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Polymetal: Investment to gain 9.1% stake in Tomtor

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Polymetal International plc (POLY)
Polymetal: Investment to gain 9.1% stake in Tomtor

19-March-2020 / 10:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

Date 19 March 2020

Polymetal International plc

Investment to gain 9.1% stake in Tomtor

Polymetal is pleased to announce that it has entered into a legally binding
agreement to invest US$20 million in exchange for a 9.1% stake in ThreeArc
Mining Ltd. (ThreeArc). ThreeArc owns 100% of the world-class Tomtor niobium
and rare-earth metals project (Tomtor).


? Polymetal to acquire a 9.1% stake in ThreeArc, 100% owner of the Tomtor
project, through a US$ 20 million cash investment into newly issued share

? The pre-money enterprise value is estimated at US$ 259 million.

? The proceeds will be used to complete the Tomtor Pre-Feasibility Study
and initial JORC-compliant Ore Reserve and Mineral Resource Estimate.

? Pursuant to FCA Listing Rule 11.1.10R this transaction is classified as
a smaller related party transaction as ICT Holding Ltd. (ICT), a
substantial shareholder of Polymetal International plc, is also the
majority owner of ThreeArc , and this announcement is made in accordance
with Listing Rule 11.1.10R (2)(c).

? The completion of the transaction will take place upon the statutory
registration procedure, which is expected to occur before the end of

"Investment in Tomtor provides us with a high-quality exposure to the EV
revolution by establishing strategic beachhead in the Nb and REE markets.
Our capital injection and our engineering expertise will be key in driving
the project forward. We intend to consider any further potential steps of
Polymetal's engagement with the asset after the completion of JORC-compliant
reserve estimate", said Vitaly Nesis, Group CEO of Polymetal.


Tomtor is located in the north-west of Yakutia. It is one of the largest and
highest grade rare earth elements (REE) projects in Russia and considered to
be the highest grade development stage niobium (Nb) project globally. The
deposit was discovered in 1977 with initial statutory reserves approved in
1999. In 2013, ICT established ThreeArc which acquired the Tomtor license
subsequently. In 2018, statutory PFS and updated GKZ reserves were approved
totalling 30.5 Mt of ore at 4.0% Nb2O5[1]+10.6% REO[2] grade containing 1.2
Mt of Nb2O5 and 3.2 Mt of REO.

The project is comprised of the Tomtor open-pittable deposit and the
Krasnokamensk Hydromet Facility (KHF) which will be built near the town of
Krasnokamensk. Krasnokamensk, located in South-Eastern Siberia close to the
border with China, is the location of Russia's largest uranium mine and
associated processing and tailings storage infrastructure.


The project envisions the following advantages which fits well with the
Company's strategy:

? High-grade

? Large

? Long-lived

? Exposure to green technology with significant potential to contribute to
active climate change management

? Leveraging Polymetal's leading technical capabilities in hydrometallurgy
and already established regional presence in Yakutia


Niobium is a soft, rare, transition metal. Nearly 90% of the Nb demand
structure is represented by high-strength low-alloy steel (HSLA) which is
mostly used in construction as a strengthening sustainable component,
automotive industry to strengthen and reduce weight of a car elements and
aerospace and defense sector to offer creep strength in super alloys.

Niobium is a relatively scarce resource and there are only three primary
niobium mines in the world today, two in Brazil and one in Canada, but
growing demand has created a global market value of more than US$ 2
billion[3]. World reserves of Nb are estimated at over 9 Mt. Nb prices are
far less volatile than most REEs' which are mostly produced in China and
have been exposed to supply constraints during the last 10 years while Nb
has been stable.

The global rare earth elements market was valued at US$ 2.2 billion[3] in
2019 with the most of the value coming from NdPr. NdPr are used in
high-strength magnets in motors in electric vehicles, wind turbines and
electronic devices and autocatalysts.

Tomtor is expected to become an alternative source of FeNb and rare earth
elements for the growing markets of high-strength steel, permanent magnets
and electronics, all critical for modern green-tech technology. Domestic
demand for FeNb is expected to demonstrate robust growth, thanks to Russia's
growing steel production, while since domestic REE demand is limited, Tomtor
should become a significant supplier of REEs to the global market.

About Polymetal

Polymetal International Plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its
subsidiaries - "Polymetal", the "Company", or the "Group") is a top-20
global gold producer and a top-5 global silver producer with assets in
Russia and Kazakhstan. The Company combines strong growth with a robust
dividend yield.

About Morgan Stanley

Morgan Stanley & Co. International plc acted as sole sponsor and financial
advisor to Polymetal and to no one else. In connection with such matters,
Morgan Stanley and their respective directors, officers, employees and
agents will not regard any other person as its client, nor will it be
responsible to anyone other than Polymetal for providing the protections
afforded to their clients or for providing advice in connection with the
matters described in this announcement or any matter referred to herein.


Media Investor Relations

FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000

Evgeny +44 20 7887 1475 (UK)
Leonid Fink Monakhov

Viktor Timofey
Pomichal Kulakov

+7 812 334 3666 (Russia)


Joint Corporate Brokers

Morgan +44 20 7425 RBC +44 20 7653 4000
Stanley & 8000 Europe
Co. Limited
l plc



+44 20 7886


Forward-looking statements

This release may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements speak only as
at the date of this release. These forward-looking statements can be
identified by the use of forward-looking terminology, including the words
"targets", "believes", "expects", "aims", "intends", "will", "may",
"anticipates", "would", "could" or "should" or similar expressions or, in
each case their negative or other variations or by discussion of strategies,
plans, objectives, goals, future events or intentions. These forward-looking
statements all include matters that are not historical facts. By their
nature, such forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the company's control that
could cause the actual results, performance or achievements of the company
to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such
forward-looking statements are based on numerous assumptions regarding the
company's present and future business strategies and the environment in
which the company will operate in the future. Forward-looking statements are
not guarantees of future performance. There are many factors that could
cause the company's actual results, performance or achievements to differ
materially from those expressed in such forward-looking statements. The
company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements
are based.

[1] Niobium oxide

[2] Rare earth oxides. Mainly NdPr Oxides: Pr6O11 (Praseodymium oxide) and
Nd2O3 (Neodymium oxide)

[3] As per Roskill

ISIN: JE00B6T5S470
Category Code: MSCM
Sequence No.: 53287
EQS News ID: 1001289

End of Announcement EQS News Service

(END) Dow Jones Newswires

March 19, 2020 03:00 ET ( 07:00 GMT)

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