
against the us dollar by the yearend from 1 january to 31 december 2014 the russian rouble depreciated against the us dollar by 722 from 
327 rubus to 563 rubus and the yearly average rate by 235 from 318 rubus in 2013 to 384 rubus in 2014 
foreign exchange losses recognised in the consolidated income statement predominantly arise on the retranslation of us dollardenominated 
external loans in rouble functional currency entities and represent a noncash loss 
the group’s net assets have also reduced with a us618 million noncash loss arising in reserves relating to the translation of the russian rouble 
and kazakh tenge denominated balance sheets into the us dollar presentational currency 
the devaluation of the rouble had a limited effect on operating costs and adjusted ebitda in the first three quarters of the year however this 
benefit became more significant in q4 2014 when a significant devaluation took place should the rubus exchange rate continue at the current 
levels throughout 2015 there will be further significant operating cost and adjusted ebitda benefits relative to 2014 
basis of presentation
the group’s annual consolidated financial statements for the year ended 31 december 2014 are prepared in accordance with international 
financial reporting standards ifrs as adopted by the european union the financial statements have been prepared on the historical cost basis 
except for certain financial instruments and sharebased payments which are measured at fair value 
the accounting policies have been applied in preparing the consolidated financial statements for the year ended 31 december 2014 
new and amended standards adopted by the entity
the following standards became effective for annual periods beginning on or after january 1 2014 for the companies reporting under ifrs  
as adopted by the eu with earlier application permitted the group adopted these standards and they did not have a material impact on its 
consolidated financial statements 
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 
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 
ifrs 12 disclosures of interests in other entities accompanies 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 
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 
ias 32 offsetting financial assets and financial liabilities amendments to ias 32 on december 16 2011 the iasb published amendments to  
ias 32 financial instruments presentation to clarify the application of the offsetting requirements the group has assessed that whether certain  
of its financial assets and financial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application  
of the amendments has had no impact on the amounts recognised in the group’s consolidated financial statements
amendments to ias 36 recoverable amount disclosures for nonfinancial assets remove the requirements to disclose the recoverable amount  
of a cashgenerating unit cgu to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been  
no impairment or reversal of impairment of the related cgu the amendments introduce additional disclosure requirements applicable to when  
the recoverable amount of an asset or a cgu is measured at fair value less costs of disposal the application of these amendments has had no 
material impact in the disclosures in the group’s consolidated financial statements
amendments to ias 39 novation of derivatives and continuation of hedge accounting and ifric 21 levies issued in may 2013 on the accounting 
for levies imposed by governments has had no material impact on the group’s consolidated financial statements
2 significant accounting policies
basis of consolidation
subsidiaries
the consolidated financial statements of the group include the financial statements of the company and its subsidiaries from the date that control 
effectively commenced until the date that control effectively ceased control is achieved where the company is exposed or has rights to variable 
returns from its involvement with the investee and has the ability to affect those returns through its power over the investee
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 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 company
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
strategic report governance financial statements appendices
102 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 103 notes to the consolidated financial statements
continued
2 significant accounting policies continued
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
•	 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 cashgenerating 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 arrangement 
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
equity method of accounting
under the equity method an investment in an associate 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 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 impairment of assets
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 as well as for the investment holding companies including polymetal 
international plc the functional currency of the group’s entities located and operating in kazakhstan jsc varvarinskoye bakyrchik mining  
venture llp jsc inter gold capital 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
due to significant devaluation of the russian rouble during second half of the year ended 31 december 2014 the group translated income and 
expenses occurred in this period on monthly basis at average monthly exchange rates
strategic report governance financial statements appendices
104 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 105 notes to the consolidated financial statements
continued
2 significant accounting policies continued
functional and presentation currency continued
exchange rates used in the preparation of the consolidated financial statements were as follows
 
31 december 
2014
31 december
2013
russian roubleus dollar 
year end 5626 3273
average for the year 3842 3185
average for 
the six months ended 30 june 2014 3498 
july 3464 
august 3611 
september 3788 
october 4077 
november 4591 
december 5554 
kazakh tengeus dollar 
year end 18235 15361
average for the year 1791 15214
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
foreign currency transactions
transactions in currencies other than an 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 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 according to the jorc code 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 note 5 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 
mineral rights for the assets under development are included within exploration and development when a production phase is started mineral 
rights are transferred into mining assets and are depreciated as described below
capital constructioninprogress
capital constructioninprogress assets are measured at cost less any recognised impairment depreciation commences when the assets are 
ready for their intended use 
exploration and development assets
mineral exploration and evaluation costs including geophysical topographical geological and similar types of costs are capitalised into 
exploration and development assets if management concludes that future economic benefits are likely to be realised and determines that 
economically viable extraction operations can be established as a result of exploration activities and internal assessment of mineral resources 
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 when these costs are incurred
nonmining assets
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
during the production phase of a mine when the benefit from the stripping activity is the improved access to a component of the ore body in future 
periods the stripping costs in excess of the average ore to waste ratio for the life of mine of that component are recognised as a noncurrent asset 
after initial recognition the stripping activity asset is depreciated on a systematic basis unitofproduction method over the expected useful life of 
the identified component of the ore body made accessible as a result of the stripping activity
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 jorc code
leases
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 the carrying amounts of all the cashgenerating units are 
assessed against their recoverable amounts 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 the dcf method is attributable to the development of proved and probable 
reserves and certain resources where a relevant resourcetoreserve conversion ratio can be reasonably applied
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 stockpiles are stated at the lower of production cost  
or net realisable value production cost is determined as the sum of the applicable expenditures 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 in
process metal concentrate and doré are valued at the average total production costs at each asset’s relevant stage of production ore stockpiles 
are valued at the average cost of mining that ore where ore stockpiles 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
strategic report governance financial statements appendices
106 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 107 notes to the consolidated financial statements
continued
2 significant accounting policies continued
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 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 30
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
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 30
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 less 
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
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
strategic report governance financial statements appendices
108 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 109 notes to the consolidated financial statements
continued
2 significant accounting policies continued
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 it relates to items that are recognised in the 
consolidated statement of comprehensive income or directly in equity in which case the current and deferred tax is 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 bullions 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 or fixed price however the group does not 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 bullion market association lmba 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 account 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
at the annual general meeting in june 2013 shareholders approved the new longterm incentive plan the ‘ltip’ under the new ltip options  
are awarded on the annual basis after the publication of annual results and before the agm the first grant of options under the ltip took place  
on 22 april 2014 total number of options granted under the ltip amounts to 2464041 shares
the fair value of the awards granted in april 2014 was estimated using a monte carlo model valuation see note 33 
under the management bonus deferral award plan which is defined in the remuneration report a total amount of 103936 shares was granted 
which will be released over a period of three years deferred bonus was measured at share price at grant date and will be prorated across periods 
to the different vest dates
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
the previous ltip scheme which was granted in 2010 had fully vested by 30 june 2013 these options lapsed in h1 2014 and accordingly  
the related balance of us1435 million in the sharebased payment reserve was transferred into 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
3 critical accounting judgements and key sources of estimation uncertainty
the following are the critical judgements apart from those involving estimations see below that 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 include 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 mayskoye plant and underground mine reached commercial production in april 2013
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 
strategic report governance financial statements appendices
110 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 111 notes to the consolidated financial statements
continued
3 critical accounting judgements and key sources of estimation uncertainty continued
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
key sources of estimation uncertainty
preparation of the consolidated financial statements in accordance with ifrs requires 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
•	 valuation of stockpiles and work inprocess
•	 sharebased compensation
•	 environmental obligations
•	 contingencies and
•	 income taxes
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 unitsofproduction 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 
•	 carrying value of deferred tax assets and liabilities where changes in estimated reserves affect the carrying value of the relevant assets and 
liabilities and
•	 contingent consideration liabilities when it depends on future sales of metal produced by certain mines
depreciation
mining assets are depreciated using the unitsofproduction method except where the useful lives of the assets are shorter than the life of the mine 
the unitsofproduction depreciation calculations are based on proved and probable reserves under the jorc code 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
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
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 cash
generating 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
stockpiles and work inprocess
in determining mine operating costs recognised in the consolidated income statement the group’s management uses survey and assay 
techniques to estimate 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 2014 the carrying value of the ore stockpiles was us207 million and work inprocess was 
us51 million
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 penalties and interest 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
strategic report governance financial statements appendices
112 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 113 notes to the consolidated financial statements
continued
4 acquisitions and disposals
a business combinations and asset acquisitions
kyzyl acquisition
on 4 september 2014 the group acquired 100 per cent of the share capital of altynalmas gold ltd aag the holding company for the kyzyl gold 
project in kazakhstan 
the initial consideration for this acquisition comprised us3185 million in cash and 31347078 new ordinary shares of polymetal international plc 
issued to sumeru gold bv representing approximately 745 of the company’s enlarged issued share capital the number of shares issued was 
determined by dividing us300 million by the unweighted mean average closing price of polymetal shares on the main market of the london stock 
exchange in the 12 calendar months ending three trading days before completion which equated to us957027 per share using the share price 
in completion gave a fair value for the share consideration of us2749 million deferred additional cash consideration up to an agreed cap 
contingent on certain conditions being met and dependent on the relative dynamics of the gold price and the price of polymetal’s shares  
may be payable over the next seven years and this forms the basis for a contingent consideration liability which was valued on acquisition  
at us277 million 
sumeru gold bv is entitled to a put option giving it a right to require polymetal to acquire or procure acquirers for the consideration shares by 
notice to polymetal during the one month period immediately following the first anniversary of completion at a price per consideration share equal 
to us957027 on completion polymetal recognised the repurchase obligation at the net present value of maximum repayment of us300 million 
which approximates to us273 million with a corresponding decrease in equity the put option has an exercise period from 4 september to 
4 october 2015 when the option lapses or is exercised both the liability and the corresponding balance in equity will be derecognised  
after any cash payments to the vendor are taken into account the balancing figure goes through retained earnings
aag meets the definition of a business pursuant to ifrs 3 thus it was accounted for at fair value using the acquisition method 
assets acquired and liabilities recognised at the date of acquisition
the initial accounting of the acquisition of aag has only been provisionally determined at the end of the reporting period based on the directors’ 
best estimate
the management believes that this business acquisition does not give rise to goodwill and excess of consideration over net asset assets of the 
acquiree should be fully attributed the mineral rights the amount recognised in respect of the identifiable assets acquired and liabilities assumed 
are set out in the table below
 us’000
assets acquired and liabilities recognised at the date of acquisition
cash and cash equivalents 4156 
mineral rights exploration and development assets 853600 
other property plant and equipment 6144 
other assets 1583 
environmental obligations 16346
contingent liabilities 5627
deferred income taxes 166325
other liabilities 1507
net assets acquired 675677 
consideration transferred 
cash 318500 
fair value of shares issued 274914 
contingent consideration 27699 
seller put option 54565 
total consideration 675677 
net cash outflow on acquisition 314344 
contingent liabilities assumed in the business combination of us56 million represent social obligations set by the subsoil use contracts being 
amounts committed to be spent on professional trainings and other social engagements over the life of project the potential undiscounted amount 
of future payments that the group could be required to make approximates to us10 million refer to note 29
no significant financial assets were acquired in the business combination
valuation of consideration
the fair value of the 31347078 ordinary shares issued as part of the consideration paid for aag was determined based on the spot price at the 
acquisition date being us877
the deferred additional cash consideration described above meets the definition of contingent consideration and was fair valued as of the 
acquisition date using a monte carlo valuation simulation potential amounts payable for each of the next seven years are linked to the average gold 
price in each period with a deduction for the effect of the share value appreciation the average annual gold price must exceed us1250oz for 
any consideration to be payable the total amount payable is limited to us500 million the key assumptions used in the contingent consideration 
calculation are set out below
gold price volatility 716
share price volatility 312
constant correlation between gold price and share price 933
dividend yield 2
gold price as of the acquisition date us12715
share price as of the acquisition date us877
discount rate 9
the acquisition date fair value was calculated at us277 million
at acquisition the fair value of the seller’s put option was calculated using a blackscholes option pricing model using assumptions consistent  
with the monte carlo simulation the fair value has been calculated at us546 million
impact of the acquisition on the result of the group
acquisitionrelated costs included in other operating expenses amount to us4 million note 12 
altynalmas gold ltd aag contributed us3 million loss to the group’s loss for the period between the acquisition date and year end aag 
generated no revenues in 2014 had the acquisition completed on the first day of the financial year it would have increased the group’s loss  
by us101 million
north kaluga deposit
on 29 august 2014 polymetal international plc acquired 100 ownership in the north kaluga property following the restructuring of the  
jsc uralpolymetal which was previously classified as an associate in the ifrs consolidated financial statements
under the terms of the restructuring agreement uralpolymetal was dissolved and the asset and liabilities of the former associate were distributed 
amongst the shareholders polymetal received a 100 interest in the north kaluga property and assumed us20 million of debt the other assets 
and liabilities of the associate were transferred to the other shareholders polymetal owned 4999 of uralpolymetal prior to the transaction and 
the asset had nil carrying value in the group’s financial statements due to writeoff in 2013 following the commodities price decline
north kaluga 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  
as a result the group acquired mineral rights at cost of us209 million debt amounting to us203 million and other current liabilities of 
us06 million
other minor acquisitions
during the year ended 31 december 2014 the group acquired several minor companies which hold exploration licences and capital construction 
in progress assets the acquired subsidiaries do not meet the definition of a business pursuant to ifrs 3 2008 thus they were accounted for as 
an acquisition of a group of assets the group purchased mineral rights at total cost of us17 million capital construction in progress at a cost  
of us26 million and other current liabilities of us30 million for a total cash consideration of us13 million
olymp ltd
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 
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 at cost of us134 million and other current liabilities of us001 million
strategic report governance financial statements appendices
114 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 115 notes to the consolidated financial statements
continued
4 acquisitions and disposals continued
a business combinations and asset acquisitions continued
zao ‘maminskaya gornorudnaya kompania’
on 20 february 2013 the group 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 the ordinary share capital and debt in 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 consideration payable in cash and equalling its carrying value of us80 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 based on the consideration paid and the fair value of the assets acquired was as follows
us’000
net assets acquired
mineral rights 115127
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 in polymetal international plc 74624
cash consideration for equity investment 3900
cash consideration for debt investment 8034
total consideration 86558
b disposal of subsidiary
habarovsk exploration company llc
on 22 october 2013 the group sold its subsidiary habarovsk exploration company llc for us35 million in deferred cash consideration to an 
unrelated party the loss on disposal was calculated as follows
us’000
property plant and equipment 7124
other noncurrent assets 1395
current assets 4374
current liabilities 598
noncurrent liabilities 10121
net assets disposed of 2174
consideration receivable 3475
intercompany debt assigned to acquirer 10047
loss on disposal 8746
5 segment information
the group has eight reportable segments 2013 seven
•	 voro cjsc gold of northern urals
•	 khakanja llc okhotskaya mining and exploration company svetloye llc
•	 dukat cjsc magadan silver olymp llc
•	 omolon omolon gold mining company llc
•	 varvara jsc varvarinskoye
•	 amurskalbazino albazino resources ltd amur hydrometallurgical plant llc
•	 mayskoye mayskoye gold mining company llc and
•	 kyzyl bakyrchik mining venture llp jsc inter gold capital
reportable segments are determined based on the group’s internal management reports and are separated based on the group’s geographical 
structure minor companies and activities management exploration purchasing and other companies which do not meet the reportable segment 
criteria are disclosed within the corporate and other segment 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 except for varvara 
and kyzyl which are 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 amortisation impairment of noncurrent assets write
downs and reversals of inventory to net realisable value sharebased compensation expenses rehabilitation expenses gains or losses arising on 
acquisition or disposal of subsidiaries foreign exchange gains or losses changes in the fair value of contingent consideration finance income 
finance costs income tax expenses and other tax exposure accrued within other operating expenses the accounting policies of the reportable 
segments are consistent with those of the group’s accounting policies under ifrs
revenue shown as corporate and other comprises principally intersegment revenue relating to the supply of inventories spare parts and fixed 
assets and rendering management services 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
strategic report governance financial statements appendices
116 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 117 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 2014 ’000 voro khakanja dukat omolon varvara
amursk
albazino mayskoye kyzyl
total 
reportable 
segments
corporate 
and other
intersegment 
operations 
and balances total
revenue from external customers 204490 157771 485608 276930 120374 298547 145242 – 1688962 1429 – 1690391
intersegment revenue 1527 554 383 168 – 3893 – – 6525 237297 243822 –
cost of sales excluding 
depreciation depletion and 
writedown of inventory  
to net realisable value 53938 81538 229648 115500 62618 139806 102105 – 785153 163343 187113 761383
cost of sales 70104 101808 287022 180442 76051 197038 134524 – 1046989 163343 187113 1023219
depreciation included  
in cost of sales 16708 19518 57520 63121 12760 55837 30202 – 255666 – – 255666
writedown of nonmetal inventory 
to net realisable value 106 – 109 619 375 966 2112 – 4069 – – 4069
rehabilitation expenses 648 752 37 1202 298 429 105 – 2101 – – 2101
general administrative and 
selling expenses excluding 
depreciation amortisation and 
sharebased compensation 6416 10531 10753 9095 4260 7838 11704 1973 62570 74084 12563 124091
general administrative  
and selling expenses 15915 16492 20322 14299 5951 14785 17793 2199 107756 80789 57252 131293
intercompany management 
services 8766 5452 8685 5074 1458 6839 5552 – 41826 2863 44689 –
depreciation included in sga 733 509 884 130 233 108 537 226 3360 1455 – 4815
sharebased compensation – – – – – – – – – 2387 – 2387
other operating expenses 
excluding additional tax charges 4165 6015 15990 10371 8972 21526 3919 852 71810 37220 3362 112392
other operating expenses 4537 6015 28580 12721 11871 21526 5217 852 91319 37220 3362 131901
mining taxes vat penalties and 
accrued interest 372 – 12590 2350 2899 – 1298 – 19509 – – 19509
share of loss of associates  
and joint ventures – – – – – – – – – 7139 – 7139
adjusted ebitda 141498 60241 229600 142132 44524 133270 27514 2825 775954 43060 47508 685386
depreciation expense 17441 20027 58404 63251 12993 55945 30739 226 259026 1455 – 260481
rehabilitation expenses 648 752 37 1202 298 429 105 – 2101 – – 2101
writedown of nonmetal inventory 
to net realisable value 106 – 109 619 375 966 2112 – 4069 – – 4069
reversalwritedown of metal 
inventory to net realisable value 5 4982 548 34287 5845 – 5207 – 39174 – – 39174
sharebased compensation – – – – – – – – – 2387 – 2387
mining taxes penalties  
and accrued interest 372 – 12590 2350 2899 – 1298 – 19509 – – 19509
operating profitloss 124222 44444 159300 108997 22114 75930 1533 3051 530423 46902 47508 436013
foreign exchange loss 559266
loss on disposal of subsidiaries –
change in fair value  
of contingent consideration 22788
finance income 3216
finance costs 40626
loss before tax 137875
income tax expense 71195
loss for the financial period 209840
current metal inventories 35937  26714  54853  79007  24776  39953  43419  –  304659  112  3970 300801
current nonmetal inventories 4501  33230  26621  30387  16109  22445  28819  975  163087  15055  10212 167930
noncurrent segment assets 
property plant and equipment net 65362  55459  218414  95106 124093  311005  178142 862649 1910230  132954  22260 2020924
goodwill – –  5164 – – – 12806 – 17970 – – 17970
noncurrent inventory 1394  23380  6364  52263  18678  6846  6555  –  115480  –  1253 114227
investments in associates – – – – – – – – – 2107 – 2107
total segment assets 107194 138783 311416 256763 183656 380249 269741 863624 2511426 150228 37695 2623959
additions to noncurrent assets 
property plant and equipment 17695  34814  32943  20623  21498  43698  18606  3641  193518  30184 – 223702
acquired in business combinations 
and acquisition of group of assets 20912 – – – – – – 859744  880656  4307 – 884963
for the year ended  
31 december 2013 ’000 voro khakanja dukat omolon varvara
amursk
albazino mayskoye
total 
reportable 
segments
corporate 
and other
intersegment 
operations 
and balances total
revenue from external customers 214712 202641 531587 222795 189527 293778 49547 1704587 2010 – 1706597
intersegment revenue – – – 1298 760 605 – 2663 411786 414449 –
cost of sales excluding depreciation 
depletion and writedown of inventory  
to net realisable value 69174 102168 270576 134967 106748 172194 40612 896789 298092 316984 877897
cost of sales 86437 126345 330341 188623 123465 231933 56409 1143553 297227 316984 1123796
depreciation included in cost of sales 16990 23627 60666 43154 16392 59673 13177 233679 – – 233679
writedown of nonmetal inventory to net 
realisable value 166 435 1847 10005 325 117 2594 11561 865 – 10696
rehabilitation expenses 107 115 596 497 – 183 26 1524 – – 1524
general administrative and selling expenses 
excluding depreciation amortisation and 
sharebased compensation 8086 9459 13469 11495 5074 9536 10255 67374 99476 26805 140045
general administrative and selling expenses 19776 16497 24976 17876 5555 12630 12362 109672 127384 68924 168132
intercompany management services 10780 6799 10737 6232 302 2927 1882 39659 2460 42119 –
depreciation included in sga 910 239 770 149 179 167 225 2639 1215 – 3854
sharebased compensation – – – – – – – – 24233 – 24233
other operating expenses excluding 
additional tax charges 7325 6056 18221 14334 4368 9342 2971 62617 19630 5577 87824
other operating expenses 7325 6056 18622 14334 4629 9342 2971 63279 19630 5577 88486
mining taxes penalties and accrued interest – – 401 – 261 – – 662 – – 662
share of loss of associates and joint ventures – – – – – – – – 2340 – 2340
adjusted ebitda 130127 84958 228971 63297 74097 103311 4291 680470 5742 76237 598491
depreciation expense 17900 23866 61436 43303 16571 59840 13402 236318 1215 – 237533
rehabilitation expenses 107 115 596 497 – 183 26 1524 – – 1524
writedown of nonmetal inventory  
to net realisable value 166 435 1847 10005 325 117 2594 11561 865 – 10696
impairment of noncurrent assets – 104404 – 16587 80114 – – 201105 – – 201105
impairment of investment in associate – – – – – – – – 12291 – 12291
writedowns of metal inventories to net  
realisable value 2559 28160 11954 75229 19301 – 16124 153327 – – 153327
sharebased compensation – – – – – – – – 24233 – 24233
mining taxes penalties and accrued interest – – 401 – 261 – – 662 – – 662
operating profitloss 109395 72022 156431 82324 42475 43405 36437 75973 42616 76237 42880
foreign exchange loss 74240
loss on disposal of subsidiaries 8746
change in fair value of contingent consideration 8131
finance income 2850
finance costs 42735
loss before tax 157620
income tax benefit 40417
loss for the financial period 198037
current metal inventories 62154 53671 83533 72332 14527 84716 59471 430404 222 3474 427152
current nonmetal inventories 8898 54548 51414 57494 23882 46804 50354 293394 25420 18822 299992
noncurrent segment assets 
property plant and equipment net 93866 59741 416822 250847 150564 568599 325580 1866019 264395 35672 2094742
goodwill – – 8876 – – – 22013 30889 – – 30889
noncurrent inventory 2554 5165 11135 16189 9178 4802 5905 54928 759 2545 53142
investments in associates – – – – – – – – 15651 – 15651
total segment assets 167472 173125 571780 396862 198151 704921 463323 2675634 306447 60513 2921568
additions to noncurrent assets 
property plant and equipment 19701 39443 40309 57317 42323 70997 58006 328096 40650 11929 356817
acquired in business combinations and 
acquisition of group of assets – – 13400 – – – – 13400 118079 – 131479
strategic report governance financial statements appendices
118 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 119 notes to the consolidated financial statements
continued
6 revenue
revenue analysed by geographical regions of customers is presented below
 year ended
31 december 
2014
us’000
31 december 
2013
us’000
sales within the russian federation 1165729  1060935 
sales to kazakhstan 169242  170178 
sales to korea 158625  90512 
sales to china 133497  165368 
sales to japan 51864  65183 
sales to europe 9716  151970 
total metal sales 1688673  1704146 
other sales 1718  2451 
total 1690391  1706597 
included in revenues for the year ended 31 december 2014 are revenues which arose from sales to three of the group’s largest customers 
amounting to us573 million us221 million and us164 million respectively 2013 us391 million us273 million and us175 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 2014 year ended 31 december 2013
thousand
 ounces
 tonnes 
shipped
unaudited
thousand
 ounces
 tonnes
 payable
unaudited
average 
price
us dollar 
per troy 
ouncetonne
 payable
 unaudited us’000
thousand
 ounces
 tonnes 
shipped
 unaudited
thousand
 ounces
tonnes 
payable
unaudited
average
price
us dollar
per troy
ouncetonne
 payable
 unaudited us’000
gold thousand ounces 958  943  1231 1160984 818  808  1326 1070847
silver thousand ounces 29661  29342  177 520469 27414  27376  220 592576
copper tonnes 1093  1029  7015 7220 6468  6141  6631 40723
total 1688673 1704146
7 cost of sales excluding writedowns of metal inventories to net realisable value
 year ended
 
31 december
 2014
us’000
31 december
 2013
us’000
cash operating costs 
onmine costs note 8 391256  393067 
smelting costs note 9 363382  384192 
purchase of ore from third parties 1506  18836 
purchase of ore from related parties note 34 –  13983 
mining tax 110064  109421 
total cash operating costs 866208  919499 
depreciation and depletion of operating assets note 10 291940  245483 
rehabilitation expenses 2714  1524 
total costs of production 1160862  1166506 
increase in metal inventories 142082 53985
writedown of nonmetal inventories to net realisable value note 23 4069  10696 
cost of other sales 370  579 
total 1023219  1123796 
mining tax is a royalty payable in the 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 the case where 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
 2014
us’000
31 december 
2013
us’000
consumables and spare parts 101252  114679 
services 184364  165936 
labour 103704  109475 
taxes other than income tax 1015  609 
other expenses 921  2368 
total note 7 391256  393067 
9 smelting costs
 year ended
 
31 december
 2014
us’000
31 december 
2013
us’000
consumables and spare parts 156904  171358 
services 138609  139489 
labour 65177  70650 
taxes other than income tax 675  1021 
other expenses 2017  1674 
total note 7 363382  384192 
10 depletion and depreciation of operating assets
 year ended
 
31 december 
2014
us’000
31 december
 2013
us’000
onmine 205856 159218
smelting 86084 86265
total note 7 291940 245483
depreciation of 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 
from the group’s calculation of adjusted ebitda see note 5 also excludes amounts absorbed into unsold metal inventory balances
onmine depreciation increased due to significant depreciation of the deferred stripping assets and increased mining volumes on several deposits 
during the year ended 31 december 2014
strategic report governance financial statements appendices
120 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 121 notes to the consolidated financial statements
continued
11 general administrative and selling expenses
 year ended
 
31 december
 2014
us’000
31 december 
2013
us’000
labour 93168  106952 
services 16664  18739 
sharebased compensation 2387  24233 
depreciation 4815  3854 
other  14259  14354 
total 131293 168132
12 other operating expenses
 year ended
 
31 december 
2014
us’000
31 december 
2013
us’000
 exploration expenses  50525  24144 
 taxes other than income tax  22191  21164 
 mining taxes vat penalties and accrued interest note 16  19509  662 
 social payments  9247  10709 
 housing and communal services  7191  6547 
 loss on disposal of property plant and equipment  4473  9503 
 business acquisition related costs note 4  4039  – 
 allowance for doubtful debts 213 1089 
 change in estimate of environmental obligations  723 1064
 other expenses  15662  15732 
 total  131901  88486 
mining taxes vat 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 
exploration expenses include write downs of us356 million 2013 nil recognised within exploration and development assets note 19 
operating cash flow spent on exploration activities amounts to us158 million 2013 us232 million
 
13 employee costs
  year ended 
 
31 december
2014
us’000
31 december
2013
us’000
wages and salaries 245494  281316 
social security costs 59321  64557 
sharebased payments expense 2387  24233 
total payroll costs 307202  370106 
reconciliation 
less employee costs capitalised 36954 52003
less employee costs absorbed into unsold metal inventory balances 18079 13815
employee costs included in operating costs 252169  304288 
the weighted average number of employees during the year ended 31 december 2014 was
  year ended 
31 december
 2014
number
31 december
 2013
number
voro 936  913 
khakanja 1049  1144 
dukat 1836  1952 
omolon 805  910 
varvara 727  730 
amurskalbazino 1194  1158 
mayskoye 870  941 
kyzyl 110 – 
corporate and other 1326  1484 
total 8853  9232 
compensation for key management personnel is disclosed within note 34
14 auditor’s remuneration
 year ended 
 
31 december 
2014
us’000
31 december 
2013
us’000
fees payable to the auditor and their associates for the audit of the company’s annual report
united kingdom 342  353 
overseas 665  595 
total audit fees 1007  948 
auditrelated assurance services – half year review 400  527 
total audit and halfyear review fees 1407  1475 
taxation compliance services ie related to assistance with corporate tax returns –  16 
capital project consulting services –  394 
other services 579  10 
total nonaudit fees 579  420 
total fees 1986  1895 
other service fees relate to work on the class 1 circular for the altynalmas acquisition services
15 finance costs
  year ended 
 
31 december
 2014
us’000
31 december
2013
us’000
interest expense on borrowings 33793  29972 
unwinding discount on borrowings –  9070 
unwinding discount on repurchase obligation note 4 2551 – 
unwinding of discount on decommissioning obligations 4282  3693 
total 40626  42735 
interest expense on borrowings excludes borrowing costs capitalised in the cost of qualifying assets of us51 million and us61 million during 
the years ended 31 december 2014 and 2013 respectively these amounts were calculated based on the group’s general borrowing pool and  
by applying an effective interest rate of 35 and 299 respectively to cumulative expenditure on such assets
the repurchase obligation relates to the put option issued to the seller of altynalmas gold ltd aag giving it a right during a specified period to 
require polymetal international plc to acquire or procure acquirers for the 31347078 consideration shares issued by polymetal international plc  
at a price of us957027 per share note 4
strategic report governance financial statements appendices
122 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 123 notes to the consolidated financial statements
continued
16 income tax
the income tax expense for the year ended 31 december 2014 is as follows
 year ended 
 
31 december 
2014
us’000
31 december 
2013
us’000
current income taxes 79003  105096 
excess profit taxes payable in kazakhstan  –  8313 
deferred income taxes 7038 72992
 71965  40417 
a reconciliation between the reported amount of income tax expense attributable to loss before income tax for the year ended 31 december 2014 
is as follows
  year ended 
 
31 december 
2014 
us’000
31 december 
2013 
us’000
loss before income tax  137875 157620
statutory income tax expense at the tax rate of 20 27575 31524
loss incurred in taxfree jurisdictions 75444  8309 
sharebased compensation 375  4720 
excess profit taxes payable in kazakhstan –  8313 
income tax provision in respect of magadan silver 6865 – 
deferred tax asset provided for 3627 –
adjustments recognised in the current year in relation to the current tax of prior years 2016  15210
tax effect of nondeductible expenses and other permanent differences 15245  35389 
total income tax expense 71965  40417 
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 payment expenses 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 and cjsc magadan silver up to 
2012 omolon gold mining company llc llc okhotskaya mining and exploration company cjsc and mayskoye gold mining company llc  
up to 2010 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 
tax exposures recognised in income tax and other expenses
at 31 december 2014
in respect of the year ended 31 december 2014 the group has identified and provided for additional mining tax exposures amounting to 
us24 million at omolon us13 million at mayskoye us04 million at voro and various varvara tax exposures of us29 million the group has 
also accrued interest related to magadan silver tax exposures previously identified of us41 million and mining tax exposure for 2013 amounting 
to us24 million during the year ended 31 december 2014 the group has also identified a vat exposure of us24 million including penalties and 
interest and an income tax exposure of us102 million including penalties and interest of us36 million at magadan silver which were provided 
for vat and mining tax exposures including penalties and interest as well as penalties and interest related to income tax exposure are recognised 
within other operating expenses note 12
tax penalties and interest of us39 million previously accrued were paid at magadan silver and varvara during the year
total provision as of 31 december 2014 is us361 million 
at 31 december 2013
during the year ended 31 december 2013 the group paid us83 million of mining taxes interest and penalties in respect of the magadan silver 
mineral extraction tax case us171 million of varvara excess profits tax provided for in 2012 and us73 million of various varvara exposures 
in respect of the year ended 31 december 2013 no additional significant income tax and mining tax exposures have been provided for
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
loans
us’000
other
us’000
total
us’000
at 1 january 2014 13072  5481 91254 7992  85372  3445  12253  25399 
charge to income 
statement 40 18080 4094 239 31647 670 3384 7038
acquisition 3175 – 170625 1125 – – – 166325
exchange differences 5429 7780 39160 2751 42741 1648 4202 9831
at 31 december 2014 10858  15781 226813 6605  74278  2467 4667  143719
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 presented for financial reporting purposes
  year ended 
 
31 december 
2014
us’000
31 december
 2013
us’000
deferred tax liabilities 205506 63085
deferred tax assets 61787 88484 
  143719 25399 
tax losses carried forward represent amounts available for offset against future taxable income generated by zk mayskoye llc albazino 
resources llc amursky hydrometallurgy plant llc svetloye llc and the jsc polymetal during the period up to 2024 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 2014 and 31 december 2013 the aggregate tax losses carried forward were 
us3714 million rub 206 billion and us4268 million rub 139 billion respectively
the group believes that recoverability of the recognised deferred tax asset dta of us742 million at 31 december 2014 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 2014 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
31 december
 2014
us’000
31 december
 2013
us’000
year ended 31 december 2014 – 2680
31 december 2015 4320 7401
31 december 2016 3660 6229
31 december 2017 5199 8971
31 december 2018 14674 25059
31 december 2019 10483 19939
31 december 2020 11315 22272
31 december 2021 12886 67575
31 december 2022 63881 90698
31 december 2023 90885 176034
31 december 2024 154085 –
total loss carried forward for tax purposes 371388 426858
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 us1231 million 
2013 us1802 million
strategic report governance financial statements appendices
124 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 125 notes to the consolidated financial statements
continued
17 dividends
a final dividend has been proposed in relation to the year of 13 cents per share giving a total expected dividend of us547 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 
on 4 december 2014 the board of directors approved a special dividend of 20 cents per share the liability of us842 million as at 
31 december 2014 is included within accounts payable and accrued liabilities
dividends paid during the year ended 31 december 2014 are detailed in the table below
 year ended
 31 december 2014 31 december 2013
 cents per share us’000 cents per share us’000
final dividend paid 80 31158 310 121247 
interim dividend paid 80 33666 10 3879 
special dividend paid – – 500 191303 
   64824  316429
18 impairment losses
the group assesses the impairment of property plant and equipment when indicators of impairment exist and assess cash generating units cgu 
where goodwill is attributed for impairment on an annual basis when updated proved and probable reserves and mineral resources estimates and 
life of mine plans are available or when indicators of impairment exist
each cash generating unit is determined on the basis of the group’s geographical structure and equals the group’s reporting segments  
refer to note 5 the carrying amount of cash generating units excludes certain exploration assets included within the segment assets which are 
currently under development and have not reached a stage where there is enough information to estimate the future cash flows that might be 
eventually generated by the project these were assessed for impairment separately
the carrying amounts of all the cashgenerating units were assessed against their recoverable amounts 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 the dcf 
method is attributable to the development of proved and probable reserves and certain resources where a relevant resourcetoreserve conversion 
ratio can be reasonably applied
year ended 31 december 2014
the group analyses whether indicators of impairment exist based on internal and external information taking into account both global and 
domestic operating environment factors 
based on current proved and probable reserves and mineral resources estimates and life of mine plans no indicators of impairment were identified 
for individual cash generating units
during the year ended 31 december 2014 gold silver and copper market prices were stable being close to commodity prices assumptions  
used in 2013 impairment tests performed see below at the same time the russian economy experienced challenges resulting in a significant 
depreciation of russian rouble in the second half of 2014 and an increase in the key interest rate established by central bank of the  
russian federation 
the group benefits from russian rouble depreciation against the us dollar as it leads to decreases in the group’s operating costs which are 
mainly denominated in russian rouble the group revised the discount rate used for dcf method arriving at a posttax real discount rate of 90 
2013 71 which is equal to its nominal weighted average cost of capital of 117 2013 90 translated into real terms
no impairments or impairment reversals were recognised for the year ended 31 december 2014 both for property plant and equipment or 
goodwill see note 20
the carrying amount of the cash generating units excludes certain exploration and developments assets which are currently under development 
these assets are assessed for impairment separately using the same assumptions set out below and where applicable impairment is recognised 
within exploration expenses note 12
year ended 31 december 2013
during the year ended 31 december 2013 due to significant decline in gold silver and copper market prices in first quarter 2013 the group carried 
out an impairment review of its property plant and equipment goodwill and other noncurrent assets as a result of this review total impairment 
charges of us2134 million were recognised during 2013
summary of key assumptions used for impairment assessment
commodity prices
commodity prices are based on latest internal forecasts benchmarked against external sources of information in the impairment tests  
performed the flat real longterm gold silver and copper prices of us1200 per ounce 2013 us1200 us17 per ounce 2013 us18  
and us5400 per tonne 2013 us7000 respectively have been used to estimate future revenues 
discount rate
the group used a posttax real discount rate of 90 2013 71
proved and probable reserves and mineral resources
future annual production volumes are derived from the detailed longterm life of mine plans which are based on jorc proven and probable 
reserves and certain mineral resources using a relevant resourcetoreserve conversion ratio at the end of the period 
production costs
production costs are based on management’s best estimates over the life of the mine and reflect past experience
rouble exchange rates
management have analysed rubus rate movements for the year ended 31 december 2014 for the purposes of the impairment test  
rubus exchange rate is estimated at 50 rubus 2013 33 rubus
19 property plant and equipment
cost
 exploration and
 development 
assets
us’000 
 mining assets 
us’000
 nonmining
assets
us’000 
 capital
construction
inprogress 
us’000 
 total
us’000
balance at 1 january 2013 84925 2261824  98327  353622 2798698 
additions 60355 245287 13216 37959 356817 
transfers 78138 143437 6627 214948 – 
change in decommissioning liabilities – 549 – – 549
business combinations and asset acquisitions note 4 128521 6 – 2952 131479 
eliminated on disposal of subsidiary  –  12535 218 42 12795
disposals and writeoffs – 45325 6455 1828 53608
translation to presentation currency 14713 161806 6964 20154 203637
balance at 31 december 2013 337226 2430339 91279 157561 3016405 
additions 76090 91809 3388 52415 223702 
transfers 10840 83457 3305 75922 – 
change in decommissioning liabilities – 7497 – – 7497
business combinations and asset acquisitions note 4 876187 5332 1915 1528 884962 
disposals and writeoffs 35595 31006 3358 2487 72446
translation to presentation currency 167192 1008109 38062 54303 1267666
balance at 31 december 2014 1075876  1564325 58467 78792 2777460 
      
accumulated depreciation amortisation and impairment
 exploration and
 development
assets
us’000 
 mining assets
us’000
 nonmining
assets
 us’000
 capital
construction
inprogress
us’000 
 total
us’000
balance at 1 january 2013 –  568272 24694 –  592966
charge for the year –  281157 6186 –  287343
disposals and writeoffs –  27115  3804  –  30919 
eliminated on disposal of subsidiary  –  5469  160  –  5629 
impairment recognised in profit and loss note 18 4670 114984 1938 3537 125129
translation to presentation currency 1  44894  2339  7 47227 
balance at 31 december 2013 4669 886935 26515 3544 921663
charge for the period –  319439 8657 –  328096
disposals and writeoffs 543  24196  1362  200  26301 
transfers 384 691 115 1190  – 
translation to presentation currency 3700  447498  13709  2015  466922 
balance at 31 december 2014 810 735371 20216 139 756536
net book value     
1 january 2013 84925  1693552  73633  353622  2205732 
31 december 2013 332557  1543404  64764  154017  2094742 
balance at 31 december 2014 1075066  828954  38251  78653  2020924 
strategic report governance financial statements appendices
126 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 127 notes to the consolidated financial statements
continued
19 property plant and equipment continued
mining assets and exploration and development assets at 31 december 2014 included mineral rights with net book value which amounted  
to us1033 million including mineral rights of us8536 million acquired in the kyzyl transaction 31 december 2013 us3763 million and 
capitalised stripping costs with net book value of us549 million 31 december 2013 us1148 million 
mineral rights of the group comprise assets acquired upon acquisition of subsidiaries and asset acquisitions
no property plant and equipment were pledged as collateral at 31 december 2014 or at 31 december 2013
20 goodwill
cost and accumulated impairment losses
31 december 
2014
us’000
31 december
2013
us’000
at 1 january 30889 115106
impairment losses recognised note 18 –  75976
translation effect 12919 8241
at 31 december 17970 30889
goodwill has been allocated for impairment testing purposes to the following cashgenerating units
 
31 december 
2014
us’000
31 december 
2013
us’000
mayskoye 12806 22013
dukat 5164 8876
total 17970 30889
sensitivity analysis
for dukat and mayskoye management has performed an analysis as to whether a reasonably possible adverse change to any of the key 
assumptions would lead to impairment 
the following scenarios were considered as reasonably possible and were used for this sensitivity analysis
•	 5 simultaneous decrease in gold and silver prices over the life of mine
•	 5 increase in operating expenses over the life of mine and 
•	 05 increase in the discount rate applied
each of the sensitivities above has been determined by assuming that the relevant key assumption moves in isolation and without regard to 
potential mine plan changes and other management decisions which would be taken to respond to adverse changes in existing management 
projections an adverse change in a key assumption described above would not cause the aggregate carrying amount to exceed the aggregate 
recoverable amount of the dukat and mayskoye cashgenerating units
21 investments in associates 
31 december 2014 31 december 2013
associates
voting power 

carrying value
 us’000
voting power 

carrying value
 us’000
jsc uralpolymetal na – 499 – 
polygon gold 4265 2107 4265 15651 
total  2107   15651 
equity investment in polygon gold inc
polygon gold inc is a private shell company which holds 100 interest in veduga gold deposit in the krasnoyarsk region of the russian 
federation the group owns 4265 of polygon gold and holds significant influence in the entity
the following tables summarise the aggregate financial position and the group’s share of net losses of the investments in polygon gold inc
 
31 december 
2014
us’000
31 december 
2013
us’000
noncurrent assets 73025  78908 
current assets 10652  6807 
noncurrent liabilities 77468 30352
current liabilities 1269 16508
equity 4940 38855
 
31 december
2014
us’000
31 december
2013
us’000
revenue 20284  14617 
net lossincome 16739 5492
group’s share in associate net loss 7139 2340
equity investment in jsc uralpolymetal
as a result of an impairment review performed at 31 december 2013 investment in jsc uralpolymetal was fully written off 
on 29 august 2014 under the terms of the restructuring agreement uralpolymetal was dissolved and the asset and liabilities of the former 
associate were distributed amongst the joint venture partners polymetal received a 100 interest in the north kaluga property refer to note 4
22 noncurrent loans and accounts receivable
 interest rate
31 december
 2014
us’000
31 december
 2013
us’000
loans extended to third parties 800 6807  7334 
longterm accounts receivable nil  2865  11255 
loans to employees and other longterm assets 600 2600  3247 
loans extended to equity method investments 356 618  1017 
total   12890  22853 
strategic report governance financial statements appendices
128 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 129 notes to the consolidated financial statements
continued
23 inventories
 
31 december
 2014 
us’000
31 december
 2013 
us’000
inventories expected to be recovered after 12 months 
consumables and spare parts 34706 41885 
ore stockpiles 79521  11257 
total noncurrent inventories 114227  53142 
inventories expected to be recovered in the next 12 months
ore stockpiles 127245 182269 
copper gold and silver concentrate 100699  133037 
work inprocess 50762  77848 
metal for refinery 10357  9117 
doré 11738  24881 
total metal inventories 300801 427152 
consumables and spare parts 167930  299992 
total 468731  727144 
increase in noncurrent ore stockpiles pertains mainly to impairment reversals described below and certain reclassification in accordance  
with mine plans
writedowns of metal inventories to net realisable value
the group recognised the following reversalswritedowns to net realisable value of its metal inventories
 year ended 31 december 2014
year ended 
31 december 
2013
 
 
voro
us’000
khakanja
us’000
dukat
us’000
omolon
us’000
varvara
us’000
mayskoye
us’000
total operating 
segments
us’000
total operating
segments
us’000
ore stock piles 265 3982 130 30961 5845 106 28857 137203 
ore in heap leach piles – – – 3326  – –  3326 – 
work inprocess 260 – – –  – – 260  – 
metal for refinery – 1000 418 – – – 1418 – 
copper gold and  
silver concentrate – – – – – 5313 5313 16124 
total 5 4982  548  34287  5845 5207  39174  153327
the writedowns were recognised in respect of the ore stockpiles with a low content of precious metal reversals of the previously recorded 
writedowns were driven by a costs reduction due to the russian rouble devaluation changes in mine plans and favourable changes in contract 
terms with offtakers which have the economic viability of the stockpiles
the key assumptions used as at 31 december 2014 in determining net realisable value of inventories including the commodity price assumptions 
were consistent with the assumptions used in the impairment review see note 18 except for rubus exchange rate for the metal inventories 
that are expected to be realised during first half 2015 analysis of such metal inventories was performed using the rate assumption of 60 rubus
during the year ended 31 december 2013 the group provided for obsolete consumables and spare parts inventory in the amount of us41 million 
year ended 31 december 2013 writedown of us107 million
the amount of inventories held at net realisable value at 31 december 2014 is us324 million 31 december 2013 us1007 million
24 trade and other receivables
 
31 december 
2014 
us’000
31 december 
2013 
us’000
receivables from provisional copper gold and silver concentrate sales 36613  14902 
other trade receivables –  2268 
nontrade receivables 18478  21889 
prepaid expenses 1311  3827 
accounts receivable from related parties 465  164 
shortterm loans provided to employees 802  3941 
shortterm loans provided to equity method investments –  190 
total trade and other receivables 57669  47181 
less allowance for doubtful debts 1659 2655
total 56010  44526 
the average credit period on sales of copper gold and silver concentrate at 31 december 2014 was 24 days 2013 25 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 2014 31 december 2013 usnil
25 cash and cash equivalents
 
31 december 
2014
us’000
31 december
 2013
us’000
bank deposits – rub –  11293 
 – foreign currencies 133767  32821 
current bank accounts – rub 12137  8919 
 – foreign currencies 11299  12364 
other cash and cash equivalents 21  170 
total 157224  65567 
bank deposits as at 31 december 2014 bear an interest rate of 27532 per annum for us dollar denominated deposits 2013 02108  
per annum for us dollar deposits and 6757 15 for rub denominated deposits with an average maturity at inception of 50 days 2013 15 days 
26 borrowings
borrowings at amortised cost
actual interest rate at 31 december 31 december 2014 31 december 2013
type of rate 2014 2013
current
us’000
noncurrent
us’000
total
us’000
current
us’000
noncurrent
us’000 total
secured loans  
from third parties
us dollar denominated floating 284 322 166026 371474 537500 37500 537500 575000
total 166026 371474 537500 37500 537500 575000
unsecured loans  
from third parties
us dollar denominated floating 303 274 23692 429615 453307 30769 469231 500000
us dollar denominated fixed 660 750 319093 12735 331828 – 11443 11443
euro denominated floating 224 – – – 3757 3757 7514
total 342785 442350 785135 34526 484431 518957
loans from third parties
euro denominated floating 490 – – – 8903 7624 16527
cad denominated floating 569 – – – 402 258 660
total – – – 9305 7882 17187
508811 813824 1322635 81331 1029813 1111144
strategic report governance financial statements appendices
130 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 131 notes to the consolidated financial statements
continued
26 borrowings continued
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 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 2014 the group drew down a total of us454 million and repaid us252 million a net drawdown  
of us202 million 
the group secured new facilities in the year for a total amount of us1867 million with unrelated parties these credit facilities are undrawn  
as at 31 december 2014 and have maturity dates between 2017 and 2020
at 31 december 2014 the group had undrawn borrowing facilities of us1038 million 31 december 2013 us1324 million the group 
complied with its debt covenants throughout 2014 and 2013 the table below summarises maturities of borrowings
year ended
31 december 
2014 
us’000
31 december
 2013
us’000
31 december 2014 –  81331 
31 december 2015 508811  253904 
31 december 2016 306278  306773 
31 december 2017 94812  57692 
31 december 2018 404245  403814 
31 december 2019 5660  5086 
31 december 2020 2829  2544 
total 1322635  1111144 
27 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
 2014 
us’000
31 december
 2013 
us’000
opening balance 65364  66693 
changes in estimates for the year  
decommissioning liabilities recognised in income statement note 12 723 1064
decommissioning liabilities recognised as decrease in ppe note 19 7497 549
rehabilitation liabilities 3413  1814 
effect of unwinding of discount 4282  3693 
acquired in business combinations note 4 16346  – 
amounts paid in the year 1202 901
translation to presentation currency 25691 4322
closing balance 54292  65364 
rehabilitation expenses relate to the increase of the environmental obligation which arises on the production phase of mining activities during the 
year ended 31 december 2014 rehabilitation expenses amounting to us07 million 2013 us03 million were removed from cost of production 
and capitalised through the application of ifric 20
the principal assumptions used for the estimation of environmental obligations were as follows
 2014 2013
discount rates 8121456 578843
inflation rates 410118 412577
expected mine closure dates 116 years 219 years
the group does not hold any assets that are legally restricted for purposes of settling environmental obligations
28 trade payables and accrued liabilities
 
31 december
2014
us’000
31 december
2013
us’000
trade payables 38694  56667 
dividends payable note 17 84164 – 
accrued liabilities 26555  41279 
labour liabilities 8281  13033 
other payables 3041  6418 
total  160735  117397 
in 2014 the average credit period for payables was 22 days 2013 34 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 
payment schedules to ensure that all amounts payable are settled within the credit period
29 commitments and contingencies
commitments
capital commitments
the group’s budgeted capital expenditure commitments as at 31 december 2014 amounted to us136 million 2013 us223 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 which are accounted for as executed as the group expects to and has historically physically delivered into 
these contracts
operating leases group as a lessee
during the year ended 31 december 2014 the group recognised us125 million as operating lease expenses 2013 us135 million
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 to 2058
future minimum lease payments due under noncancellable operating lease agreements at the end of the period were as follows
 
31 december 
2014
us’000
31 december 
2013
us’000
due within one year 1760  2831 
from one to five years 2395  3904 
thereafter 1125  2334 
total 5280  9069 
contingencies
operating environment
emerging markets such as russia are subject to different risks than more developed markets including economic political and social and legal 
and legislative risks laws and regulations affecting businesses in russia continue to change rapidly and tax and regulatory frameworks are 
subject to varying interpretations the future economic direction of russia is heavily influenced by the fiscal and monetary policies adopted by the 
government together with developments in the legal regulatory and political environment
because russia produces and exports large volumes of oil and gas its economy is particularly sensitive to the price of oil and gas on the world 
market which decreased significantly during 2014 management is unable to reliably estimate the effects of any further price fluctuations on the 
company’s financial position
starting from march 2014 sanctions have been imposed in several packages by the us and the eu on certain russian officials businessmen and 
companies international credit agencies downgraded russia’s longterm foreign currency sovereign rating with a negative outlook in december 2014 
the central bank of the russian federation significantly increased its key interest rate which resulted in higher interest rates on domestic borrowings 
the exchange rate of the russian rouble depreciated significantly these developments may result in the reduced access of the – russian businesses 
to international capital and export markets capital flight further weakening of the rouble and other negative economic consequences 
the impact of further political and economic developments in russia on future operations and the financial position of the group is at this stage 
difficult to determine
strategic report governance financial statements appendices
132 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 133 notes to the consolidated financial statements
continued
29 commitments and contingencies continued
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 activities of the companies of the group may be challenged by the relevant 
regional and federal authorities and 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 2014 and 2013 the group 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 us172 million in respect of contingent liabilities 2013 us223 million
commitments and contingencies related to kyzyl
on 4 september 2014 the group acquired 100 of the share capital of altynalmas gold ltd aag the holding company for the kyzyl gold project 
in kazakhstan refer to note 4 aag subsidiaries located in kazakhstan have certain social and other obligations which were recognised as 
liabilities in the purchase price allocation if they could be measured reliably
the subsoil use contracts contain minimum work obligations for both bakyrchik and bolshevik projects noncompliance with these programs 
may in certain circumstances lead to the revocation of the subsoil use contracts
30 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 2014 and 31 december 2013 the group held the following financial instruments
 
31 december 2014 
us’000
 level 1 level 2 level 3 total
receivables from provisional copper gold and silver concentrate sales –  36613  –  36613 
share repurchase obligation – – 275838 275838
contingent consideration liability –  –  19289  19289
  –  36613  295127  258514 
  
 
31 december 2013 
us’000
 level 1 level 2 level 3 total
receivables from provisional copper gold and silver concentrate sales –  14902  –  14902 
contingent consideration liability –  –  16100 16100
  –  14902  16100 1198
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 the 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 2014 was us129 million including a current portion of us18 million 2013 us161 million
during the year ended 31 december 2014 the group completed acquisition of altynalmas gold ltd the holding company for the kyzyl gold project 
in kazakhstan note 4 the fair value of the related contingent consideration liability was estimated using a monte carlo model the liability was 
revalued at 31 december 2014 using the same model with updated inputs as of the reporting date
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 2014
 31 december 2014 
31 december 
2013
 
omolon 
us’000
kyzyl
us’000
 total
us’000 us’000
opening balance 16100  –  16100  25276 
additions note 4 –  27699  27699  – 
change in fair value included in profit or loss 1445 21343 22788 8131
translation effect –  –  –  283
settlement 1722 –  1722 1328
total 12933  6356  19289  16100 
less current portion of contingent consideration liability 1783 – 1783 577
total 11150 6356 17506 15523
the directors consider that a reasonably possible change in a valuation assumption would not have a material impact on the financial statements 
for omolon contingent consideration payable for kyzyl contingent consideration the key assumptions are set out within note 4 the model used 
to assess the fair value of the consideration at 31 december 2014 is sensitive to changes in several key assumptions
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
 
31 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 26 offset by cash and bank balances as detailed in note 25 
and equity of the group comprising the stated capital account reserves and retained earnings as detailed in note 32
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
strategic report governance financial statements appendices
134 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 135 notes to the consolidated financial statements
continued
31 risk management activities continued
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
 2014
us’000
31 december
 2013
us’000
financial assets  
financial assets at fvtpl  
receivables from provisional copper gold and silver concentrate sales 36613  14902 
loans and receivables including cash and cash equivalents  
cash and cash equivalents 157224  65567 
trade and other receivables 18085  25797 
noncurrent loans and receivables 12890  22853 
total financial assets 224812  129119 
financial liabilities   
financial liabilities at fvtpl  
contingent consideration liability 19289  16100 
financial liabilities at amortised cost  
borrowings 1322635  1111144 
share repurchase obligation 275838  – 
dividends payable 84164  – 
trade and other payables 41735  63085 
total financial liabilities 1743661  1190329 
trade and other payables exclude employee benefits and social security
the carrying values of cash and cash equivalents 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 2014 is us1232 million and the carrying 
value as at 31 december 2014 is us1323 million see note 26 carrying values of the other longterm loans provided to related parties as at 
31 december 2014 and 31 december 2013 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
 2014
us’000
31 december
 2013
us’000
receivable from provisional copper gold and silver concentrate sales accounts receivable 36613  14902 
    
year ended
 
location of gainloss recorded  
in profit or loss
 31 december
 2014
us’000
31 december
 2013
us’000
receivable from provisional copper gold and silver concentrate sales revenue 2088 9481
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 2014 and 31 december 2013 were as follows
 assets liabilities
 
31 december
 2014
us’000
31 december
 2013
us’000 
31 december
2014
us’000
31 december
2013
us’000
us dollar 181012  60524   1714775  1099804 
euro 9  119   2286  25883 
gbp 240  99   2456  720 
total 181261 60742 1719517 1126407
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 in 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
 2014
us’000
31 december
 2013
us’000
profit or loss rub to us dollar 224458 106524
profit or loss rub to euro 404 3637
profit or loss rub to gbp 509 107
profit or loss kzt to us dollar 577  1786
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
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 is 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 2014 would have decreasedincreased by us116 million 2013 us98 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 2014 and 31 december 2013 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 25 are cash and cash 
equivalents at 31 december 2014 of us1572 million 2013 us656 million
strategic report governance financial statements appendices
136 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 137 notes to the consolidated financial statements
continued
31 risk management activities continued
liquidity risk
liquidity risk is the risk that the group will not be able to settle its liabilities as they fall 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 2014
     
31 december
2014
us’000
31 december 
2013
us’000
 
less than
3 months 312 months 15 years
more than
5 years total total
borrowings 43935 500170 860027 2910 1407042 1219381 
share repurchase obligation note 4 – 300000 – – 300000 – 
dividend payable note 17 84164  –  –  –  84164  – 
accounts payable and accrued expenses 35265  6470  –  –  41735  63085 
contingent consideration note 30 –  1783 19252 2546  23581  20301 
total 163364 808423 879279 5456 1856522  1302767
32 stated capital account and retained earnings
as at 31 december 2014 the company’s issued share capital consisted of 420819943 ordinary shares 2013 389472865 ordinary shares of no 
par value each carrying one vote the company does not hold any shares in treasury 2013 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
stated capital
 account
us’000
balance at 1 january 2013 383206204  1576123 
issue of shares for olcha note 4 775000  13423 
issue of shares to acquire maminskoye note 4 5491661  74624 
balance at 31 december 2013 389472865  1664170 
issue of shares to acquire kyzyl note 4 31347078  274914 
balance at 31 december 2014 420819943  1939084 
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 lossearnings per share
both basic and diluted lossearnings per share were calculated by dividing lossprofit 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 
2014
31 december
 2013
weighted average number of outstanding common shares 399606989 387932387
dilutive effect of share appreciation plan 83149 –
weighted average number of outstanding common shares after dilution 399690138 387932387
   
the outstanding ltip awards at 31 december 2014 and 2013 represent antidilutive potential ordinary shares with respect to earnings per share for 
continuing operations therefore basic and diluted earnings per share are the same for the current and prior year
33 sharebased payments
for the year ended 31 december 2014 sharebased compensation in the amount of us24 million including us03 million of management 
bonus deferral award 2013 us242 million was recognised in general administrative and selling expenses in the consolidated income statement 
note 11 
as at 31 december 2014 the group has us7 million of unrecognised sharebased compensation expense related to nonvested equitysettled 
stock appreciated rights with an expected amortisation period of 32 years
the previous ltip scheme which was granted in 2010 had fully vested by 30 june 2013 these options lapsed in h1 2014 and accordingly the 
related balance of us1435 million in the sharebased payment reserve was transferred into retained earnings
34 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 
bank otkritie previously nomosbank ceased to meet the definition of a related party from 27 february 2013 due to changes in its shareholder 
structure and composition of its board of directors however in line with ias 24 related party transactions deposits or borrowings taken out with 
nomos where terms were agreed prior to this date continued to be recognised as related party transactions borrowings taken out with nomos 
bank were fully repaid during first quarter 2014
 year ended
 
31 december
 2014
us’000
31 december 
2013
us’000
income from transactions with related parties  
revenue from sales to bank otkritie until 27 february 2013 –  81641 
interest income on deposits placed with bank otkritie –  34 
other income from equity method investments 3050  1740 
expenses from transactions with related parties  
interest expense on loans provided by bank otkritie 174  996 
purchases from equity method investments –  13983 
outstanding balances owed to or from related parties at 31 december 2014 are presented below
 
31 december 
2014
us’000
31 december
 2013
us’000
shortterm loans provided to equity method investments –  190 
longterm loans provided to equity method investments 618  1017 
total loans provided to related parties 618  1207 
shortterm loans provided by bank otkritie prior to 27 february 2013 –  9305 
longterm loans provided by bank otkritie prior to 27 february 2013  –  7882 
total loans provided by related parties –  17187 
accounts receivable from related parties 465  164 
interest receivable from related parties –  242 
carrying values of other longterm loans provided to related parties as at 31 december 2014 and 31 december 2013 approximate their fair values 
details of the significant terms of the loans provided by related parties are disclosed in note 26 
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 
strategic report governance financial statements appendices
138 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 139 notes to the consolidated financial statements
continued
34 related parties continued
the remuneration of directors and other members of key management personnel during the periods was as follows
 year ended
31 december
 2014
us’000
 31 december 
2013
us’000
sharebased payments 472 12359
shortterm benefits of board members 2124 1866
shortterm employee benefits 2444 2565
postemployment benefits 280 399
35 notes to the consolidated statement of cash flows
 year ended
notes
31 december 
2014
us’000
31 december
2013
us’000
profit before tax 137875 157620
adjustments for 
depreciation and depletion recognised in statement of comprehensive income 260481  237533 
mining taxes vat penalties and accrued interest 12 19509  662 
writedown of exploration assets and construction in progress 38082  – 
writedown of nonmetal inventory to net realisable value 23 4069  10696 
reversalwritedown metal inventory to net realisable value 23 39174 153327 
change in estimate of environmental obligations 723 1064 
impairment of noncurrent assets –  201105 
impairment of investment in associate –  12291 
sharebased compensation 11 33 2387  24233 
finance costs 15 40626  42735 
finance income 3216 2850
loss on disposal of property plant and equipment 12 4473  9503 
change in contingent consideration liability 30 22788 8131
change in allowance for doubtful debts 12 213 1089 
rehabilitation expenses 2101  1524 
loss from equity method investments 21 7139  2340 
foreign exchange lossgain 559266  74240 
lossprofit on disposal of subsidiaries –  8746 
other noncash expenses 3600  2528 
movements in working capital 
increase in inventories before impairment 58228 61893
increasedecrease in vat receivable 5593 11560 
increasedecrease in trade and other receivables 19779 60675 
increasedecrease in prepayments to suppliers 13122 11560 
decreaseincrease in trade and other payables 2838 2246 
decreaseincrease in other taxes payable 525  11406
cash generated from operations 638709  625629 
interest paid 37880 35921
income tax paid 85990 128041
net cash generated by operating activities 514839  461667 
the cash flow statement is initially prepared in the group entities’ functional currencies being the russian rouble and kazakh tenge movements 
in working capital derived in russian rouble and kazakh tenge are translated into us dollars at average rates for the period or historical rates 
where applicable movements in working capital are also adjusted for noncash movements such as depreciation absorbed into metal inventories 
and impairments or impairment reversals
noncash transactions during the year ended 31 december 2014 represent the issuance of shares amounting to us275 million in respect of 
business combination 2013 the issuance of us88 million of shares for the acquisition of assets
cash flows related to exploration amounted to us674 million for the year ended 31 december 2014 2013 us58 million
36 subsequent events
on 3 february 2015 polymetal international plc secured a new facility of us100 million with unicredit bank the loan will be repaid in equal 
quarterly instalments starting from may 2017 to february 2019
a final dividend has been proposed in relation to the year of 13 cents per share 2013 8 cents per share giving a total expected dividend of 
us547 million 2013 us312 million
on 18 march 2015 the group increased its interest in llc ‘vostochny basis’ holder of the licence for the tarutinskoye copper deposit tarutin 
from 25 to 50 the group has purchased an additional 25 from an unrelated party for a consideration of us142 million payable through 
1746692 newly issued polymetal international plc shares 041 of polymetal’s increased ordinary share capital the amount of shares was 
determined by dividing the consideration by the unweighted mean average of polymetal’s closing share price during the 14 calendar day  
period ending two calendar days before completion as result of the issuance of consideration shares polymetal’s share capital comprises 
422566635 shares 
strategic report governance financial statements appendices
140 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 141 dukat
operational statistics
mines
dukat nachalny2 goltsovoye lunnoye arylakh perevalny olcha
total  
hub
status operating developing operating operating operating scoping developing
mineralisation type veinveinlet vein 
disseminated
narrow vein mineralised 
zone
veinveinlet veinveinlet veinveinlet
mine type openpit
underground  
mining method
underground
and openpit
openpit underground underground openpit underground openpit 
followed by 
underground
commencement  
of mining year
2001 na 2011 2000 2006 na na
current lifeofmine  
end year 2024
1
 reserves and resources included in dukat
production  
20142013 statistics
omsukchan concentrator lunnoye processing plant total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
ore processed kt 1711  1574 9 400 338 18 2111  1912 10
metal in ore processed grades gt
– gold 07 07 9 14 11 21 08  08 1
– silver 406 425 5 411 391 5 407  419 3
recoveries
– gold 854 837 2 856 856 0
– silver 865 863 0 918 893 3
production
– gold koz 32 30 4 14 10 36 45  41 12
– silver moz 195 183 7 44 38 16 239  221 8
gold equivalent koz 357  335 6 87  73 19 443  409 9
total cash cost usse oz  87  116 25
adjusted ebitda usm 230  229 0
mining 
20142013 statistics
dukat goltsovoye lunnoye  arylakh total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
stripping kt –  – na –  – na 233  1034 78 233  1034 78
underground development m 31204  30717 2 6742  7102 5 4876  6612 26 42822  44431 4
ore mined kt 1468  1253 17 191  168 14 384  394 3 2043  1815 13
metal in ore mined grades gt
– gold 08  09 16 –  – na 14  11 24 08  09 8
– silver 392  423 7 624  624 0 418  367 14 418  429 2
albazino
mining
20142013 statistics 2014 2013
 
change
stripping kt 16321  16135 1
underground development m 3325 919 262
ore mined kt 1566  1338 17
gold grade in ore mined gt 49 55 12
production
20142013 statistics 2014 2013
 
change
ore processed kt 1609  1513 6
gold grade in ore processed gt 48 56 13
recoveries to concentrate 876 882 1
concentrate produced kt 136 140 3
gold grade in concentrate produced gt 500 531 6
gold in concentrate koz 219 239 8
concentrate sold kt – 49 100
saleable gold in concentrate sold to offtakers koz – 79 100
amursk pox
concentrate processed kt 153 127 20
gold grade in concentrate processed gt 501 498 1
recoveries 938 860 9
gold production at amursk pox koz 227 159 43
total gold equivalent production koz 227 238 4
total cash cost usge oz 625 790 21
adjusted ebitda usm 133 103 29
mine
albazino
status operating
mineralisation type mineralised zones
refractory ore
mine type openpitunderground mining method openpit and underground
commencement of mining year 2009
current lifeofmine end year 2030
strategic report governance financial statements appendices
142 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 143 amursk pox
mayskoye
operational statistics
production
20142013 statistics
albazino mayskoye total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
concentrate processed kt 153 127 20 10 0 nm 163 127 28
gold grade in concentrate processed gt 501 498 1 553 543 2 504 498 1
recoveries 938 860 9 922 – na 937 860 9
total gold equivalent production koz 227 159 43 12 – na 240 159 51
concentrate sourced from mines
albazino mayskoye
status operating operating
mineralisation type mineralised zones 
refractory ore
narrow vein  
refractory ore
mine type openpitunderground mining method openpit and underground underground
commencement of mining year 2009 2011
current lifeofmine end year 2030 2020
mining
20142013 statistics 2014 2013
 
change
underground development m 10536  9989 5
ore mined kt 653 667 2
gold grade in ore mined gt 84 74 14
production
20142013 statistics 2014 2013
 
change
ore processed kt 807 488 66
gold grade in ore processed gt 87 71 22
recoveries to concentrate 836 777 8
concentrate produced kt 93 49 90
gold grade in concentrate produced gt 631 553 14
gold in concentrate koz 188 87 117
concentrate sold kt 72 30 139
saleable gold in concentrate sold to offtakers koz 130 48 169
amursk pox
concentrate processed kt 10 0 nm
gold grade in concentrate processed gt 553 543 2
recoveries 922 – na
gold production at amursk pox koz 12 – na
total gold equivalent production koz 143 48 195
total cash cost usge oz 966 957 1
adjusted ebitda usm 28 4 na
mine
mayskoye
status operating
mineralisation type narrow vein refactory ore
mine type openpitunderground mining method underground
commencement of mining year 2011
current lifeofmine end year 2020
omolon
mines
birkachan sopka oroch tsokol dalneye burgali total hub
status operating operating operating operating development prefeasibility
mineralisation type veinveinlet
stockwork
veinveinlet veinveinlet veinveinlet veinveinlet veinveinlet
mine type openpitunderground  
mining method
openpit
 underground
 from 2015
openpit with 
underground
potential
openpit openpit 
underground 
from 2015
openpit openpit
commencement of mining year 2010 2010 2015 2012 2013 na
current lifeofmine end year 2021
mining
20142013 
statistics
birkachan sopka tsokol dalneye total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
stripping kt 535  1932 72 3670  5912 38 3774  4998 25 2385  3695 35
 
10364  16537 37
underground 
development m 929 – na – – na – – na – – na 929 – na
ore mined kt 698  586 19 922  672 37 317  223 42 550  584 6 2487  2065 20
metal in ore mined 
grades gt
– gold 26 18 43 46 39 18 43 48 11 35 36 3 38  33 13
– silver –  – na 175 142 23 –  – na 74 74 0 81  67 21
production
20142013 statistics 2014 2013
 
change
ore processed kt 825 767 8
metal in ore processed grades gt
– gold 67 51 31
– silver 133 118 13
recoveries
– gold 947 953 1
– silver 835 884 6
production
– gold koz 170 115 48
– silver moz 29 26 14
total gold equivalent including birkachan heap leach koz 226  158 43
total cash cost usge oz  570  879 35
adjusted ebitda usm 142  64 124
strategic report governance financial statements appendices
144 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 145 voro
operational statistics
mining
20142013 statistics 2014 2013
 
change
stripping kt 11030  11099 1
ore mined kt 1893  1787 6
– oxidised 958  981 2
– primary 935  807 16
gold grade in ore mined gt 35  34 2
– oxidised 18  15 17
– primary 52  57 8
production 
20142013 statistics
voro cip voro heap leach total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
ore processed kt 915  924 1 747  850 12 1662  1774 6
metal in ore processed grades gt
– gold 56 57 1 14 14 6 37  36 4
recoveries
– gold 825 799 3 742 737 1
production
– gold koz 130  129 0 28  23 18 158  153 3
– silver moz 01 01 33 003 002 13 01  01 27
gold equivalent koz 131  130 1 28  24 18 159  154 3
total cash cost usge oz  376  503 25
adjusted ebitda usm 141  130 9
mine
voro north kaluga tamunier
status operating scoping scoping
mineralisation type mineralised zones sulphide ore veinlet disseminated
mine type openpitunderground mining method openpit openpitunderground openpit
commencement of mining year 1999 na na
current lifeofmine end year 2027
varvara
mine
varvara
status operating
mineralisation type mineralised zones
mine type openpitunderground mining method openpit
commencement of mining year 1999
current lifeofmine end year 2030
mining
20142013 statistics 2014 2013
 
change
stripping kt 30552  31053 2
ore mined kt 3985  2008 98
– float ore 750  499 50
– leach ore 3235  1510 114
metal in ore mined grades
– gold gt float ore 14 13 6
– gold gt leach ore 12 12 3
– copper  float ore 04 06 30
production 
20142013 statistics
varvara – flotation varvara – leaching total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
ore processed kt 547  1005 46 3117  2671 17 3664  3676 0
metal in ore processed grades
– gold gt 11  13 10 11  13 10 11  13 10
– copper  04 06 31 –  – na 006 016 62
recoveries
– gold 473 562 16 777 817 5
– copper 807 885 9 – – na
production
– gold koz 8  21 63 90  86 5 98  107 8
– copper t 1631  4841 66 – – na 1631  4841 66
gold equivalent koz 16  45 65 90  86 5 106  131 19
total cash cost usge oz  705  791 11
adjusted ebitda usm 45  74 40
strategic report governance financial statements appendices
146 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 147 operational statistics
khakanja
mines
khakanja avlayakan kirankan ozerny svetloye total hub
status operating operating scoping operating construction
mineralisation type veinveinlet vein vein vein zone mineralised 
zone
mine type openpitunderground  
mining method
openpit  
to be
 followed by
underground
underground na openpit openpit
commencement of mining year 2002 2010 na 2012 2015
current lifeofmine end year 2018
mining
20142013 statistics
khakanja  yurievskoye ozerny avlayakan total
2014 2013
 
change 2014 2013
 
change 2014 2013
 
change 2014 2013
 
change
stripping kt 4671  3096 51 4288  4714 9 –  1287 100 8959  9097 2
underground development m –  – na –  – na 3805  919 314 3805  919 314
ore mined kt 271  294 8 764  319 139 42  84 50 1077  697 54
metal in ore mined grades gt
– gold 30  15 96 40  36 12 138  87 58 41  33 24
– silver 142  141 1 28  40 29 105  116 9 60  92 35
production
20142013 statistics 2014 2013
 
change
ore processed kt 622 619 1
metal in ore processed grades gt
– gold 53 57 7
– silver 117 147 20
recoveries
– gold 939 923 2
– silver 743 842 12
production
– gold koz 98  103 5
– silver moz 17  24 29
gold equivalent koz 127  144 12
total cash cost usge oz  704  756 7
adjusted ebitda usm 60  85 29
reserves and resources
as at 1 january 2015
mineral resources and ore reserves
mineral resources
tonnage grade content
kt ge grade gt gold koz silver koz copper kt ge koz
measured 7160  32  522  4495  18  732
indicated 30016  32  2185  15122  84  3088
measured  indicated 37176  32  2707  19617  102  3821
inferred 71690  47  9882  30687  51  10770
measured  indicated  inferred 108866  42  12589  50304  153  14591
ore reserves
proved 53090  40  5037  119788  5  6904 
probable 103650  44  12741  90873  74  14731
proved  probable 156740  43  17778  210660  80  21635
notes
mineral resources and ore reserves are reported in accordance with the jorc code 2012 mineral resources are additional to ore reserves discrepancies in calculations are due to rounding
ore reserves
1
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
proved
standalone mines
albazino
2
7560 52 –  – 52 1259 – – 1259
mayskoye 3860 88 –  – 88 1091 – – 1091
varvara
3
6280 08 –  039 11 166 –  55 212
dukat hub 7020 – – – 82 284 99011 – 1849
dukat 5020 10 446 – 80 169 71947 – 1293
lunnoye 1230 17 380 – 81 68 15058 – 322
goltsovoye 340 – 685 – 105 – 7491 – 115
arylakh 290 09 472 – 84 8 4430 – 79
olcha
4
140 88 19 – 90 39 85 – 40
omolon hub 7680 – – – 33 624 15414 – 821
birkachan 2470 20 6 – 21 158 448 – 163
sopka kvartsevaya 2800 19 82 – 29 171 7430 – 260
oroch
5
 930 40 172 – 66 119 5154 – 197
dalneye 1170 33 61 – 40 125 2280 – 149
tsokol kubaka 310 51 10 – 52 51 102 – 53
voro hub 12220 – – – 25 966 1299 – 980
voro
7
12220 25 3 – 25 966 1299 – 980
khakanja hub 1730 – – – 38 165 4064 – 209
avlayakan 70 164 117 – 180 38 270 – 41
ozerny 600 44 26 – 47 86 513 – 91
khakanja 1060 12 97 – 23 41 3281 – 76
exploration projects
maminskoye
11
 4810 19 – – 19 295 – – 295
veduga
12
350 17 – – 17 19 – – 19
kutyn
13
 1580 33 – – 33 169 – – 169
total proved 53090 40 5037 119788 55 6904
notes
see page 151
strategic report governance financial statements appendices
148 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 149 ore reserves
1
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
probable
standalone mines
albazino
2
8660 51 –  – 51 1421 –  – 1421
mayskoye 2590 80 –  – 80 662 –  – 662
varvara
3
32800 09 –  042 14 971 –  554 1442
dukat hub 6920 – – – 72 250 85070 – 1602
dukat 4430 08 386 – 69 118 54973 – 977
lunnoye 1540 09 369 – 71 44 18224 – 351
goltsovoye 380 – 571 – 88 – 6965 – 107
arylakh 340 09 433 – 78 9 4771 – 86
olcha
4
230 106 18 – 109 79 137 – 81
omolon hub 1520 – – – 101 459 2663 – 495
birkachan 890 100 38 – 105 284 1074 – 298
oroch
5
190 42 197 – 72 26 1206 – 44
tsokol kubaka 170 148 24 – 151 80 130 – 81
burgali
6
270 78 29 – 81 69 254 – 72
voro hub 320 – – – 164 70 1056 189 171
north kaluga
8
320 67 101 581 164 70 1056 189 171
khakanja hub 7580 – – – 34 808 2084 – 838
svetloye
9
7320 28 3 – 29 664 765 – 677
avlayakan 230 187 162 – 209 137 1185 – 153
ozerny 10 50 3 – 50 1 1 – 1
khakanja 20 82 210 – 105 5 133 – 7
exploration projects
kyzyl project bakyrchik
10
27550 75 – – 75 6660 –  – 6660
maminskoye 9890 19 – – 19 618 –  – 618
veduga 3750 51 – – 51 605 –  – 605
kutyn 2070 33 – – 33 217 –  – 217
total probable 103650 44 12741 90873 743 14731
notes
see page 151
reserves and resources
as at 1 january 2015
ore reserves
1
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
proved  probable
standalone mines
albazino
2
16220 51 –  – 51 2679 –  – 2679
mayskoye 6450 85 –  – 85 1753 –  – 1753
varvara
3
39080 09 –  042 13 1137 –  609 1655
dukat hub 13940 – – – 77 534 184081 – 3451
dukat 9450 09 418  – 75 287 126920  – 2270
lunnoye 2770 12 374  – 76 111 33282  – 672
goltsovoye 720 – 625  – 96 – 14456  – 222
arylakh 630 09 451  – 81 18 9201  – 165
olcha
4
370 99 19  – 102 119 222  – 122
omolon hub 9200 – – – 44 1082 18077 – 1316
birkachan 3360 41 14  – 43 442 1522  – 461
sopka kvartsevaya 2800 19 82  – 29 171 7430  – 260
oroch
5
1120 40 177  – 67 144 6360  – 241
dalneye 1170 33 61  – 40 125 2280  – 149
tsokol kubaka 480 85 15  – 87 131 231  – 134
burgali
6
270 78 29  – 81 69 254  – 72
voro hub 12540 – – – 29 1037 2354 189 1151
voro
7
12220 25 3 – 25 966 1299 – 980
north kaluga
8
320 67 101  581 164 70 1056  189 171
khakanja hub 9310 – – – 35 972 6147 – 1047
svetloye
9
7320 28 3  – 29 664 765  – 677
avlayakan 300 181 151  – 202 175 1456  – 195
ozerny 610 44 26  – 47 87 514  – 93
khakanja 1080 14 99  – 24 47 3413  – 83
exploration projects 
kyzyl project bakyrchik
10
27550 75 –  – 75 6660 –  – 6660
maminskoye
11
 14700 19 –  – 19 913 –  – 913
veduga
12
4100 48 –  – 48 623 –  – 623
kutyn 3650 33 –  – 33 386 –  – 386
total proved  probable 156740 43 17778 210660 798 21635
notes
1
 ore reserves are reported in accordance with the jorc code 2012 discrepancies in calculations are due to rounding
2
 including olganadezhda ekaterina1 and ekaterina2 initial ore reserves estimate prepared by polymetal as at 01012015
3
 cu grade only represents average grade of float feed ore reserves of float feed 14 mt proved and 132 mt probable
4
 initial estimate prepared by polymetal as at 01012015
5
 estimate prepared by polymetal as at 01012014 price au  us1300oz ag  us23oz revised estimate was not performed due to lack of material changes
6
 initial estimate prepared by polymetal as at 01012015
7
 including voro south
8
 initial estimate prepared by polymetal as at 01072014 price au  us1300oz ag  us20oz cu  us7000t revised estimate was not performed due to lack of material changes
9
 initial estimate prepared by snowden as at 01012014 price au  us1300oz ag  us225oz revised estimate was not performed due to lack of material changes
10
 estimate prepared by rpa inc as at 26062014 based on data as at 31072013 price au  us1300oz revised estimate was not performed due to lack of material changes
11
 estimate prepared by polymetal as at 01012014 price au  us1300oz revised estimate was not performed due to lack of material changes
12
 initial estimate prepared by snowden as at 01012014 price au  us1300oz revised estimate prepared by polymetal as at 01012015 only stoping without au price change  
ore reserves are presented in accordance with the company’s ownership equal to 4265
13
 initial estimate prepared by snowden as at 01012015 price au  us1300oz only ore reserves estimate for heap leach  
strategic report governance financial statements appendices
150 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 151 reserves and resources
as at 1 january 2015
mineral resources
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
measured
standalone mines
albazino 30 37 –  – 37 4 –  – 4
mayskoye 660 89 –  – 89 188 –  – 188
varvara
2
4170 08 –  045 20 113 –  182 267
omolon hub 230 – – – 35 16 677 – 26
oroch
5
230 21 92 – 35 16 677 – 26
khakanja hub 350 – – – 95 61 3818 – 106
khakanja 350 54 341 – 95 61 3818 – 106
exploration projects
maminskoye 980 14 – – 14 44 – – 44
kutyn
13
740 41 – – 41 97 – – 97
total measured 7160 32 522 4495 182 732
indicated
standalone mines
albazino 140 51 – – 51 22 –  – 22
mayskoye 1090 87 – – 87 306 –  – 306
varvara
2
18770 10 –  058 19 625 –  629 1160
dukat hub 1096 –  – – 68 – 13229 37 239
perevalny
4
1096 –  375  034  68 – 13229  37 239
omolon hub 230 – – – 46 22 792 – 34
oroch
5
180 24 131 – 44 14 756  – 26
burgali
6
50 50 23 – 53 8 36  – 8
khakanja hub 730 – – – 26 51 733  – 60
svetloye
8
630 17 2 – 17 35 44  – 35
khakanja 100 48 199 – 71 17 689  – 25
exploration projects
kyzyl project bakyrchik
10
3220 80 –  – 80 820 –  – 820
maminskoye
11
1150 15 –  – 15 55 –  – 55
kutyn
13
2070 42 –  – 42 279 –  – 279
tarutin
14
1520 01 8  112 23 4 368  170 114
total indicated 30016 32 2185 15122 836 3088
notes
see page 154
mineral resources
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
measured  indicated
standalone mines
albazino 170 49 –  – 49 27 –  – 27
mayskoye 1750 88 –  – 88 493 –  – 493
varvara
 2
22940 10 –  055 19 738 –  811 1427
dukat hub 1096 – – – 68 – 13229 37 239
perevalny
4
1096 –  375  034 68 –  13229  37 239
omolon hub 460 – – – 40 38 1469  – 60
oroch
5
410 22 109  – 39 30 1433  – 51
burgali
6
50 50 23  – 53 8 36  – 8
khakanja hub 1080 – – – 48 112 4551  – 166
svetloye
8
630 17 2  – 17 35 44  – 35
khakanja 450 53 308  – 89 77 4507  – 131
exploration projects  
kyzyl project bakyrchik
10
3220 80 –  – 80 820 –  – 820
maminskoye
11
2130 14 –  – 14 99 –  – 99
kutyn
13
2810 42 –  – 42 376 –  – 376
tarutin
14
1520 01 8  112 23 4 368  170 114
total measured  indicated 37176 32 2707 19617 1018 3821
inferred
standalone mines
albazino 4770 55 –  – 55 837 –  – 837
mayskoye 10990 101 –  – 101 3569 –  – 3569
varvara
2
11730 11 –  056 21 431 –  421 788
dukat hub 1088 – – – 110 64 20093 04 383
lunnoye 290 21 517  – 108 20 4829  – 101
goltsovoye 440 –  880  – 135 –  12550  – 193
arylakh 150 07 427  – 75 3 2050  – 36
olcha
3
130 94 35  – 99 40 151  – 42
perevalny
4
78 –  206  046 41 –  513  04 10
omolon hub 820 – – – 98 106 10030 – 258
oroch
5
790 39 394  – 99 99 10001 – 250
burgali
6
30 73 30  – 77 7 29 – 7
voro hub 24070 – – – 19 1475 – – 1475
tamunier
7
24070 19 –  – 19 1475 – – 1475
khakanja hub 662 – – – 49 99 351 – 103
svetloye
8
460 30 4  – 30 44 63  – 45
avlayakan 50 164 136  – 183 24 200  – 27
khakanja 10 28 199  – 52 1 49  – 1
kirankan
9
142 65 8  – 67 30 39  – 30
exploration projects 
kyzyl project bakyrchik
10
13830 66 –  – 66 2950 –  – 2950
veduga
12
580 41 –  – 41 77 –  – 77
kutyn
13
2110 40 –  – 40 273 –  – 273
tarutin
14
1040 01 6  081 17 3 213  84 58
total inferred 71690 47 9882 30687 508 10770
notes
see page 154
strategic report governance financial statements appendices
152 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 153 mineral resources
tonnage grade content
kt gold gt silver gt copper  ge gt gold koz silver koz copper kt ge koz
measured  indicated  inferred
standalone mines
albazino 4940 54 –  – 54 863 –  – 863
mayskoye 12740 99 –  – 99 4062 –  – 4062
varvara
2
34670 10 –  055 20 1169 –  1232 2215
dukat hub 2184 – – – 89 64 33322 41 622
lunnoye 290 21 517  – 108 20 4829  – 101
goltsovoye 440 –  880  – 135 –  12550  – 193
arylakh 150 07 427  – 75 3 2050  – 36
olcha
3
130 94 35  – 99 40 151  – 42
perevalny
4
1174 –  364  035 66 –  13742  41 249
omolon hub 1280 – – – 77 143 11499 – 317
oroch
5
1200 33 296  – 78 128 11434  – 302
burgali
6
80 59 25  – 62 15 65  – 16
voro hub 24070 – – – 19 1475 – – 1475
tamunier
7
24070 19 –  – 19 1475 –  – 1475
khakanja hub 1742 – – – 48 211 4902 – 270
svetloye
8
1090 23 3  – 23 79 107  – 80
avlayakan 50 164 136  – 183 24 200  – 27
khakanja 460 52 306  – 89 78 4556  – 132
kirankan
9
142 65 8  – 67 30 39  – 30
exploration projects  
kyzyl project bakyrchik
10
17050 69 –  – 69 3770 –  – 3770
maminskoye
11
2130 14 –  – 14 99 –  – 99
veduga
12
580 41 –  – 41 77 –  – 77
kutyn
13
4920 41 –  – 41 649 –  – 649
tarutin
14
2560 01 7  099 21 7 581  254 171
total measured   
indicated  inferred 108866 42 12589 50304 1526 14591
notes
1
 mineral resources are reported in accordance with the jorc code 2012 mineral resources are additional to ore reserves discrepancies in calculations are due to rounding
2
 cu estimate is listed for fresh ore and powder ore that has high cu grade total mineral resources for fresh ore and powder ore with high cu grade of 156 and 67 mt of ore respectively
3
 initial estimate prepared by polymetal as at 01012015
4
 estimate prepared by srk consulting as at 01072011 price ag  us13oz cu  220clb revised estimate was not performed due to lack of material changes
5
 estimate prepared by polymetal as at 01012014 price au  us1500oz ag  us26oz revised estimate was not performed due to lack of material changes
6
 initial estimate prepared by polymetal as at 01012015
7
 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 revised estimate was not performed due  
to lack of material changes
8
 estimate prepared by snowden as at 01012014 price au  us1300oz ag  us225oz revised estimate was not performed due to lack of material changes
9
 estimate prepared by snowden as at 01072011 cog au  15 gt revised estimate was not performed due to lack of material changes
10
 estimate prepared by rpa as at 31072013 price au  us1400oz revised estimate was not performed due to lack of material changes
11
 estimate prepared by polymetal as at 01012014 price au  us1300oz revised estimate was not performed due to lack of material changes
12
 initial estimate prepared by snowden as at 01012014 cog au  20 gt revised estimate prepared by polymetal as at 01012015 mineral resources are presented in accordance  
with the company’s ownership equal to 4265
13
 initial estimate for open pit prepared by snowden for underground by csa global pty ltd as at 01012015 price au  us1300oz
14
 initial estimate prepared by polymetal as at 01012015 price cu  us5600t mineral resources are presented in accordance with the company’s ownership equal to 25 as at 01012015
reserves and resources
as at 1 january 2015
glossary
abbreviations and units of measurement
agm annual general meeting
cis commonwealth of independent states
fsu former soviet union
ge gold equivalent
imn indigenous minorities of the north
jorc australasian joint ore reserves committee
jsc joint stock company
lbma london bullion market association
ltip longterm incentive programme
na not applicable
ngo nongovernmental organisation
nm not meaningful
npv net present value
pgm platinum group metal
pox pressure oxidation
se silver equivalent
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
oz or oz troy ounce 311035 g
pp percentage points
t tonne 1000 kg
tpd tonnes per day
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 silver is 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
strategic report governance financial statements appendices
154 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 155 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 for continuity  
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 bodyparameters 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
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
precipitate the semifinished product of mineral processing 
by merrillcrowe process normally containing 
very high concentrations of silver andor gold
glossary
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
pt platinum
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
sag mill a semiautogenous grinding mill generally used 
as a primary or first stage grinding solution
stockwork one of the types of mineralisation a complex 
system of structurally controlled or randomly 
oriented 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
continued
strategic report governance financial statements appendices
156 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 157 notes shareholder information
as at 30 march 2015 the company’s issued share capital consisted of 422566635 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 30 march 2015
shareholder beneficial owner
number  
of shares
percentage  
of issued 
share capital 

nature  
of holding
powerboom investments limited mr alexander nesis 83590567 1978 indirect
fodina bv mr petr kellner 78076316 1848 indirect
sumeru gold bv glenville asset management pte ltd 31347078 742 indirect
vitalbond limited mr alexander mamut 27505259 651 indirect
staroak limited jiri smejc 20330448 481 indirect
mbc development limited mr alexander mosionzhik 17000000 402 indirect
ann capital management fund limited mr nikolay mamut mr pyotr mamut miss esfir mamut 15130782 358 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
rbc europe limited
riverbank house
2 swan lane
london ec4r 3bf
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
andreas m sofocleous  co llc
proteas house 
155 makariou iii ave
limassol 3026
cyprus
advisers as to kazakh law  
to the company
grata law firm
104 m ospanov street
almaty 050020
republic of kazakhstan
registered office of the company
44 esplanade
st helier
jersey je4 9wg
channel islands
44 1534 504 000 
registered no 106196
limassol office cyprus
zinas kanther and origenous  
corner street
zinas kanther business center
3035 limassol cyprus
357 25 558080
 
london office uk
1 berkeley street
london w1j 8dj
united kingdom
т44 2070 169 503
 
st petersburg office russia
jsc polymetal the russian  
holding company of the group
prospect narodnogo opolcheniya 2 
stpetersburg 198216  
russian federation
7 812 334 3666 
7 812 677 4325
company secretary
tania tchedaeva
media contacts
instinctif partners
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
strategic report governance financial statements appendices
158 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 159 notes
designed and produced by instinctif partners  
wwwinstinctifcom
160 annual report 2014 polymetal international plc polymetal international plc annual report 2014
polymetal international plc
the esplanade
st helier
jersey je4 9wg
channel islands
registered no 106196
wwwpolymetalinternationalcom


Summary:
 strategic expansion and growth through
focusing on highgrade assets  
a distinctive value driver for polymetal
strategic report financial statements governance appendices
albazino
mayskoye
we are consistently building  
a portfolio of highgrade assets 
despite grade erosion for the  
global gold mining sector as a 
whole this allows us to achieve 
superior investment returns and 
provides resilience to adverse 
market movements
43 gt
average reserve grade
one of the highest in the sector and 
central to our sustainable growth
our average grade in ore 
processed in 2014 is in line 
with reserve grade and  
was 47 gt ge 
hochschild
acacia
polymetal
randgold
gold fields
centerra
agnico eagle 
pan american silver
polyus gold
eldorado gold
barrick gold
goldcorp
anglogold
iamgold
newmont
yamana
newcrest
nordgold
coeur d’alene
kinross
new gold
63
51
43
36
30
28
24
23
22
15
15
14
13
13
12
11
11
10
10
average reserve grade
1
 gt ge
08
07
1
  source company data gold silver copper proved and probable reserves as of 01012015 with further updates for svetloye and kyzyl peers ge at 601 ag ozau oz and 51 cu mtau oz 
conversion ratios polymetal ge at 6481 ag ozau oz in accordance with the jorc code 2012
2
 dukat’s total cash cost per gold equivalent was us621ge oz
reserves 35 ge moz reserves 13 ge moz reserves 27 ge moz reserves 18 ge moz
dukat omolon albazino mayskoye
7 7 gt
average reserve grade 
44 gt
average reserve grade
51 gt
average reserve grade
85 gt
average reserve grade
87 usse oz
2
total cash cost
570 usge oz
total cash cost
625 usge oz
total cash cost
966 usge oz
total cash cost
109 usse oz
allin sustaining cash cost
722 usge oz
allin sustaining cash cost
901 usge oz
allin sustaining cash cost
1134 usge oz
allin sustaining cash cost
reserves 12 ge moz reserves 17 ge moz reserves 10 ge moz reserves 67 ge moz
khakanja voro varvara kyzyl
35 gt
average reserve grade 
29 gt
average reserve grade
13 gt
average reserve grade
7 5 gt
average reserve grade
704 usge oz
total cash cost
376 usge oz
total cash cost
705 usge oz
total cash cost
69 gt
average resource grade
909 usge oz
allin sustaining cash cost
515 usge oz
allin sustaining cash cost
1 049 usge oz
allin sustaining cash cost
strategic report governance financial statements appendices
12 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 13 strategic expansion and growth through
a strong record of consistently 
resilient operating performance
strategic report financial statements governance appendices
00 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 00
for a third consecutive year we  
are beating our original production 
guidance and delivering doubledigit 
output growth this has built into our 
track record of robust and resilient 
operating performance under 
challenging market conditions
 
underpinned by highgrade 
solid operating performance 
and a weaker rouble and 
tenge total cash costs  
in 2014 declined by 15  
to us634 per ge oz
 1 43 moz
gold equivalent production
a 12 increase exceeding  
production guidance
2010 2011 2012 2013 2014
average gold equivalent grade processed gt
38 38
44
46
47
2010 2011 2012 2013 2014
gold equivalent production koz
753
810
1063
1282
1431
2010 2011 2012 2013 2014
ore processed kt
7845
8821
9809
10749
11300
all operating assets at full capacity
in 2014 all of our operating assets including the newest 
albazino mayskoye and flagship amursk pox plant operated 
at design capacity and recovery levels ensuring robust 
production growth and exceeding plans for the year
strategic report governance financial statements appendices
14 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 15 strategy
a proven model delivering  
sustainable value
business model
maintaining exemplary governance
driving operational
excellence
delivering
sustainable
value
commitment
to responsible
development
applying strong capital discipline
focusing on highgrade assets
investing in exploration
leveraging our hubbased system
a clear and consistent 
basis for longterm growth
the consistent implementation of our strategy  
is at the heart of our successful track record
underpinned by a commitment 
to good corporate governance  
our business model is the  
key to our success and  
ultimately enables us to  
deliver sustainable value  
to our stakeholders
maintaining exemplary 
governance
we are committed to upholding good 
governance throughout our operations 
and in our interactions towards and  
on behalf of all our stakeholders 
including communities employees  
and government bodies
applying strong capital 
discipline
capital discipline is the key characteristic 
of our investment and funding policy 
informing the decisionmaking process 
across every aspect of the business  
in order to deliver healthy dividend 
streams for our shareholders
driving operational excellence
we continue to focus on achieving 
improved operational excellence in mining 
and processing technologies which  
in turn has enabled us to commence  
the development of the third generation  
of highquality assets
investing in exploration
investment in both greenfield and 
nearmine exploration provides us with  
a costeffective increase in our reserve 
base and along with successful 
acquisitions is the key source of  
our longterm growth
leveraging our hubbased system
our centralised hubbased system 
handles ores from different sources 
achieving economies of scale by 
minimising processing and logistics 
costs as well as capital spending per 
ounce this facilitates production at 
otherwise uneconomical medium  
and smallsized nearplant deposits
focusing on highgrade assets
return on investment in the precious 
metals industry is reliant on grades and 
mining conditions we achieve better 
returns and lower risks from our project 
portfolio by setting appropriate thresholds 
on head grades and largely focusing  
on openpit mines
delivering sustainable value
our business model brings together our 
multifaceted capabilities for increasing 
our resource base and improving both 
production efficiency and grades in order 
to increase profitability and free cash flow 
to deliver value to our shareholders
01
ensure robust  
operating and financial 
performance at our 
operating mines 
focus on full capacity utilisation and 
robust cost performance of our operating 
mines by driving continued operating 
improvement extend our lifeofmine  
by investing in nearmine exploration
02
develop third generation  
growth projects 
 
 
with the second generation growth 
assets omolon albazino amursk pox  
and mayskoye completed and fully 
operational we have now commenced 
the development of the third generation  
of highquality assets the highlight of the 
portfolio is the recently acquired kyzyl 
project which along with the svetloye 
project will be the key source of 
production growth from 2018
05
maintain high standards 
of corporate governance 
and sustainable 
development 
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  
our goal is also to safeguard the health 
and safety of our staff in line with industry 
best practice we are compliant with  
the provisions of the uk corporate 
governance code the group is also  
a participant in the un global compact  
a recognised international standard for 
sustainable development
04
remain opportunistic  
in the ma arena 
combined with own 
exploration efforts 
pursue further ‘bolton’ or other 
synergistic acquisition opportunities with 
a view to leveraging processing capacity 
infrastructure and operational expertise  
at our existing processing facilities
03
maintain capital 
discipline to deliver 
superior free cash  
flow and substantial 
dividends
deliver superior strong free cash  
flow by focusing on return on capital in 
investment decisions and maintaining 
safe leverage levels deliver the value 
created to shareholders through stable 
and substantial dividend payments
see how we
have implemented
this strategy
in 2014 on the 
next pages
strategic report governance financial statements appendices
16 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 17 strategy
we have a disciplined  
and measurable approach 
to ensuring that each 
element of our strategy  
is properly implemented 
this is reflected in the 
clear kpis that we use to 
measure progress against 
our strategy and to which 
the remuneration of the 
top management is linked
delivering reliable growth 
in stakeholder value
01
ensure robust operating and 
financial performance at our 
operating mines
02
develop third generation 
growth projects 
03
maintain capital discipline to 
deliver superior free cash flow 
and substantial dividends
04
remain opportunistic on  
the ma arena combined  
with own exploration efforts 
05
maintain high standards of 
corporate governance and 
sustainable development 
risks risks risks risks risks
production risk
market risk
logistic and supply chain risk
construction and development risk
logistic and supply chain risk
legal risk
market risk – commodity prices
financial risks – foreign exchange 
interest rate liquidity
tax risk
exploration risk
mergers and acquisitions
political risk
legal risk
environmental risk
health and safety risk
our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014 our kpis and performance in 2014
gold equivalent production
14 moz 12
average ge grade in ore processed
47 gt 3
total cash cost
634 usge oz 15
allin sustaining cash cost
893 usge oz 18
adjusted ebitda
685 usm 15
capex
210 usm 34
acquisitions
kyzyl – 67 moz reserves at 75 gt
project development decisions
svetloye – capex of us80 million  
1000 ktpa heap leach with an 8year  
mine life
underlying return on equity
21 12 pp
free cash flow
306 usm 122
dividend payout ratio
58 39 pp
capex
210 usm 34
transactions made during 2014
kyzyl acquisition
reserve growth
216 moz 63
drilling volumes
2688 km 22
initial reserve estimates
albazino underground svetloye  
kutyn olcha veduga
initial resource estimates
north kaluga tarutin
compliance with uk corporate  
governance code ✓
ltifr
065 10
social investments
49 usm 8
ghg emissionsge koz production
642 t10 kt of ore processed 
5
priorities in 2015 priorities in 2015 priorities in 2015 priorities in 2015 priorities in 2015
•	 produce 135 moz of gold equivalent
•	 realise full benefits of the russian  
rouble devaluation and maintain  
a lower cost profile
•	 complete new feasibility study for kyzyl  
in q4 2015
•	 commence construction and mining  
at svetloye in q4 2015
•	 maintain superior financial performance
•	 maintain comfortable leverage ratios
•	 continue substantial dividend payments
•	 look for other valueaccretive ma 
opportunities in the fsu
•	 estimate resources for pgm assets
•	 further advance resource and reserve 
estimates at our brownfield operations
•	 substantially improve risk management 
and health and safety performance  
at our operations aim for zero fatalities  
at our mines
•	 roll out our environmental and social 
responsibility systems in the new region  
of operation kyzyl
strategic report governance financial statements appendices
18 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 19 sustaining strong performance
performance highlights
15
growth in adjusted ebitda
 306 usm
free cash flow in 2014
up 122 yearonyear
financial highlights operating highlights
strategic report financial statements governance appendices
ore mined
kt
32
2012 2013 2014
12591
10379
13706
ore processed
kt
5
2012 2013 2014
9809
10749
11300
gold equivalent
production
koz
12
2012 2013 2014
1063
1282
1431
revenue
usm
1
2012 2013 2014
1854
1707
1690
total cash cost
usge oz
15
2012 2013 2014
690
745
634
adjusted ebitda
usm
15
2012 2013 2014
932
598
685
average gold equivalent
grade processed
gt
3
2012 2013 2014
44
46
47
reserves growth
ge oz
63
2012 2013 2014
151
133
216
headcount
4
2012 2013 2014
9237 9232
8853
net incomeloss
usm
2012 2013 2014
428
198
210
underlying eps
usshare
53
2012 2013 2014
110
046
071
dividends declared for the period
usshare
2012 2013 2014
009
081
041
lost time injury
frequency rate
ltifr
14
2012 2013 2014
059 059
065
social investments
usm
8
2012 2013 2014
61
53
49
ghg emissions
co
2
 equivalent tonnes
per 10 kt of ore processed
5
2012 2013 2014
696
675
642
net debtadjusted
ebitda

4
2012 2013 2014
111
175
182
allin sustaining
cash cost
usge oz
18
2012 2013 2014
1059
1086
893
free cash flow
usm
122
2012 2013 2014
138 138
306
strategic report governance financial statements appendices
20 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 21 stable and resilient operations 
in a volatile market
market review
in 2015 the gold price is expected to 
continue to be negatively correlated with 
the strength of the us dollar and the 
speed of recovery of the us and global 
economy which may lead to an increase 
in interest rates by the federal reserve  
in the middle of 2015
silver closely followed the price dynamics 
of gold although given the weaker 
investment demand the goldsilver price 
ratio continued to increase from 611  
at the beginning of the year to 751 at  
the end of 2014 the average silver price 
decreased by 198 from us238oz  
in 2013 to us191oz in 2014 the 
closing price was down 199 from 
us199oz at the beginning of the  
year to us166oz at the yearend
demand
the annual total demand according to  
the world gold council was 3924 tonnes 
down 4 yearonyear after 2013’s record 
boost caused by lower prices
of that jewellery demand of 2153 tonnes 
although down 10 yearonyear  
was above the fiveyear average by a 
comfortable 5 margin in the second 
half of the year the indian government 
relaxed measures designed to restrict 
gold imports helping the physical 
demand jewellery is deemed to be the 
largest component of aboveground 
stocks of gold accounting for almost half 
of the 177 2 kt of gold estimated to be 
held by private owners and central banks
central banks bought 477 tonnes of gold 
in 2014 seeking continued diversification 
away from the us dollar these institutions 
continued to bolster their holdings of 
gold russia’s central bank was the 
largest purchaser adding 173 tonnes  
to its already sizable stocks russian 
holdings are now estimated at over 
1200 tonnes which accounts for 12  
of russia’s overall reserves kazakhstan 
bought another 48 tonnes during 2014 
sales of gold by central banks 
were limited
net investment demand was 905 tonnes  
in 2014 up 2 compared to 2013  
the increase was driven by a slowdown 
in outflows etf redemptions slowed 
considerably compared with 2013 
demand for bar and coins among smaller 
investors dropped by 40 after an 
abnormally strong demand in 2013
supply
2014 was another challenging year for 
gold producers many gold companies 
continued to cut costs and postpone  
their development projects to adjust to 
the lower gold price this should help  
to reestablish market confidence in the 
sector in the longer term as the supply 
pipeline thins in the short term however 
the global gold supply remained flat 
yearonyear mine supply rose for the 
sixth consecutive year to a new record  
of 3114 tonnes as mines that have been 
developed and become operational in 
recent years added to the supply stream 
and existing producers used highgrading 
to offset price declines meanwhile scrap 
supply slipped by 11 to 1122 tonnes 
as a result total supply at 4278 tonnes 
was little changed so although 
production is expected to stay at this 
record level in 2015 the potential for 
existing operations to generate greater 
volumes of output is limited the sector 
continues to lack interest in hedging 
beyond project financing or the 
restructuring or rollingover of 
existing positions
russia became the second largest  
gold producer in 2014 after china  
having produced more than 270 tonnes 
a further 23 increase in production is 
predicted by the russian union of gold 
miners australia’s production remained 
largely flat while annual mine production 
has decreased in the us peru and  
south africa
2014 global gold supply tonnes
2014 2013 yearonyear
total supply 4278 4273 0
total mine supply 3157 3011 5
recycled gold 1122 1262 11
source gfms thomson reuters 
price dynamics
both gold and silver prices demonstrated 
significantly more stability throughout 
2014 volatility was relatively low the year 
closed with the price at us1199oz 
little changed from the starting price for 
the year the moderate weakening of the 
gold price was driven by the continued 
strength of us dollar and equity markets 
as well as an expected interest rate 
increase by the us federal reserve in 
2015 throughout the majority of the year 
gold traded in the range of us1200 – 
1300oz with the lowest fixing at 
u1145oz in november and highest  
at us1379oz in march 2014 on an 
annual average basis the gold price 
decreased by 103 from us1410oz  
in 2013 to us1266oz in 2014
after last year’s dramatic 
reversal of a decadelong 
upcycle the performance 
of the gold and silver  
price in 2014 was far  
less remarkable
4278 t
total global gold supply in 2014
1266 usoz
average gold price in 2014
2013 us1410oz
gold demand by category  
in 2014 and 2013 tonnes
2013
2014
2014
 jewellery 2152
 technology 399
 investment 904
 central bank net purchases 477
2013 
 jewellery 2384
 technology 408
 investment 885
 central bank net purchases 409
source gfms thomson reuters world gold council
02
jan
13
1800
gold price usoz
1600
1400
1200
1000
800
600
400
200
0
800
silver price usoz and goldsilver price ratio
700
600
500
400
300
200
100
0
02
feb
13
02
mar
13
02
apr
13
02
may
13
02
jun
13
02
jul
13
02
aug
13
02
sep
13
02
oct
13
02
nov
13
02
dec
13
02
jan
14
02
feb
14
02
mar
14
02
apr
14
02
may
14
02
jun
14
02
jul
14
02
aug
14
02
sep
14
02
oct
14
02
nov
14
02
dec
14
● gold   ● silver   ● goldsilver
precious metal market summary 
strategic report governance financial statements appendices
22 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 23 another year of solid performance
operating review
production highlights
2014 2013  change
operating highlights
stripping kt 77458 84956 9
underground development m 61417 56258 9
ore mined kt 13706 10379 32
– openpit 11046 7975 39
– underground 2660 2404 11
ore processed kt 11300 10749 5
average grade in ore processed 
gold equivalent gt 47 46 3
production 
– gold koz 945 805 17
– silver moz 287 272 5
– copper tonnes 1631 4841 66
– gold equivalent koz
1
1431 1282 12
sales 
– gold koz 943 808 17
– silver moz 293 274 7
– copper kt 1029 6141 83
– gold equivalent koz
2
1372 1285 7
average headcount
3
8853 9232 4
safety
– ltifr 065 057 14
– fifr 018 006 200
1
 based on 160 agau and 51 cuau conversion ratios
2
 based on actual realised prices
3
 average for the period
polymetal continued to consistently beat expectations in 2014 
despite the persisting weakness of commodity prices
our gold equivalent production in 2014 increased by 12 to 
143 moz exceeding its original production guidance of 13 moz 
of gold equivalent by 10 and also the updated production 
guidance of 1365 moz by 5 this achievement was mostly 
driven by the full rampup of mayskoye and strong operational 
delivery at dukat and omolon
annual gold production for the year increased by 17 to 
945 koz annual silver production increased by 5 to 287 moz 
led mostly by dukat’s strong performance the share of gold  
in revenue composition increased to 69 compared with  
63 in 2013 production of copper concentrate at varvara was 
temporarily shut down due to the persisting weakness of the 
concentrate market resulting in a significant decline in copper 
production yearonyear
production dynamics on a quarterly basis are shown in the 
graph below with the full rampup of mayskoye the third  
and fourth quarters were the strongest during the year as 
concentrate was shipped out of the mine for sale or processing 
at the pox plant in the july – november navigation period
gold equivalent production by mine in 2014 
● dukat 31
● omolon 16
● albazinoamursk 16
● voro 11
● mayskoye 10
● khakanja 9
● varvara 7
2014 2013  change
dukat 443 409 9
khakanja 127 144 12
voro 159 154 3
varvara 106 131 19
omolon 226 158 43
albazinoamursk 227 238 4
mayskoye 143 48 195
total production 1431 1282 12
q1
2013
quarterly production data ge koz 
121
107
7
235
190
126
7
323
281
126
6
413
212
94
4
310
191
122
4
316
196
135
4
335
259
128
1
388
299
92
0
391
q2
2013
q3
2013
q4
2013
q1
2014
q2
2014
q3
2014
q4
2014
● gold    ● silver    ● copper
the underlying production trend was emulated very closely by 
sales for the year increased sales of mayskoye concentrate and 
further diversification of the offtaker base for concentrate from 
dukat contributed to the reduction in working capital and 
improved financial performance
analysis of production results
mining
stripping volumes in 2014 decreased yearonyear to 775 mt  
of rock moved 2013 85 mt this encompassed the completion 
of the stripping campaigns at varvara the move to underground 
mining at arylakh dukat hub and avlayakan khakanja hub 
and the completion of openpit mining at sopka with dalneye 
nearing completion underground development increased by  
a further 9 to more than 56 km 2013 55 km with increased 
capacity to match processing volumes at dukat and mayskoye 
underground mines while underground development continued 
at avlayakan khakanja hub and commenced at both 
birkachan omolon hub and arylakh dukat hub
ore mined increased by 32 to 137 mt 2013 104 mt mainly 
as a result of the completion of a major stripping campaign  
at varvara in 2013 increased volumes at albazino to match 
processing capacity and accelerated completion of openpit 
mining at sopka omolon hub underground mining  
increased at dukat and mayskoye in line with the respective 
plant throughputs
processing
ore processed increased by 5 yearonyear to 113 mt 
2013 107 mt the main contributors were dukat hub and 
albazino with increased plant capacity while mayskoye 
achieved a full year of production at the design throughput
in line with increased grades in ore mined average gold 
equivalent grade in ore processed grew by a further 3  
to 47 gt this was driven by increased contributions from 
mayskoye and albazino combined with a stronger grade  
profile at omolon and stable grades at other mature mines  
with the exception of khakanja and varvara
production and sales
we exceeded our original guidance with a record production 
level of 143 moz of gold equivalent key drivers behind this 
performance were dukat omolon and mayskoye at khakanja 
where the mine is approaching the end of its mine life 
production declined due to the decrease in average grade  
at varvara there was a 19 decrease in production due mainly 
to the temporary shutdown of the flotation circuit on the back  
of the continued weakness in the copper concentrate market
while most of the sales are comprised of refined metals we 
continue to sell concentrates from dukat goldsilver varvara 
goldcopper and mayskoye refractory gold to offtakers in 
kazakhstan japan south korea and china the offtake allows 
us to maximise the margins compared with inhouse processing 
of these materials in 2014 we continued to diversify our  
offtaker base in order to achieve an optimal combination of 
transportation costs and treatment chargesrecoveries offtake 
concentrate trading was pioneered by polymetal in the russian 
gold sector and has now clearly become one of our core 
competencies this will be leveraged further in the kyzyl project
exploration
our sustained investment in both greenfield and brownfield 
exploration despite the current weak commodity price levels is 
one of the key components of our business strategy we believe 
strongly that our longterm growth is reliant on our continued 
efforts in this area
our exploration activities are focused on five regions of russia –  
khabarovsk magadan chukotka karelia and ekaterinburg –  
as well as on kazakhstan polymetal currently has 62 licences 
for geological studies and gold silver copper and platinum 
group metals pgm mining covering a total area of 8624 km
2
 
and one coal mining licence of these our current exploration 
portfolio includes 42 licences covering 8130 km
2
 in 2014 
exploration capital expenditure amounted to us72 million  
269 km were drilled 3 km of exploration underground 
development completed and an additional 229 km
3
  
of trenching was carried out
the breakdown of the activities by the stage of the asset is 
presented in the charts on the next page
our key exploration objectives in 2014 included
•	 ongoing brownfield exploration activities aimed at extending 
mine lives at our existing operations khakanja currently the 
shortest mine life dukat omolon varvara and voro
•	 completion of exploration at our greenfield gold assets 
including svetloye kutyn maminskoye and – most  
recently – bakyrchik kyzyl project and getting them ready  
for development
•	 continuation of exploration for pgm deposits in the karelia 
and ekaterinburg regions in order to establish new hardrock  
pgm resources sufficient for a standalone mining operation
strategic report governance financial statements appendices
24 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 25 operating review
continuing to focus on operating 
capacity and investment in exploration
•	 continued exploration activities at albazino including 
underground drift geotechnical studies and infill drilling that 
were aimed at converting the newly discovered resources  
to reserves that would extend the mine life of albazino and
•	 further greenfield exploration for new precious metals 
deposits with a potential resource base which would be 
sufficient in grade and size to justify the construction  
of a standalone mine
key 2014 exploration statistics
exploration works 
2014 2013
1
 change
core drilling km 2688 2204 22
trenching th m
3
2291 1385 65
underground development  
for exploration purposes m 3312 1137 191
1
 restated data
in 2014 our drilling volumes increased by a further 22 
yearonyear to 2688 km the total capital expenditure on 
exploration increased to us72 million in line with the increased 
volumes including capitalintensive underground exploration at 
albazino and drilling at the newly acquired kyzyl project
as a result significant resource to reserve conversions were 
achieved during the year along with maiden reserve and 
resource estimates completed for several greenfield projects 
these included
•	 initial reserve estimate at svetloye khakanja hub of 677 koz 
with an additional 80 koz of resources which was followed  
by board approval of the project development decision
reserves and resources
movement in gold equaivalent ore reserves moz 
13277
reserves at
010114
1
 includes kyzyl north kaluga and veduga
reserves at
311214
acquisitions 
and initial 
reserve 
estimates
1
revaluation 
and resource 
conversion
processing
1688 2591
7455
21635
in 2014 we considerably expanded our reserves to 216 moz  
of gold equivalent this was a result of the kyzyl acquisition 
67 moz coupled with a significant resourcetoreserve 
conversion and initial reserve estimate completed at several  
of our operating mines and advanced exploration projects 
including albazino underground svetloye kutyn and veduga 
mineral resources additional to ore reserves declined by  
12 mainly as a result of the resourcetoreserve conversion 
particularly at albazino svetloye and olcha dukat hub 
additionally with the acquisition of kyzyl we increased 
resources by 38 moz
the moderate gold and silver prices of us1200oz and 
us17oz respectively used in both reserve and resource 
estimates in 2014 2013 us1300oz and us225oz did not 
have a material impact on the final size of either but we felt that 
our more conservative approach was warranted
mainly as a result of the kyzyl acquisition our average ore 
reserve grade increased by 16 to 43 gt ge and is one of  
the highest in the sector see chart on page 13 the average 
mineral resource grade also increased by 11 to 42 gt also 
mainly due to the addition of kyzyl mineral resources at 69 gt
•	 initial reserve estimate at kutyn completed in 2015 –  
386 koz with an additional 649 koz in resources
•	 initial resource estimate at tarutin 685 koz of gold equivalent 
of which polymetal now owns 50 which is now well 
positioned to complement the varvara resource pool
•	 initial resource estimate at north kaluga 171 koz of gold 
equivalent previously part of uralpolymetal joint venture  
and now a 100 subsidiary of the group
•	 conversion of underground resources into reserves at 
albazino 14 moz and olcha dukat hub 120 koz
in 2015 polymetal will continue to expand its exploration 
portfolio into new potential areas the company filed  
19 applications for licences in 2015 including six gold areas  
in the urals nine gold and silver areas – four in the magadan 
region and five in khabarovsk region and four pgm areas – 
one in the urals and three in karelia
our efforts during the year to come will be focused on
•	 stepout drilling at kyzyl including the drilling to establish 
resources for the bolshevik deposit and bakyrchik 
exploration area
•	 continuing brownfield exploration near the omolon and 
khakanja operations
•	 stepout drilling at the flanks of knownore bodies at albazino
•	 infill drilling at svetloye ahead of the expected 
commencement of mining in q4 2015
•	 completing the pgm resource assessment at the semcha 
area and prospecting for new objects with pgm mineralisation 
in the region
outlook for 2015
we are confident about the outcomes for 2015 with all of our 
operating mines now running at full capacity the company  
is on track to produce 135 moz in 2015 and in 2016 there will 
be a slight decrease in production mainly due to a reduction  
at omolon after record levels in 2014 and the ongoing grade 
decline at khakanja as it approaches the end of its mine life
operational plans
our current year’s operational objectives for existing 
mines include
•	 commencing mining at oroch omolon hub
•	 further increasing volumes of underground mining with  
the start of underground mining at birkachan and further 
expansion at arylakh dukat hub avlayakan khakanja  
and mayskoye and
•	 materially improving health and safety performance including 
at underground mines and enhancing risk management 
activities with particular attention given to underground mining 
and blasting works
project development
the key focus of management will increasingly shift towards  
our new projects – kyzyl being the largest our efforts in 2015 
will centre around completion of the full feasibility study for the 
project in q4 2015 and the start of fullscale construction in  
q2 2016 we will proceed with the construction of the svetloye 
mine approved in 2014 with mining expected to start in  
q4 2015 we will also continue geological and metallurgical 
studies at viksha semcha – our pgm project in karelia
● geological studies   ● greenfield exploration   ● development
breakdown of exploration assets by stages
exploration works focused on 29 licenced areas
15
12
2
● brownfield   ● greenfield
drilling volume – 2688 km
2005
683
strategic report governance financial statements appendices
26 annual report 2014 polymetal international plc annual report 2014 polymetal international plc 27