Polyus : Board of Directors approves programme to purchase shares

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Press Release

24 November 2020

PJSC Polyus

Board of Directors approves programme to purchase shares

PJSC Polyus (LSE, MOEX - PLZL) ("Polyus" or the "Company") announces the decision by the Board of Directors (the "Board") to approve a programme to purchase up to an aggregate of 1,428,571 ordinary shares of the Company, including ordinary shares represented by depositary shares, to be carried out by the Company's wholly-owned subsidiary, Polyus Service Limited Liability Company ("Polyus Service").

All shareholders of the Company, including the controlling shareholder, Polyus Gold International Limited ("PGIL"), may participate in the programme.

Shares purchased are expected to be used for the on-going consolidation of Lenzoloto assets, tranches under the Company's long-term incentive plan, as consideration for potential M&A transactions, and for other corporate purposes. For the time being the Company intends to keep the purchased shares as quasi treasury and not to exercise voting rights attributable to those shares.

Minority shareholders may participate in a tender offer (the "Tender Offer"), which will be launched today by Polyus Service, for up to 317,792 ordinary shares.

PGIL intends to sell to Polyus Service, following the expiration of the Tender Offer period, up to 1,110,779 ordinary shares, which corresponds to its pro rata stake in the Company, at the price that will be determined as a result of the Tender Offer. PGIL will not participate in the price setting process of the Tender Offer.

The Tender Offer will be implemented through a modified "Dutch auction" procedure and will expire on December 24, 2020. The programme will be carried out at a price range of USD 210 to USD 240 for each ordinary share and at a price range of USD 105 to USD 120 for each depositary share (together, the "Price Range").

The maximum number of shares to be purchased amounts to 1.05% of the Company's share capital. Following the completion of the programme, including the Tender Offer, the free- float is expected to stand at 21.84%.

The decision, including the Price Range, was approved by the Board taking into consideration the analysis of an indicative market value range prepared by an international reputable independent appraiser.

The overall transaction amount will approximate US$300 million at the bottom end of the range at USD 105 for each depositary share or USD 210 for each ordinary share.

The overview of the key terms of the purchase programme, including the Tender Offer, is provided below.

Key terms of the Tender Offer

Polyus Service is inviting holders of the issued and outstanding ordinary shares of the Company ("Ordinary Shares"), including Ordinary Shares represented by Regulation S and Rule 144A Global Depositary Shares ("GDSs") and Level I American Depositary Shares ("ADSs" and, together with the GDSs, "DSs", and the Ordinary Shares and DSs, together, the "Securities" and each a "Security", and the holders, individually or together, the "Securityholders" and each a "Securityholder") to tender for cash up to an aggregate of 317,792 Ordinary Shares, including Ordinary Shares represented by DSs (the "Maximum Number of Securities"), at a purchase price not less than US$210 and not greater than US$240 for each Ordinary Share (the "Minimum Ordinary Share Price" and the "Maximum Ordinary Share Price," respectively) (the "Ordinary Share Price Range"), to be paid in Russian rubles based on the U.S. dollar / Russian ruble exchange rate of the Central Bank of Russia (the "CBR") effective on the date of the announcement of the results of tenders pursuant to the Tender Offer, and at a price not less than US$105 and not greater than US$120 for each DS (the "Minimum DS Price" and the "Maximum DS Price," respectively) (the "DS Price Range"), to be paid in U.S. dollars, unless otherwise set forth in the Tender Offer Memorandum dated November 24, 2020 ("Tender Offer Memorandum"), in each case upon the terms and subject to the conditions set forth in the Tender Offer Memorandum (the "Tender Offer") and, in the case of Ordinary Shares, in the related Ordinary Shares Letter of Transmittal (the "Ordinary Shares Letter of Transmittal"), and, in the case of DSs, the DS Corporate Action Notice (the "DS Corporate Action Notice").

The period for submission of tenders pursuant to the Tender Offer commences on November 24, 2020 and will expire at 4:00 p.m., Luxembourg/Brussels time (6:00 p.m., Moscow time, 3:00 p.m., London time, 10:00 a.m., New York time) on December 24, 2020 ("Expiration Time"), unless extended by Polyus Service.

Please note that The Depository Trust Company ("DTC"), Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream" and, together with DTC and Euroclear, the "Clearing Systems"), their respective participants and the brokers or other securities intermediaries through which DSs are held will establish their own cut-off dates and times for the tender of the DSs, which will be earlier than the Expiration Time.

Structure of the Tender Offer

A modified "Dutch auction" allows each Securityholder to select the price, within the Ordinary Share Price Range for Ordinary Shares and within the DS Price Range for DSs, subject to certain increments, at which the Securityholder is willing to sell its Securities, or submit a Strike Price Tender (as defined below).

Upon the terms and subject to the conditions set forth in the Tender Offer Memorandum, the Ordinary Shares Letter of Transmittal and the DS Corporate Action Notice, including the DS Letter of Transmittal, Polyus Service will select the Ordinary Share Strike Price as the single lowest purchase price within the Ordinary Share Price Range and the DS Strike Price as the single lowest purchase price within the DS Price Range that will allow it to purchase the Maximum Number of Securities (in any combination of Ordinary Shares and DSs) at such price or, if fewer Ordinary Shares and DSs are properly tendered, all Ordinary Shares and DSs that are properly tendered and not withdrawn prior to the Expiration Time.

Securityholders can tender their Securities in the following ways:

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1. submit a tender at whatever is determined by Polyus Service to be the Ordinary Share
   Strike Price for Ordinary Shares or the DS Strike Price for DSs (a "Strike Price Tender");
2. submit a tender at a single price within the Ordinary Share Price Range for Ordinary Shares or the DS Price Range for DSs; or
3. submit a tender at different prices, subject to set increments, within the Ordinary Share Price Range for Ordinary Shares or the DS Price Range for DSs.

Any tender other than a Strike Price Tender must be expressed in whole U.S. Dollars per Ordinary Share (payable in Russian rubles based on the U.S. dollar / Russian ruble exchange rate of the CBR effective on the date of the announcement of the results of tenders pursuant to the Tender Offer) or per DS, as applicable.

Tenders may be made within the Ordinary Share Price Range for Ordinary Shares, in increments of US$2.00 only, and within the DS Price Range for DSs, in increments of US$1.00 only.

If a Securityholder wants to participate in the Tender Offer and wishes to maximize the chance of having its Securities accepted for purchase, the Securityholder should submit its Securities for purchase as a Strike Price Tender. Securityholders should take into account that this election may have the effect of lowering the Ordinary Share Strike Price or the DS Strike Price and could result in their Ordinary Shares or DSs being purchased at the Minimum Ordinary Share Price or the Minimum DS Price, respectively.

Purchase from Polyus Gold International Limited ("PGIL")

Polyus Service and PGIL, the controlling shareholder of the Company, have signed an indicative letter of intent (the "PGIL LoI") pursuant to which PGIL undertook not to participate in the Tender Offer through tendering any Securities it owns in the Tender Offer but indicated that it may following the expiration of the Tender Offer period, sell to Polyus Service up to a maximum amount of 1,110,779 Ordinary Shares held by it. Any such sale, if it is implemented, is expected to be on the same terms as the share purchase agreements that will be signed by holders of Ordinary Shares under the terms of the Tender Offer and will be at a purchase price equal to the price per Ordinary Share as will be determined and paid as the Ordinary Share Strike Price in the Tender Offer. Pursuant to the PGIL LoI, any share purchase agreement with PGIL on these terms may only be entered into during the Execution Period (as defined in the Tender Offer Memorandum) and, accordingly, if such share purchase agreement is signed, the purchase of Ordinary Shares from PGIL could occur at any time starting with, and including, the date when the results of tenders pursuant to the Tender Offer, the Ordinary Share Strike Price and the DS Strike Price are announced. The provisions of PGIL LoI, other than PGIL's undertaking not to tender any Ordinary Shares in the Tender Offer, are indicative and non-binding and, accordingly, PGIL may, at any time prior to the Expiration Time, notify Polyus Service that it will not be selling any Ordinary Shares to Polyus Service or that it proposes to sell a smaller number of Ordinary Shares under the share purchase agreement.

Strike Price

Upon the terms and subject to the conditions set forth in the Tender Offer Memorandum, Polyus Service will select the lowest price, not greater than US$240 nor less than US$210

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per Ordinary Share (the "Ordinary Share Strike Price"), and a corresponding single lowest price not greater than US$120 nor less than US$105 per DS (the "DS Strike Price" and, together with the Ordinary Share Strike Price, the "Strike Price" or the "Purchase Price"), that will allow it to purchase the Maximum Number of Securities (in any combination of Ordinary Shares and DSs) or, if fewer Ordinary Shares and DSs are properly tendered, all Ordinary Shares and DSs that are properly tendered and not withdrawn prior to the Expiration Time.

Securityholders who tender their Securities at a price below or at the Ordinary Share Strike Price for Ordinary Shares, or below or at the DS Strike Price for DSs, or as Strike Price Tenders, will receive the Ordinary Share Strike Price or the DS Strike Price, as applicable, for all properly submitted and accepted tenders, subject, where applicable, to pro-ration.

Polyus Service will not purchase any Ordinary Shares and DSs tendered at a price above the Ordinary Share Strike Price and the DS Strike Price, respectively.

Pro-ration

If the aggregate number of all validly tendered Securities (in any combination of Ordinary Shares and DSs) exceeds the Maximum Number of Securities, the number of Ordinary Shares and DSs, which will be accepted and purchased in the Tender Offer, will be determined on a pro rata, or proportional, basis according to the number of Securities tendered (or deemed to have been tendered) by the tendering Securityholders at or below the Ordinary Share Strike Price or the DS Strike Price, as applicable (with downward adjustments where necessary to avoid the purchase of fractional Securities).

Any pro rata allocation pursuant to the Tender Offer will not differentiate between Ordinary Shares or DSs, except that it will be taken into account that one Ordinary Share is represented by two DSs.

In these circumstances, the number of Securities that will be purchased from each Securityholder that has properly tendered and not withdrawn its Securities, prior to the Expiration Time, will be as described in the Tender Offer Memorandum.

Circumstances in which the Tender Offer may not proceed

The Tender Offer is not conditioned on any minimum number of Securities being tendered or on Polyus Finance obtaining additional financing. The Tender Offer is, however, subject to certain other conditions set forth in the Tender Offer Memorandum, such as no material adverse change or certain other events occurring prior to the Expiration Time of the Tender Offer.

Full details of the Tender Offer, including the terms and conditions on which it is made, are set out in the Tender Offer Memorandum.

Timetable

DAY	EVENT
On November 24, 2020	Announcement of the Tender Offer and
	commencement of the Tender Offer period
4:00 P.M., Luxembourg/Brussels time (6:00 P.M.,	Deadline for submission of tenders
Moscow time, 3:00 P.M., London time, 10:00 A.M.,
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