Polyus : ANNUAL REPORT OF PJSC POLYUS FOR 2021

PRELIMINARILY APPROVED BY

THE BOARD OF DIRECTORS

OF PJSC POLYUS

Minutes No. 15-22/SD dated 26.08.2022

APPROVED BY

THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

OF PJSC POLYUS

Minutes No. 02-22/OSA dated 30.09.2022

ANNUAL REPORT OF PJSC POLYUS FOR 2021

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OVERVIEW OF POLYUS GROUP

The core business activities of PJSC Polyus and its controlled entities (collectively referred to as "the Group" or "Polyus") include gold production (including primary processing) and sale. Among the world's largest gold-mining companies, Polyus ranks first in gold reserves and fourth in production output, with the lowest costs vs the top global producers.

The Group includes 5 operating mines, gold placers and has a number of construction, development and exploration projects. The Company's key production assets are located in Siberia and the Far East: in Krasnoyarsk Territory, Irkutsk and Magadan Regions and the Republic of Sakha (Yakutia). The Krasnoyarsk Business Unit, the largest one in Polyus, develops the Olimpiada and Blagodatnoye Mines. The Irkutsk Business Unit operates Verninskoye and the gold placers in the Bodaibo District.

Polyus has a unique asset portfolio and demonstrates the lowest costs among the leading global gold producers due to its operating cost controls and effective resource management. Polyus is committed to sustainability principles, best practices in corporate governance and highest occupational safety and environmental standards.

ADDRESS OF THE CHAIR OF THE BOARD OF DIRECTORS

The Board of Directors has strived to strengthen Polyus's operational leadership in the industry, with a constant focus on ambitious strategic goals. Polyus focuses on continuous improvement in its financial and operational performance, and the year 2021 was not an exception.

Pursuing the strategy of enhancing the operational efficiency of each asset, Polyus strives to continually demonstrate strong financial performance. Sustainability is a major priority for the Company. As a large public company, Polyus has to comply with the climate change strategy.

In the reporting year, we managed to accomplish ambitious strategic tasks. The company value increased as a result of improvements in operational efficiency, which would have not been possible without our highly skilled workforce, support from regional authorities and engagement with stakeholders,

I would like to thank everyone who contributed to the Company's success in improving its governance and fostering its development in 2021, who supported the Company and helped it to move forward.

Vladimir Polin

Chair of the Board of Directors of Polyus PJSC

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KEY OPERATING RESULTS IN 2021

Indicator	Unit of measure	12M 2021
Refined gold output	koz	2,687.6
Flotation concentrate output	t	15,377
Antimony in flotation concentrate	t	2,499
Gold in flotation concentrate	koz	29.8
Payable gold in concentrate	koz	22.8
Total gold output	koz	2,717.4
Total rock moved	km3	136,430
Stripping ratio	m3/t	1.6
Total rock moved	kt	351,690
Stripping ratio	t/t	4.2
Total ore mined	kt	67,321
Total ore processed	kt	47,895
Recovery rate	%	82.7
Total doré and slime gold output	koz	2,736.4

In 2021, the total gold output reached 2,717 koz, which is in line with the production guidance of approximately 2.7 moz. By 2020, however, the doré gold output had fallen by 2% to 2,735 koz. The difference in total gold and doré gold output reflects stocks at refineries to be processed in 2022. The decline was primarily attributable to the operations at Olimpiada and lower average grades in ore processed of 3.00 g/t from 3.40 g/t in 2020. This was partially offset by the output growth at Natalka and Verninskoye.

The total rock moved grew to 351,690 koz (136,430 km³) due to increased levels of stripping almost at all the mining assets. The total ore mined was down by 5% year on year and reached 67,321 kt due to the lower ore mined at Olimpiada, Natalka and Verninskoye.

The total ore processed was at 47,895 koz, i.e. 6% up year on year driven by capacity expansion at Olimpiada, Natalka and Verninskoye.

The flotation concentrate output dropped by 82% to about 15 kt, and the gold in flotation concentrate totaled 29.8 koz. This reflects the situation with the reduction in the antimony ore mined and processed at Olimpiada in 2021 and improvements in the operational efficiency of the BIO plant. We confirm the output of 2.8 moz of gold estimated for 2022.

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KEY FINANCIALS IN 2021

Indicator	12M 2021
Revenue, RUB mln	364,216
Earnings before interest, tax, depreciation and amortization	269,512
(EBITDA), RUB mln
EBITDA margin, %	74
OIBDA margin, %	-
Net profit (loss), RUB mln	122,628
Net cash from operations, RUB mln	220,766
Acquisition costs on capital and intangible assets (capital costs),	47,599
RUB mln
Free cash flow, RUB mln	163,717
Net debt, RUB mln	155,805
Net debt/LTM EBITDA	58
Return on equity (ROE), %	68

POSITION IN THE INDUSTRY AND OUTLOOK

Polyus is seeking to realize the potential of its first-class production assets and new projects, which requires continuous transformation on the path to build an efficient, responsible and innovative business.

The Polyus has a portfolio of premium-quality mining assets that are superior to those of its peers in terms of gold grade, life of mine and scale. We mainly invest in assets with low operational and implementation risks. The results of continuous improvement can be demonstrated by year on year performance gains across our core operations.

Our key investment advantages are underpinned by our proven track record of project delivery, efficient management and the lowest costs. At Polyus, value creation is driven by a combination of efficiency, technology development and the culture of excellence, which allows us to keep total cash costs at extra low levels. Natalka is the most recent example of a successful greenfield project with the operation now being Polyus's second largest production asset.

Polyus has the richest reserves among public gold-mining companies and the Sukhoi Log project brings Polyus to the top of global ratings. With declining gold reserves, Sukhoi Log will ensure production for many years to come and will become a new development stage for Polyus. At Sukhoi Log, we are planning to leverage the experience and technology that have already shown high efficiency and safety at other Polyus mines.

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In parallel with the development of the Sukhoi Log Mine, Polyus is constantly expanding its current operations to secure growth and efficient use of the existing assets.

SUSTAINABILITY

The success of Polyus is underpinned by our ambition to deliver value to all stakeholders - from shareholders and employees to local communities and Russia as a whole.

At Polyus, we put people first, so we offer training and career development opportunities to encourage our employees to grow with the company. We are concerned about their health and safety including protection during the pandemic by implementing preventive measures against the coronavirus infection and giving medical assistance.

Polyus is a responsible corporate citizen with a careful attitude to the environment and, as such, is committed to reducing its environment footprint as much as possible. As part of its biodiversity monitoring and assessment program, Polyus cooperates with local research institutes and state nature reserves in addressing vital issues including the conservation of aquatic fauna. Polyus is actively engaged in industry discussions that set the ESG agenda.

OPERATING EFFICIENCY

Polyus maintains high operating efficiency by continuously improving its business processes and implementing innovative solutions. This allows us to retain our competitiveness and leadership in the industry.

We constantly explore the best available technologies, develop our own solutions and encourage our employees to offer and implement innovations on the ground.

Polyus IT systems are in line with our leading position in the industry and they enable the implementation of innovative solutions and the efficient development of the Company. Our IT infrastructure ensures the operation of the digital pit using remote control of mining equipment to improve safety and unmanned robotics for aerial photography, drilling planning and equipment verification and tracking.

STRATEGY

Our strategy focuses on value creation through organic growth and continuous performance improvement. To that end, we increase the throughput capacity of the existing assets, build and launch capacities at new gold mines. Polyus is committed to delivering industry-leading shareholder returns by improving its operational performance and meeting its social and environmental obligations.

On the whole, the strategy is based on the following elements:

• Maintain the leadership in production costs
• Sustain and expand the mineral resource base
• Implement the sustainability principles across the operations
• Ensure shareholder returns
• Maintain high standards in corporate governance and disclosure

CORPORATE GOVERNANCE

Polyus has a reliable and balanced corporate governance structure which enables the company

to be managed efficiently, transparently and responsibly. Polyus continually improves its approaches and governance principles to make them relevant and compliant with the goals and enable development based on evolving business needs.

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