vtb capital investment forum russia calling: …...2016 production 46% baikal 9% 21% 24% mineral...

VTB Capital Investment Forum

Russia Calling: London Session

June 2017

AIM: HGM

Disclaimer

Certain statements within this presentation constitute forward looking statements. Such forward looking statements involve

risks and other factors which may cause the actual results, achievements or performance of the Group to be materially

different from any future results, achievements or performance expressed or implied by such forward looking statements.

Such risks and other factors include, but are not limited to, general economic and business conditions, changes in

government regulations, currency fluctuations (including the US$/RUR rate), the gold price, the Group’s ability to recover its

reserves or develop new reserves, competition, changes in development plans and other risks.

There can be no assurance that the results and events contemplated by the forward looking statements contained in this

presentation will, in fact, occur. These forward-looking statements are correct or represent honestly held views only as at

the date of delivery of this presentation.

The Company will not undertake any obligation to release publicly any revisions to these forward looking statements to

reflect events, circumstances and unanticipated events occurring after the date of this presentation except as required by

law or by regulatory authority.

***

Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production

taxes, but are exclusive of depreciation, depletion and amortisation, capital and exploration costs. Total cash costs are then

divided by ounces sold to arrive at the total cash costs of sales. This data provides additional information and is a non-

GAAP measure.

In line with guidance issued by the World Gold Council, the formula used to define all-in sustaining cash costs measure

commences with total cash costs per ounce sold and then adds sustaining capital expenditures, corporate general and

administrative costs, mine site exploration and evaluation costs and environmental rehabilitation costs. This data seeks to

represent the total costs of producing gold from current operations, and therefore it does not include capital expenditures

attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, income tax

payments, interest costs or dividend payments.

2

3

Highland Gold Today

Kekura

Klen

Belaya Gora

Mnogovershinnoye

(MNV)

Baley Hub

Novoshirokinskoye

(Novo)

Blagodatnoye

Lyubov

Khabarovsk

Cluster

Chukotka

Cluster

Baikal

Cluster

Operating Mine

PFS Stage

Scoping Study

46%

54%

2016 Production

46%

9%

21%

24%

Mineral Resources

261

koz

15.1

Moz

---

3.4 g/t

Unkurtash Kyrgyzstan

US$

454

US$

652

Total Cash

Costs

All-In Sustaining

Costs

- JORC-compliant measured, indicated & inferred resources of gold and gold equivalent as of 31

December 2016, adjusted for updated MNV resources (released in May 2017)

- TCC and AISC for FY 2016

US$

162.5M

2016

EBITDA Russia

Khabarovsk Baikal

Khabarovsk

Baikal

Kyrgyzstan

Chukotka

Corporate Overview

4

Listed on London AIM

Publicly-listed company since 2002

Shareholders include a broad range of major high-

quality UK, European and N. American institutional

investors

Committed to Best Practice in

Corporate Governance

Led by an experienced Board of Directors and

management team

Seven directors – executive chairman, one

executive director, and five non-executive directors

Committed to Returning Capital to

Shareholders

FY 2016 total dividends - £0.104

FY 2015 total dividends - £0.045

AIM HGM

Shares 325,222,098

Market Cap* US$ 630M

Enterprise Value* US$ 836M

Net Debt** US$ 206M

Net Debt/EBITDA (LTM)** 1.3x

2016 Earnings/Share US$ 0.145

* On 15 June 2017 ** On 1 January 2017

26.6%

10.0%

46.4%

17.0%

Prosperity Capital

Management

Board &

Management

Institutions

& Retail

Primerod Int’l &

Affiliated Parties

Shareholder Structure

56.4%

Free

Float

5

Our Strategy: Unlocking Value

Maximise

the upside potential

of operating assets

Develop

assets at the PFS

stage into production

Focus development on

regions of presence

Maintain commitment to operating

safety and protecting the environment

- JORC-compliant measured, indicated & inferred resources of gold and

gold equivalent as of 31 December 2016, adjusted for updated MNV

resources (released in May 2017)

De-risk and convert

additional resources

into reserves

MNV

0.6 Moz

7.3 g/t

Novo

1.4 Moz

7.6 g/t

Belaya Gora

0.7 Moz

2.3 g/t

Kekura

2.6 Moz

7.5 g/t

Klen

0.6 Moz

5.0 g/t

Taseevskoye

5.1 Moz

5.1 g/t

Unkurtash

3.7 Moz

1.7 g/t

6

Low Cost, High Margin Producer

986 984 980

917 912 856

813 800 776 766

730 694

652

572

33 40

45 45

35 36

48

35

48 43 45

54 53

62

All-In Sustaining Costs and EBITDA Margin

All figures based on FY 2016 financial data published by company AISC (US$/oz) EBITDA Margin (%)

Commitment to Dividends

7

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

2

4

6

8

10

12

2011 2012 2013 2014 2015 2016

GB

X

Dividend per share (pence) Yield (%) Total Payout (US$)

$25.7M $40.3M $26.7M $23.2M $21.9M $41.8M

* Yield based on average share price for the year.

Solid Share Performance, Increased Liquidity

Share Price (pence)

Liquidity

Average Daily Trading Volume

Shares

Value (US$)

HGM

Gold Price

FTSE All Share

MINING

6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

20

40

60

80

100

120

140

160

180

200

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

0

50

100

150

200

250

GB

X

millio

n s

ha

res

$1.5M

$4.6M

Mnogovershinnoye (MNV) – An adjusted

internal Life-of-Mine model for MNV, based

on ongoing near-mine exploration and

reserve recalculations, now provides for

production through at least 2022 (versus

2018 previously).

Novo – Project for expansion to 1.3 mtpa ore

mining and processing capacity underway

and on track for completion in late 2018.

Blagodatnoye - Extensive exploration drilling

carried out to confirm resources.

Baley Hub – De-watering programme initiated

for existing Taseevskoye open-pit with a view

to de-risking the project and allowing for

further reserve confirmation. Exploration work

also carried out on Sredny Golgotay along

with a pilot mining project at the Kaftan site

on the Sredny Golgotay licence.

9

2016 Highlights

Interim dividend of £0.050 per share paid for H1 2016 (2015: £0.020)

Final dividend of £0.054 per share recommended (2015: £0.025)

Total distribution for 2016 of £0.104 per share.

2016 2015

Production of gold and

gold equivalent

261,159

oz

262,485

oz

Total Cash Costs

(per oz)

US$

454

US$

480

All-In Sustaining Costs

(per oz)

US$

652

US$

640

Average realised price

(per oz Au equivalent)

US$

1,136

US$

1,062

EBITDA US$

163 M

US$

133 M

Net debt to EBITDA

ratio 1.26 1.74

Cash inflow from

Operations

US$

136 M

US$

106 M

MNV and Novo improved on Q1 2016

gold and gold equivalent production

by 27.5% and 15.7%, respectively.

At Belaya Gora, continued focus on

processing low-grade ore stockpiles

pending the completion of an ongoing

project review.

Updated MNV JORC reserve

statement completed and published,

with Ore Reserves doubled.

Two licences received for greenfield

sites adjacent to MNV.

Exploration programme at MNV

continues with a view towards further

extension of life of mine.

Work continues on Kekura DFS along

with a drilling programme for reserve

confirmation.

Government approval granted for the

development of a deposit of “federal

significance” (Kekura)

Scoping study for Unkurtash published

and consultants retained to identify

potential partners.

10

2017 YTD Operating Highlights

Q1 2017 Q1 2016

Production of gold and

gold equivalent

65,243

oz

56,889

oz

Average realised price

(per oz Au equivalent)

US$

1,222

US$

1,174

The Company affirms its forecast for total 2017 production of

255,000-265,000 oz of gold and gold equivalent.

Highland Gold marked

its 15th anniversary

on May 23, 2017.

Focus on Exploration

11

2016 Exploration Drilling (74 km) = US$ 8.2 M*

MNV (14.3 km)

USD 1.2 m

Kekura (25.0 km)

USD 3.2 m

Sredny

Golgotay (15.9 km)

USD 1.5 m

Belaya Gora (3.9 km)

USD 0.3 m

Preliminary

PFS DFS PFS

MNV

Au reserves under GKZ increased by ~3.0 tonnes:

‒ Northern OB (+1.3 t**)

‒ Southern OB (+1.0 t**)

‒ Central OB (+0.4 t)

‒ Low grade stockpiles (+0.2 t)

Life of mine extended to 2022

New JORC reserve estimation published in May

Blagodatnoye (15 km)

USD 2.0 m

* Expenses include the cost of related research work ** Company reserve estimate

Northern Southern Tea

MNV Drilling by Ore Body

11.3 km

2.0 km 1.1 km

Location Khabarovsk Cluster

Opened 1991 (HGM 1999)

LoM 2022

Mine Type Open pit & underground

Processing Gravity + cyanide leaching

Processing Capacity 1.4 mtpa

Au Production (2016) 96,188 oz

Avg Head Grade (2016) 2.36 g/t

Total Cash Costs US$ 607/oz

12

Mnogovershinnoye (MNV)

Oldest operating mine in our portfolio

Recently extended life of mine by four years

following a broad review and regulatory approval of

reserves under Russian (GKZ) classification

New JORC audit completed with ~104% increase in

total reserves (from 246 koz to 500 koz)

Key Challenge: To identify additional resources to

feed the MNV mill beyond 2022

MNV Snapshot Khabarovsk Cluster

122.3

91.8 94.6 90.4

96.2 91.5

Production (koz) Recovery (%) Grade (g/t) TCC (US$)

2014 2015 2016

3.04

2.29 2.36

722 691

607

Unlocking Value:

Extending life of mine

Updated JORC-compliant Mineral Resource and Ore Reserve estimates have been completed with total Ore Reserves increased to 500 koz Au compared to previously estimate of 246 koz

Russian-standard (GKZ) reserves re-estimation carried out on 12 ore bodies across the licence area in 2016-2017

Extensive near-mine exploration focused on upgrading existing resources and targeting additional resources

– Over 14,000 m of exploration drilling

– Annual budget of US$ 3-5 M

Exploration focused on four key targets:

– Lower horizons of existing underground mine

– Areas around existing open pit operations

– Near-mine greenfields on adjacent licences

– Historic rock dumps

US$ 1 M budgeted for 2017 exploration work on new adjacent greenfield licences.

– Kulibinskaya (38 sq km)

– Zamanchivaya (4.2 sq km) 13

Mnogovershinnoye (MNV)

Northern

Southern

Flank

MNV

MNV NW Flank

MNV W Flank

Kulibinskaya

Zamanchivaya

38.8

61.7 61.3

75.4

45.9

71.4


2014 2015 201614

Belaya Gora

14 14

Location Khabarovsk Cluster

Opened 2014

LoM 2023

Mine Type Open pit

Processing Gravity


Au Production (2016) 45,909 oz


Total Cash Costs US$ 678

Youngest operating mine, developed from

greenfield

GKZ reserves re-estimated in 2016 at lower

cut-off grade (0.3 g/t) leading to drop in LoM

average head grade and resulting in

impairment charge of US$ 22.8 M

Key Challenges

– Irregular grade distribution

– Upgrading mill to improve recovery

Belaya Gora Snapshot Khabarovsk Cluster

1.58 1.64 1.21

926

465

678

Unlocking Value:

Upgrading mill to improve recovery

+ adding new resources

Successful programme to stabilise mill input rate

in 2016 resulted in lower tailings grade

Currently working with SRK on designs for adding

cyanide leach (CIL) capacity to improve recovery

3,900 metres of drilling in 2016 for reserve

confirmation and improved mine planning

A new JORC-compliant reserve statement is

expected in Q3 together with PFS

Targeted for adding resources to Belaya Gora

Preliminarily-measured С2 category reserves for

open pit mining of about 10 million tonnes of ore

Initial metallurgical testwork supports gold

recovery of over 90% via cyanidation.

15,000 metres of drilling in 2016 to confirm

reserves

– JORC-compliant reserves statement in Q3

together with PFS

15

Belaya Gora & Blagodatnoye

Belaya Gora

Blagodatnoye

MNV

30 km

Blagodatnoye

97.8

84.9

105.9

86.0

117.6

85.9


2014 2015 201616

Novoshirokinskoye (Novo)

16

Location Baikal Cluster

Opened 2009

LoM 2029

Mine Type Underground

Processing Gravity-flotation circuit


Au Production (2016) 117,577 oz gold equivalent


Total Cash Costs US$ 254/oz

Polymetallic mine – gold, silver, lead, and zinc

Produces lead and zinc concentrates

– Outside processing costs of 168 US$/oz

Highest contributor to EBITDA

– 45% of production, 55% of EBITDA

Key Challenge: Increase throughput to offset

expected decline in average grade

Novo Snapshot Baikal Cluster

6.20

5.58 5.62

428

302 254

Unlocking Value:

Expanding capacity

Russian-standard (GKZ) reserves re-

estimation resulted in a 77% increase in ore

volumes and 36% decrease in average

grade, with total gold equivalents rising by

13% to 85.7 tonnes (2.6 Moz)

– New JORC reserve statement expected

in Q2

Larger ore volume at lower grades justified

boosting mill capacity from 700 ktpa to 1.3

mtpa

Underground expansion underway in order

to gain access to new horizons

Engineering and design documentation,

preparations for construction work, and

selection of contractors are all underway

Novo is expected to achieve its new target

production capacity in late 2018

17

Novoshirokinskoye (Novo)

Ore body outlines before reserve re-estimation

Ore body outlines after reserve re-estimation

18

Kekura – Premier Development Project…

Location Chukotka Cluster

Start Date 2020

LoM 2029

Mine Type Open pit & underground

Processing Gravity + Cyanide Leaching


Au Production (est. annual) 209,000 oz

Reserve Grade 10.73 g/t

Kekura Snapshot

Kekura Mineral Resources*

Classification Tonnage

(Mt)

Au Grade

(g/t)

Metal Au

(Moz)

Indicated 7.412 8.64 2.06

Inferred 3.266 4.80 0.51

Total 10.678 7.47 2.57

Kekura Ore Reserves*

Classification Tonnage

[Mt]

Au Grade

[g/t]

Metal Au

[Moz]

Proven - - -

Probable Open Pit 4.296 10.94 1.51

Underground 0.541 9.04 0.16

Total 4.837 10.73 1.67

* Reserves & resources compliant to JORC Code 2012. Resources cut-off grade of 1.0

g/t Au. Reserves cut-off grade of 2.2 g/t Au at the open pit and 4.2 g/t Au for the

underground mine. A gold price of US$1,150 per ounce has been applied.

Licence Area: 1,497 sq km

Located 100 km from Kupol

High grade, open pit and underground mining and favourable metallurgy to make Kekura a low cost operation

– Projected TCC of 495 US$/oz

Fluor Canada developing a definitive feasibility study (DFS)

Construction preparations at advanced stage.

Mayskoye

Kupol Klen

Dvoinoye Kekura

Chukotka

Polymetal Kinross

Valunisty

Pevek

Anadyr

Chukotka Cluster

25,000 m exploration drilling program

completed in 2016

Drilling focused on the eastern flank of the

deposit with the aim of improving resource

quality and adding reserves for underground

mining

As part of DFS preparation, 2017 programme

of 11,000 metres of RC-drilling and 4,750 m of

core drilling for reserve confirmation

An additional 1,600 m of core and 2,750 m of

RC drilling scheduled in order to confirm sterile

ground at the planned locations of rock dumps

and infrastructure facilities

11 prospects have been identified within the

Kekura licence area as warranting further

prospecting work

19

…with Great Upside Potential

1 – Zabytiy

2 – Granat

3 – Ryzhiy

4 – Iris

5 – Bond

6 – Zakol

7 – Gonch

8 – Zapadny 2

9 – Zapadny 1

10 – Iris (detailed)

11 – Alpinist

Kekura Deposit

Western site

Central site

Eastern site

Kekura

63 km² licence, located in an existing mining

area with access to roads, power, and water

supply, and plans for infrastructure upgrades

Audited JORC resources of 3.7 Moz of gold at a

grade of 1.7 g/t

Scoping study published in March 2017 showing

favorable economics

Highland Gold is considering partnership

opportunities to develop this promising resource

20

Unkurtash

Unkurtash

Sarytube

Karatube

Baikonur 0 1000 m

Unkurtash

Kazakhstan

Kyrgyzstan

Kumtor

Bishkek

Bozymchak

Ishtamberdy

Centerra Kazakhmys

Full Gold Mining

China

Unkurtash Licence Area Location Kyrgyzstan

LoM 18 years

Mine Type Open pit

Processing Gravity + Cyanide Leaching

Processing Capacity 4 mtpa

Au Production (est. annual) 133,000 oz

Resource Grade 1.7 g/t

Avg. Operating Costs (est.) US$ 616/oz

Capex Required US$ 322 M

NPV (10%) US$ 200 M

Unkurtash Snapshot

Figures based on March 2017 scoping study

Kyrgyzstan

Largest of Baley Hub projects (Baikal Cluster)

with resources of 5.1 Moz at 5.1 g/t

Refractory ore

Previously mined both open pit and

underground in mid-20th century

Currently de-risking the project by pumping

water out of the Taseevskoye pit and

monitoring inflow from the Baley pit

– Three pumps are up and running, current

daily volume is 21.6k m3

– 3.3M m3 pumped out in H2 2016 and

January 2017

– 5.7 metre decrease in water level

– No water inflow from Baley pit detected at

the present water levels

– De-watering programme to continue

throughout 2017

After de-watering the pit, a drilling programme

will be implemented to confirm reserves

21

Taseevskoye

Baley Open Pit Taseevskoye Open Pit

567

568

569

570

571

572

573

574

AS

L,

m

Water Level Change in Pits

Тасеевский Балейский Baley Taseevskoye

Jul Aug Sep Oct Nov Dec Jan

171 142 160

29 119

140

200

2010 2016 2020

2017 Production Guidance: 255-265 koz

2020 Production Target: 500 koz

– Includes only operating mines and Kekura

– Additional upside potential with Klen, Baley Hub (Taseevskoye,

Sredny Golgotay), and Unkurtash

Delivering Growth

22

Baikal Novo

Chukotka Kekura

Khabarovsk MNV

Belaya Gora

Blagodatnoye

~500

200

261 4.4%

CAGR

~

~

~

Comfortable Balance Sheet

Gross debt decreased by US$ 42M in

2016

Effective interest rate of 4.54% p.a. on

01 Jan 2017

– Down from 5.43% on 01 Jan 2016

Average tenor – 23 months.

303

254

212 247

231 206

0

100

200

300

01.01.2015 01.01.2016 01.01.2017

Gross Debt Net Debt (M US$)

23

Net Debt / EBITDA ratio = 1.3 as of 01 January 2017

16

227

Cash & cash equivalents Undrawn credit facilities

Liquidity Position – 31.03.2017

US$

243M

PFS

MNV

Novo

Belaya Gora

Blagodatnoye

Kekura

24

Milestones for 2017

Updated JORC Reserves

Unkurtash

Scoping Study

Belaya Gora + Blagodatnoye

Klen

Kekura

DFS

25

The Highland Gold Investment Case

Upside Potential in Existing

Operating Assets

Growth Potential in High

Grade Deposits

Development Strategy

Focused on Regional Hubs

Disciplined Capital

Allocation Unlocking the

Value of

Highland Gold’s

Resource Base Commitment to Dividend

15-Year Track Record

as a Public Company

www.highlandgold.com [email protected] +7 495 424-9521

0 Appendices

27

Appendix 1:

2016 Financial Highlights

2016 2015 2014

Gold and GE Production, koz 261.2 262.5 258.9

Revenue, USD m 305.9 276.2 304.2

Operating Profit w/o Impairment, USD m 92.2 58.4 67.3

Impairment Losses, USD m -22.8 -36.0 -11.4

EBITDA, USD m 162.5 133.3 123.6

STRONG BALANCE SHEET

Total Assets, USD m 1120.6 1167.2 1243.8

Total Equity, USD m 755.6 739.6 770.1

Gross Debt, USD m 211.6 253.5 303.4

KEY RATIOS

TCC, USD / oz 454 480 645

AISC, USD / oz 652 640 809

Net Debt / EBITDA 1.3 1.7 2.0

EBITDA margin 53% 48% 41%

DIVIDENDS

Dividends paid during the year, USD m 31.7 20.1 26.8

Dividends declared during the year

interim, GBP per share 0.050 0.020 0.025

final, GBP per share 0.054 0.025 0.020

total, GBP per share 0.104 0.045 0.045

Total Dividends declared during the year, USD m 41.8 21.8 23.2

28

Appendix 2:

2016 Consolidated Income

2016

US$000

2015

US$000

Revenue 305,901 276,175

Cost of sales (183,995) (199,365)

Gross profit 121,906 76,810

Administrative expenses (14,293) (13,127)

Other operating income 1,255 2,882

Other operating expenses (16,675) (8,170)

Impairment losses (22,832) (35,982)

Operating profit 69,361 22,413

Foreign exchange gain /(loss) 1,909 (4,321)

Finance income 145 1,331

Finance costs (5,187) (5,529)

Profit before income tax 66,228 13,894

Total income tax expense (18,319) (23,913)

Total comprehensive income for the period 47,909 (10,019)

Profit/(loss) per share (US$ per share) 0.145 (0.032)

Appendix 3:

2016 EBITDA

29

+ USD 22.9 m – increase in Au price (+8%) and

GE price (+9%)

+ USD 5.2 m – change in the volume of sales by

3%, including:

‒ Novo + 19 722 oz of GE

‒ MNV + 3 877 oz of Au

‒ BG - 4 560 oz of Au

- USD 5.8 m – increase in cost of sales due to BG

- USD 1.5 m – increase in G&A

133 162

9 23 5 7 1

0

50

100

150

200

250

2015 ExchangeRate

MetalPrices

Volumeof Sales

Cost of sales G&A 2016

EBITDA Bridge, US$ m

55

96

26 - 15

45%

76%

45%

MNV NOVO BG G&A

EBITDA, USD m EBITDA margin, %

EBITDA Breakdown by Mine

Appendix 4:

2016 Cash Flow

30

Key Cash Outflows

34% - Debt Service

33% - CAPEX and exploration

20% - Dividends

24 9

141 12 31

9 18

42

12 32

3

Cash & CE01.01.2016

OperatingAssets

Contribution

MaintenanceCAPEX

DevelopmentCAPEX

ExplorationCAPEX

G & A BankLoans

BankInterest

Dividend Other(ForEx)

Cash31.12.2016

HGML Cash Flow, US$ M

27%

6%

34%

20%

13%

Cash Outflow Breakdown

Other

Dividends

Banks

CAPEX

Exploration

Appendix 5:

2016 TCC & AISC

31

Higher costs at BG prevented us from taking full advantage of the weak

rouble and limited the decrease in HGML TCC to 6%.

MNV and NOVO TCC decreased by 12% and 16%, respectively, as

compared with 2015, reflecting the weak rouble and increases in sales of

gold and GE (MNV +4%, NOVO + 19%)

A 46% increase in BG TCC was due to low grades and recovery rates.

HGML AISC increased by 2% to USD 652/oz

‒ The positive effect of lower TCC was offset by an increase in

maintenance CAPEX (+6%) due to BG and growth of G&A (+7%)

480 454

691 607 465

678

302 254

148 168

2015 2016 2015 2016 2015 2016 2015 2016

HGML TCC,

US$/oz.

TCC by Mine, US$/oz.

-6 %

MNV TCC BG TCC Adjusted NOVO TCC

as if producing DORE

Kazzink Processing Costs, USD/oz sold

-12 %

-6 % +46 %

432 450

640 652

2015 2016

+2%

HGML AISC ,

USD/oz.

Appendix 6:

2016 Capital Expenditure

32

57 34

51

2014 2015 2016

Total Capital Expenditure, US$ M (excl. VAT)

+50%

k US$ excl. VAT 2014 2015 2016

KHABAROVSK CLUSTER 26,983 13,596 15,945

MNV 6,305 3,895 10,059

Belaya Gora 20,678 9,701 5,886

BAIKAL CLUSTER 8,492 7,067 16,551

Novo 7,837 5,598 11,077

Taseevskoye + Kaftan 295 1,312 5,373

Lubov 360 157 101

CHUKOTKA CLUSTER 21,449 13,475 18,233

Kekura 12,239 12,137 17,952

Klen + VK area 9,211 1,338 282

OTHER 493 60 436

Highland Exploration 493 60 436

Total Capital Expenditure 57,417 34,198 51,165

* including capitalized expenses of development projects & excluding ore bodies, stripping activity assets and capitalized inventory

Appendix 7:

2016 Operating Data

33

Mining

Processing

In 2016, the volume of mined ore

decreased by 15% mainly due to a

decrease at BG (-0.7Mt)

The stripping ratio increased by 31%

due to 2x growth at BG

Volume of ore mined:

‒ 1 425 kt at MNV (-5% y-o-y)

‒ 1 561 kt at Belay Gora (-30% y-o-y)

‒ 761 kt at Novo (+9% y-o-y)

The share of ore mined underground

increased to 40% from 33% in 2015

Volume of ore processed:

‒ 1 381 kt at MNV (-2% y-o-y)

‒ 1 643 kt at Belaya Gora (+6% y-o-y)

‒ 758 kt at Novo (+10% y-o-y)

Recovery rates remained stable due to

improvement at MNV

Average grade decreased by 5% due to

a 26% decrease at BG.

12,432

20,112 19,251

6.6 5.8 7.6

2014 Actual

2015Actual

2016Actual

Rock Mined , kt Stripping Ratio, t/t

Rock Mined and Stripping Ratio

-4%

1,193 1,467 1,501

1,627

2,961 2,245

2,820

4,428 3,746

2014 Actual

2015Actual

2016Actual

Underground Open Pit

Ore Mined, kt

-15%

3,177

3,655 3,782

2014 Actual

2015Actual

2016Actual

Ore processed, kt

+3%

3.05 2.64 2.51

83% 85% 85%

2014 Actual

2015Actual

2016Actual

Average Grade, g/t Recovery Rate, %

Average Grade and Recovery Rate

vtb capital investment forum russia calling: …...2016 production 46% baikal 9% 21% 24% mineral...

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