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Building momentum. ASX: POL polymetals.com Investor Presentation - Amended February 2025 Endeavor Mine Cobar, New South Wales Delivering on production Driving exploration growth
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Australia’s Next Silver and Zinc Producer 2 Disclaimer. This investor presentation has been prepared by Polymetals Resources Limited (“Polymetals” or the “Company”). By attending an investor presentation or briefing, or accepting, accessing or reviewing this presentation, you acknowledge and agree to the t erms set out below. Summary Information This presentation is for information purposes only and should be read in conjunction with the most recent financial reports a nd other documents lodged by Polymetals with the Australian Securities Exchange (“ASX”) in connection with its continuous disclosure obligations. This presentation does not purport to contain all of the information that an investor should consider when making an investment decision nor does it contain all of the information which would be required in a product disclosure statement or prospectus prepared in accordance with the requirements of the Corporations Act. No reliance should be placed on the information or opinions contained in this presentation, which are provided as at the date of this presentation (unless otherwise stated) and to the maximum extent permitted by law, Polymetals has no obligation to update the information contained in this presentation. An investment in securities is subject to known and unknown risks, some of which are beyond the control of Polymetals. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities. Competent Persons Statement The information supplied in this release regarding Ore Reserve and Mineral Resources is based on information compiled by Mr Troy Lowien and Mr Matt Gill, both being Competent Person’s and Members of the Australian Institute of Mining and Metallurgy. Mr Lowien is an employee and Mr Gill is a director of Polymetals Resources Ltd and both have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Lowien and Mr Gill consent to the inclusion of matters based on information in the form and context in which it appears. Historic Exploration Information The exploration results and prospects identified on the tenements includes historical pre -1989 exploration results. The explorat ion activity was undertaken by a number of companies and POL notes that the pre-1989 results are not reported in accordance with the JORC Code, 2012. A Competent Person has not done sufficient work to disclose the exploration results in accordance with the JORC Code 2012 and it is possible that following further evaluation and/or exploration work, that the confidence in the prior reported exploration results may be reduced when reported under the JORC Code, 2012. Nothing has come to the attention of POL that questions the accuracy or reliability of all the historical exploration results. Where possible, original assay reports were located to verify reported results. Future Performance and Forward-looking Statements This presentation contains certain ‘forward-looking’ statements, opinions and estimates, which are based on assumptions and contingencies that are subject to change without notice and involve known and unknown risks and uncertainties beyond the cont rol of Polymetals and its officers. This includes statements about market and industry trends, which are based on interpretations of current market conditions. Indications of, and guidance on, future earnings and financial position and performance are forward -looking statements. As are statements containing the words “expect”, “anticipate”, “estimate”, “intend”, “believe”, “guidance”, “should”, “could”, “may” , “will”, “predict”, “plan” and other similar expressions. Forward -looking statements are based on information available to Polymetals as at the date of this presentation and should not be relied upon as an indication or guarantee of future performance. Except as requir ed by law or regulation (including the ASX Listing Rules), none of Polymetals, its representatives or advisers undertakes any obligatio n to provide any additional or updated information whether as a result of a change in expectations or assumptions, new information, future events or results or otherwise. Investors are strongly cautioned against placing undue reliance on forward -looking statements, especially considering the current economic climate and significant volatility, uncertainty and disruption caused by recent w orld events such as the COVID-19 pandemic and associated economic changes. Disclaimer To the maximum extent permitted by law, Polymetals and each of its respective related bodies corporate, shareholders and affi liates, and each of their respective officers, directors, partners, employees, representatives, affiliates, agents, consultants and a dvisers (each a “Limited Party”): • expressly disclaim any and all responsibility and liability (including, without limitation, any liability arising from fault, negligence or negligent misstatement) for any direct, indirect, consequential or contingent loss or damage arising from this presentation o r reliance on anything contained in or omitted from it or otherwise arising in connection with this presentation; • disclaim any obligations or undertaking to release any updates or revisions to the information in this presentation and; • do not make any representation or warranty, express or implied, as to the accuracy, reliability, completeness or fairness of the information, opinions and conclusions contained in this presentation or that this presentation contains all material informat ion about Polymetals or the Transaction or that a prospective investor or purchaser may require in evaluating a possible investme nt in Polymetals or acquisition of shares in Polymetals, or likelihood of fulfilment of any forward -looking statement or any event or results expressed or implied in any forward-looking statement Cautionary Statement The Ore Reserve and Mineral Resource estimates underpinning the Endeavor Production Targets were prepared by a Competent Person in accordance with the JORC Code 2012. The material assumptions on which the Production Targets are based is set out in the ASX Release of Polymetals dated 16 Octob er 2023 “Endeavor Silver Lead Zinc Mine Restart Study completed” (Mine Restart Study). Polymetals confirms that all material assumptions underpinning the production targets in the Mine Restart Study continue to apply and have not materially changed. The modifying factors used in the estimation of the Ore Reserve were also applied to the Mineral Resources in the generation of t he production targets.
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Australia’s Next Silver and Zinc Producer 3 Matthew Gill GM Endeavor Mine Matthew is a mining engineer with over 40 years’ who has been instrumental in the development of four gold mines Porgera (PNG), Beaconsfield (Tas), Ballarat (Vic) and Morning Star (Vic)). He is a three-time winner of the Australian Mine Manager of the Year Award and received the AusIMM Leadership Award in 2008. Previously, CEO and MD of ASX listed White Rock Minerals and has also held the role of Group Chief Operating Officer for Singapore-listed LionGold Corp. David Sproule Executive Chairman David has worked across Australia and in Africa, leading the development of several successful gold mining and processing operations. He specialises in value creation when developing mine projects by applying an ‘owner build’ model, which has proven to significantly reduce development costs. He was previously Chairman of Polymetals from its listing on ASX in 2011 until the company merged with Southern Cross Goldfields. Alistair Barton Non-Executive Director Alistair has nearly 50 years of experience in the mining industry including exploration, project development, mining operations, contract mining and engineering services, consulting, capital fund raising and public company management. He has held the positions of Managing Director for ASX listed Probe Resources, and GM of Operations for Barrack Mines. Board and management have invested A$9.5 million and have over 30 years mining experience in the Cobar Basin. Linden Sproule Corporate Development A geologist, Linden has eight years’ experience with Alternate Capital, Private Credit, Corporate Finance, Business Strategy & Development. He has extensive international experience throughout Asia and has worked across a range of multi-faceted private equity transactions and credit deployments within the metals & mining industry. John Haley CFO & Co-Sec John has over 40 years’ experience, specifically providing taxation advice to clients in the Australian mining industry which includes approximately 20 years as a Director/Chief Financial Officer and Company Secretary of junior mining companies in Australia and Canada. He was a founding Director of three ASX listed companies, Metallica Minerals Limited (ASX: MLM), MetroCoal Limited and Cape Alumina Limited. Leadership who knows the lay of the land. Jess is an experienced exploration geologist with over 30 years’ practice in mineral exploration and management across a variety of commodities, companies and countries. He has been involved in mineral discovery, resource delineation and expansion and mining feasibility studies. He is currently the Senior Vice President – Exploration for ASX listed Paladin Energy, and has previously worked with CRA Exploration, Xstrata, and RGC. Jess Oram Exec Director Exploration
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Australia’s Next Silver and Zinc Producer 4 A$5.5m As at 31 December 2024 Share price A$0.85 As at 30 January 2025 52 week high $1.01, low $0.21 Shares on issue 197.6m Market capitalisation A$173m Cash A$13.4m Drawn Debt As at 30 January 2025 As at 30 January 2025 Available Finance A$25.5m ASX Share price performance ($A) 12 months to 30 January 2025 | Feb 2024 | Apr | Jun | Aug | Oct |Dec |Jan 2025 1.00 Corporate Snapshot. 44% Retail 35% Board 11% Institutional 6% Management Share Registry 4% MAC Copper Acquisition 0.85 0.40 0.20 0.60 0.80 As at 31 December 2024 As at 31 December 2024
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Australia’s Next Silver and Zinc Producer 5 Endeavor Mine is on track to deliver first production in April 2025, and first cash flows in May 2025. 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 6 ~A$35m institutional placement to accelerate near-mine and regional exploration. US$20M facility secured. First production in April 2025, first cash flow in May-June 2025. +$200M in existing infrastructure enabling a 14-month payback and A$609M free cash flow over initial 10 years. +20-year operation potential driven by high- grade results and regional exploration across 1,107km² in the prolific Cobar Basin. Experienced team with A$9.5M personal investment into POL and decades of mine restart success. Fully funded mine restart with rapid execution Strategic infrastructure advantage Long-term growth pipeline Proven leadership with investor alignment Funds will also provide additional working capital as Endeavor transitions into zinc/silver production. 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 7 Positioned for growth. Footprint Resource 1 Production 2 Cash Flow and Value 2 1,107km2 16.3Mt 10.6Moz A$1.9b Exploration licences x 3 in prolific Cobar Basin 30km2 Mining leases x 5 UG Mineral Resource 44.2Moz Silver, 1.3Mt Zinc, 0.73Mt Lead Payable Silver 260Kt Payable Zinc 90Kt Payable Lead Over 10-year initial mine life LOM Revenue A$688m LOM EBITDA A$609m Free Cashflow $ 1Refer Appendix 1 2Refer ASX announcement “Significantly improved Endeavor Silver Lead Zinc Mine Plan” dated 5th August 2024 5.2Mt Tailings Mineral Resource 13.2Moz Silver, 110Kt Zinc, 80Kt Lead New drilling and regional exploration targeting Resource upgrade Existing infrastructure accelerates execution and enhances returns over 10-year initial mine life Polymetals has scale, resources, and financial strength. Financial Strength A$175m Equity market capitalisation US$20m Debt facility from Ocean Partners A$26m Undrawn finance A$414m Free Cashflow Pre-tax NPV at 8% 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 8 Path to production and cash flow. 2024 2025 August 2024 Mine acquisition completed December 2024 Mining equipment delivered and underground work commenced April 2025 First ore production & mill commissioning May-June 2025 First cash flow from silver-lead & zinc concentrate August 2024 Completion of Endeavor Mine Plan October 2024 Project finance completed November 2024 Mine Restart commences in full swing 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 9 Funding secured and offtake agreements in place. • US$20M (~A$30M) facility secured – fully funds restart to production. • Payback period: 14 months from first cash flow. • A$200M infrastructure advantage reducing CAPEX. • Funds applied to restart of the Endeavor Mine with pre- production capital A$28M and maximum cash drawdown of A$30M. As at February 2025, mine restart is being delivered within budget with an expected A$20M of capital remaining to be deployed. • Strategic Ocean Partners partnership provides flexibility to pursue organic growth in parallel including exploration growth plan and other inorganic opportunities. • Favourable offtake arrangement with a blended agreement referenced to spot and benchmark terms. Mine restart funding has been secured, allowing ongoing project work with the target of delivering project cashflow during H1 2025. 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 10 Processing Plant 1.2 MTPA nameplate capacity processing plant including a surface crushing plant, SAG mill, two ball mills and Pb/Zn flotation circuit. Grid Power Sub-station owned and maintained by Essential Energy.Mine Headframe Fully equipped underground mine including a 7km decline from surface, 380m deep shaft with associated headframe, winder, U/G crusher and U/G infrastructure. Paste- fill plant - 800ktpa capacity Transport Railway to mine connected to national rail network. Offices and workshop Substantial offices, laboratory, workshops, critical spares and stores. Real estate 42 houses; Six vacant residential and industrial lots and four blocks of units. Independent valuation A$12 million Water Secure water supply via a pipeline from Cobar. +$200m worth of infrastructure in place. 1 1Como Engineers Independent Plant & Equipment Going Concern Valuation $140 million. Aspect Property Independent Property Valuation $11.38 million. Copies of reports can be found here https://polymetals.com /investors/research- reports 01 SECTION - Executive Summary
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Australia’s Next Silver and Zinc Producer 11 Equity Raising Summary 02 SECTION - Offer size and structure • Polymetals is conducting the Offer to raise approximately A$38.2 million (before costs), comprising: • A placement to raise A$35.0 million via the issue of approximately 43.8 million fully paid ordinary shares (“New Shares”) pursuant to the Company’s existing placement capacity under ASX Listing Rule 7.1 and 7.1A (“Placement”); and • A Share Purchase Plan to raise up to approximately $3.2 million (“SPP”) (together the Placement and SPP are the “Offer”) • Polymetals reserves the right to issue further New Shares as part of the Offer Pricing • New Shares will be issued at the fixed Offer Price of $0.80 per share, which represents a discount of: • 6.4% to the last closing price of A$0.855 per share on 6 February 2025 • 6.8% discount to the 30-day volume weighted average price (“VWAP”) of A$0.858 per share on 6 February 2025 Use of proceeds • Proceeds from the Offer will be applied towards: • strengthening the balance sheet as Polymetals transitions towards first silver and zinc production at Endeavor in Q2 2025; • supporting further near-mine (including Carpark) and regional exploration; and • corporate, general working capital purposes and Offer costs Share Purchase Plan • Eligible Polymetals shareholders as at the record date of 7:00pm AEDT on 7 February 2025 with a registered address in Australia or New Zealand will have the opportunity to apply for Polymetals shares pursuant to a SPP • Offer price of A$0.80 per share, the same offer price as the Placement • Up to $30,000 per Eligible Shareholder, targeting approximately A$3.2 million • Polymetals may decide to accept applications (in whole or in part) that result in the SPP raising more or less than A$3.2 million in its absolute discretion Ranking • New Shares issued under the Placement will rank equally with existing shares on issue Offer Syndicate • Blue Ocean Equities Pty Ltd and Ord Minnett Limited have been appointed as Joint Lead Managers (“ JLMs”) to the Placement • Arlington Group Asset Management Limited has been appointed as a Selling Agent to the Placement Equity Raising Overview
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Australia’s Next Silver and Zinc Producer 12 Sources and Uses of Funds 02 SECTION - Sources of funds1 A$m Equity raising proceeds from Placement 35.0 Cash (as at 31-Dec-24) 5.5 Undrawn financing facilities available (as at 31-Dec-24) 25.5 Total sources of funds 66.0 Uses of funds A$m Remaining Mine Restart Capital 22.0 CY2026 Near-mine exploration drilling (including Carpark) 7.0 CY2026 Regional exploration work 3.0 Corporate, general working capital and Offer costs 34.0 Total uses of funds 66.0 Placement proceeds to accelerate near-mine and regional exploration as well as strengthen the balance sheet as Polymetals transitions to first production at Endeavor 1. Excludes any proceeds under the SPP which will be applied to the balance sheet and working capital Endeavor Mine restart remaining capex of approx. A$20M can be funded from the Ocean Partners debt facility. Equity Raising Overview
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Australia’s Next Silver and Zinc Producer 13 Indicative Equity Raising Timetable1 02 SECTION - Event Date (AEDT) Trading Halt Thursday, 6 February 2025 Record date for eligibility to participate in SPP 7:00pm, Friday, 7 February 2025 Trading half lifted and announcement of completion of Placement Monday, 10 February 2025 Settlement of New Shares under the Placement Friday, 14 February 2025 Allotment, quotation and trading of New Shares under the Placement Monday, 17 February 2025 SPP opening date Tuesday, 18 February 2025 SPP closing date 5:00pm, Tuesday, 11 March 2025 Announcement of SPP participation results Friday, 14 March 2025 Allotment of New Shares under the SPP Monday, 17 March 2025 Normal trading of SPP shares and dispatch of holding statements Monday, 17 March 2025 1. Indicative only and dates are subject to change by the JLMs and / or the Company Equity Raising Overview
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Australia’s Next Silver and Zinc Producer 14 Endeavor Initial Mine Plan 03
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Australia’s Next Silver and Zinc Producer 15 A$1.85b in revenue to be generated over first 10 years 1 . Six-year offtake agreement with Ocean Partners, No mandatory hedging. Payable Zinc 260,000t Payable Lead 90,000t Payable Silver 10.6Moz Total Revenue A$1.856b Pre-tax Free Cashflow A$609m Pre-tax NPV @ 8% discount A$414m US$2,860/t | A$4,418/t US$2,160/t | A$3,224/t US$28/oz | A$41.9/oz Average Annual EBITDA A$89m Pre-tax IRR 345% Payback 14 monthsYears 1 -5 Revenue Split % Zinc 60 Silver 27 Pb 13 1Refer ASX announcement “Significantly improved Endeavor Silver Lead Zinc Mine Plan” dated 5th August 2024 AUD:USD 0.67 SECTION - Endeavor Initial Mine Plan 03
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Australia’s Next Silver and Zinc Producer 16 Prohibitive 100% silver royalty has been reset to a 4% Ag, Zn and Pb net smelter royalty. Elura deposit discovered (now Endeavor). Pasminco starts production @ 1.2Mtpa. POL Chairman David Sproule acquires and processes Endeavor Mine supergene tailings. Toro Zinc subsidiary CBH Resources acquires and operates mine. CBH enters 100% silver streaming royalty, signposting gradual production decline. Mine put into care and maintenance as zinc and lead alone fail to make metrics work. POL negotiates new royalty ahead of securing the mine in 2023. 1974 1983 1992 2003 2005 2020 2022 After restructuring silver royalties to reset project economics, Polymetals acquired the Endeavor Mine in 2024 following more than a year of due diligence. With silver prices at 12-year highs, removing this significant financial constraint has enabled refocus on silver production and recovery options. Royalty reset returns +25% of previously lost revenue. SECTION - Endeavor Initial Mine Plan 03
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Australia’s Next Silver and Zinc Producer 17 A$609 million in free cash flow over first 10 years. Earnings Forecast A$million 600 500 400 300 200 100 0 (100) (200) CAPEX OPEX Revenue Cum. net cash flow FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 SECTION - Endeavor Initial Mine Plan 03
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Australia’s Next Silver and Zinc Producer 18 Exploration Opportunity 04
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Australia’s Next Silver and Zinc Producer 19 Endeavor has the potential to be a multi-decade operation. Advanced priority targets north and south of Endeavor offer major regional upside. 04 SECTION - Exploration Opportunity
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Australia’s Next Silver and Zinc Producer 20 A long-life +20-year asset in one of Australia’s most prolific mining districts. Largest known ore body within Cobar Basin. Pre-development +10.5Moz Au equivalent. Zinc 1,300,000t Mineral Resources1 August 2024 Lead 730,000t Silver 44.2Moz Zinc 2,600,000t Lead 1,600,000t Silver 92.0Moz Historic Ore Production 1983 - 2020 16.3Mt 32.0Mt 04 1Refer Appendix 1 SECTION - Exploration Opportunity
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Australia’s Next Silver and Zinc Producer 21 04 Major in-mine ore reserve growth potential. 1. Refer ASX Releases: 17/04/2023 ‘Polymetals intercepts 81 m at 19.5% zinc equivalent’ and 09/05/2023 ‘Outstanding high grade assays Zn-Ag- Au-Cu-Pb at Endeavor’ Upper North Lode Contains high-grade metal1: • 2,799g/t Ag, 13.3% Zn, 22.7% Pb & 13.9 g/t Au • 34% Mineral Resource/Ore Reserve conversion • Recent drilling intercepts up to 13.5 g/t gold, 1,410 g/t silver, 12.5% zinc & 34.0% lead Deep Zinc Lodes First drilled in 2016 • Current Ore Reserve 1.73Mt @ 8.7% Zinc, 46.4 g/t Silver and 0.8% Lead • Exploration drive and drilling included in mine plan North-Western Lodes Extension • Open, with mineralised intercepts • Exploration drive and drilling included in mine plan SECTION - Exploration Opportunity
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Australia’s Next Silver and Zinc Producer 22 Near-term value creation activities. Mine restart. Processing Opportunities. Resource/Reserve upgrades. Near mine drilling and regional exploration. 01 02 03 04 • First production in April 2025 • Sale of first silver-lead & zinc concentrates May-June 2025. • Addition of leach circuit to recover further silver and gold. • Increase zinc and precious metals recovery from stored tailings. • Extending known in-mine resources, which are open along strike and at depth. • Define in-mine gold rich zones. • Continued testing of known near-mine and regional exploration targets. • 2-year $10m budget 05 SECTION - Corporate Overview
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Australia’s Next Silver and Zinc Producer 23 Appendices
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Australia’s Next Silver and Zinc Producer 24 Appendix A. Endeavor Mineral Resource Notes 1. Reported without use of cut-off grade 2. Discrepancies may occur due to rounding. 1 Refer ASX announcement “Endeavor Near Surface Resource 94% Measured & Indicated” dated 23rd May 2023 2 Refer ASX announcement “Endeavor Silver Lead Zinc Mine Restart Study completed” dated 16th October 2023 1 2 JORC Category Mt Zinc % Lead % Silver g/t Zinc Mt Lead Mt Silver Moz Measured 4.4 8.3% 5.1% 93 0.37 0.22 13.2 Indicated 8.8 7.9% 4.6% 82 0.70 0.40 23.2 Inferred 3.1 7.7% 3.7% 78 0.24 0.11 7.8 Total 16.3 8.0% 4.5% 84 1.30 0.73 44.2 Category Mt Zinc (%) Lead (%) Silver (g/t) Indicated 3.6 2.14 1.56 80 Inferred 1.6 2.07 1.53 77 Total 5.2 2.12 1.55 79 Underground JORC (2012) Mineral Resource Sector 1 Tailings JORC (2012) Mineral Resource JORC Category Mt Zinc % Lead % Silver g/t Zinc Kt Lead Kt Silver Moz Proved (UG) 0.9 6.17% 3.82% 92 56 34 2.7 Probable (UG) 2.3 6.8% 2.07% 55 156 48 4.1 Probable (Tailings) 3.4 2.14% 1.56% 80 73 53 8.7 Total 6.6 4.32% 4.5% 84 285 135 15.5 Stage 1 Endeavor Mine Plan JORC (2012) Ore Reserve The information supplied in this release regarding Mineral Resources of the Endeavor Project is based on information compiled by Mr Troy Lowien, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy. Mr Lowien is a full-time employee of Polymetals Resources Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Lowien consents to the inclusion of matters based on information in the form and context in which it appears. The information supplied in this release regarding Ore Reserves of the Endeavor Project is based on information compiled by Mr Matthew Gill, a Competent Person who is a Fellow of the Australian Institute of Mining and Metallurgy. Mr Gill is a full-time employee of Polymetals Resources Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Gill consents to the inclusion of matters based on information in the form and context in which it appears. Competent Persons Statement
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Australia’s Next Silver and Zinc Producer 25 1 2 Set out below are the principal risks and uncertainties associated with POL and its subsidiaries, which are likely to have an effect on POL’s future financial prospects. It is not possible to determine the likelihood of these risks occurring with any certainty. If one or more of these risks materialise, POL's reputation, strategy, business, operations, financial condition and future performance could be materially and adversely impacted. (1) Exploration Risk POL’s existing mineral exploration tenements are in the early stages of exploration, and there can be no assurance that exploration of the tenements currently held by POL, or any other tenements that may be acquired in the future, will result in the discovery of an economic mineral deposit. Until POL is able to realise value from its existing mineral exploration tenements, it is likely to incur ongoing operating losses in connection with those tenements. If exploration is successful, there will be additional costs and processes involved in moving to the development phase. By its nature, exploration risk can never be fully mitigated, but POL has the benefit of significant exploration expertise through its management team and of operational and business expertise at both board and management level. (2) Requirements for Capital POL's capital requirements will depend on numerous factors, including the degree of success of its planned exploration programs and production activities, its ability to generate income from its operations, prevailing commodity prices, market conditions and possible acquisitions or other corporate opportunities. Exploration costs will reduce POL's cash reserves. Those cash reserves may not be replaced if future or existing operations or other acquisition opportunities prove unsuccessful or perform below expectations. POL would then be dependent on seeking additional capital elsewhere, through equity, debt or joint venture financing, to support long-term exploration, evaluation and development of its projects. No assurance can be given that POL will be able to procure funding (if required) in a timely manner on terms acceptable to it. Any additional equity financing will dilute shareholdings and debt financing, if available, may involve restrictions on financing and operating activities. If POL is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or scale back its exploration programs, as the case may be, which may adversely impact on POL, or it may not be able to secure opportunities to acquire new projects or other corporate opportunities. (3) Tenement Titles POL could lose title to its mineral tenements if insufficient funds are available to meet the relevant annual expenditure commitments, as and when they arise. POL closely monitors its compliance with licence conditions, including expenditure commitments and rents, and maintains a dialogue with the relevant government representatives who are responsible for enforcing licence conditions. Most tenements have a long history, with multiple previous title holders. While registration on the Mineral Titles Register is evidence of ownership, it is not definitive. The registration is subject to prior registered dealings and encumbrances which may be incomplete or have not been identified and may materially affect the value of the relevant tenements and/or POL's intended operations on those tenements. (4) Reliance on Key Personnel The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on POL's Board and executive team. There can be no assurance given that there will be no detrimental impact on POL if one or more of its directors, particularly the Managing Director, or key executives no longer works with POL. (5) Risks Relating to POL's Financial Instruments POL's principal financial instruments currently comprise cash and short-term deposits, the main purpose of which is to finance POL's operations. POL has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risks arising from POL's financial instruments are credit risk, interest rate risk and liquidity risk: A.Credit Risk: POL trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the results being that POL's exposure to bad debts is not significant. Credit risk arises from the financial assets of POL, which comprise cash and cash equivalents and trade, other receivables and other financial assets. POL's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. No collateral is held as security. B.Interest Rate Risk: POL's exposure to the risk of changes in market interest rates relates primarily to POL's cash and cash equivalents with a floating interest rate. C.Liquidity Risk: POL's exposure to financial obligations relating to corporate administration and projects expenditure, are subject to budgeting and reporting controls, to ensure that such obligations do not exceed cash held and known cash inflows for a period of at least 1 year. POL has limited financial resources and may need to raise additional capital from time to time and such fund raisings will be subject to factors beyond the control of POL and its directors. When POL requires further funding for its programs in the future, then it is POL's intention that the additional funds will be raised by any one or a combination of the following: project finance, placement of shares, pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue of shares to the public and, where appropriate, debt. Should these methods not be considered to be viable, or in the best interests of shareholders, then it would be POL's intention to meet its obligations by either partial sale of POL's interests or farm-out, the latter course of action being part of POL's overall strategy. (6) General Economic Climate General economic conditions, movements in interest and inflation rates, currency exchange rates and commodity prices may have an adverse effect on POL's exploration activities and the potential for future development and production activities, as well as the ability to fund those activities. If activities cannot be funded, there is a risk that tenements may have to be surrendered or not renewed. Furthermore, share market conditions may affect the value of POL's quoted securities regardless of operating performance. Share market conditions are affected by many factors such as general economic outlook, interest rates and inflation rates, currency fluctuations, changes in investor sentiment toward particular market sectors, the demand for, and supply of, capital and terrorism or other hostilities. POL's future revenues, the economic viability of its projects, the market price for its listed securities, and its ability to raise future capital may be affected by these factors, which are beyond POL's control. Appendix B. Key Risks
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Australia’s Next Silver and Zinc Producer 26 1 2 (7) Political Risk, Commodity Price Volatility and Exchange Rates Risks Both from its existing producing operations and, in the event that POL achieves exploration success, the revenue that may be derived through the sale of commodities exposes potential income to commodity price and exchange rate risks and any profits will be exposed to changes in the taxation or royalty regime in Australia. Commodity prices fluctuate and are affected by many factors beyond the control of POL. Such factors include supply and demand fluctuations for base metals, technological advancements, forward selling activities and other macroeconomic factors. POL revenues are exposed to fluctuations in the commodity prices. Volatility in the copper price creates revenue uncertainty and requires careful management of business performance to ensure that operating cash margins are retained despite a fall in the spot copper price. The risks associated with such fluctuations and volatility may be reduced by any copper price hedging that POL may undertake. A declining copper price can also impact operations by requiring a reassessment of the feasibility of mine plans and certain projects and initiatives. The development of new ore bodies, commencement of development projects and the ongoing commitment to exploration projects can all potentially be impacted by a decline in commodity prices. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment could potentially cause substantial delays and/or may interrupt operations, which may have a material adverse effect on POL's results of operations and financial condition. Furthermore, international prices of various commodities are denominated in United States dollars, whereas some of POL's income and the majority of its expenditure will be in Australian dollars, exposing POL to fluctuations in the exchange rate between the United States dollar and the Australian dollar, as determined by international markets. (8) Permits and Approvals Risks Companies engaged in the development and operation of mines are subject to increased costs, production and other scheduling delays resulting from the requirement to comply with applicable environmental and planning laws, regulatory requirements and permitting. POL can give no assurance that relevant approvals and permits required to commence construction, development or operation of future expansions will be obtained. Additionally, future business plans and budgets are underpinned by the assumption that relevant regulatory approvals are obtained in a timely manner. (9) Environmental Risks The operations and proposed activities of POL are subject to both Australian Federal and State laws and regulations concerning the environment. As with most exploration projects and mining operations, activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. POL intends to conduct its activities in compliance with relevant environmental laws and approvals in order to minimise damage to the environment and risk of liability. However, as with all exploration and mining activities, POL's operations are expected to have an impact on the environment. There are also risks inherent in POL's activities including accidental leakages, spills, or other unforeseen circumstances that could subject POL to extensive liability. Further, POL may require approval from relevant regulatory authorities before undertaking activities that are likely to impact the environment. If POL fails to obtain such approvals, it will be prevented from undertaking those activities. POL also cannot predict what changes in legislation and regulations may govern mining and may impose significant environmental obligations on POL including bonding. No assurances can be given that new environmental laws, regulations or stricter enforcement policies (including increased fines and penalties for non-compliance), once implemented, will not oblige POL to incur significant expenses and undertake significant investments which could materially and adversely affect POL's operations, financial condition and performance. financial condition and performance. (10) Mineral Resources and Ore Reserves POL's Mineral Resources estimates for its existing projects are expressions of judgement based on industry practice, experience and knowledge and are estimates only, which are necessarily imprecise and depend to some extent on interpretations which may prove inaccurate. No assurance can be given that the estimated Mineral Resources and/or Ore Reserves are accurate or that the estimated level of copper or any other mineral will be produced. Such estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques. Actual mineralisation or geological conditions may be different from those predicted. No assurance can be given that any or all of POL's Mineral Resources constitute or will be converted into Ore Reserves. Actual Mineral Resources and/or Ore Reserves may differ from those estimated, which could have a positive or negative effect on POL's operational or financial performance. Commodity price fluctuations as well as increased production and costs may render POL's Mineral Resources and/or Mineral Resources or Ore Reserves unprofitable to develop at a particular site or sites for periods of time or may render Ore Reserves containing relatively lower grade mineralisation uneconomic. Estimated Mineral Resources and/or Ore Reserves may have to be recalculated based on actual production experience. Any of these factors may require POL to reduce its Mineral Resources and/or Ore Reserves, which could have a negative impact on POL's financial results and the expected operating life of their Operations. (11) Production and Cost Estimates The ability of POL to achieve its production expectations or meet operating and capital expenditure estimates on a timely basis cannot be assured. The operations and assets of POL, as with any other mining operations, are subject to a number of uncertainties, including in relation to ore tonnes, grade, metallurgical recovery, actual realised values and grades of stockpiles (which are to date estimated), ground conditions, operational environment, funding for development, regulatory changes, weather, accidents, difficulties in operating plan and equipment and other unforeseen circumstances such as unplanned mechanical failure of plant or equipment. No assurance can be given that such estimates will be achieved. As a result, there is a risk that POL may not achieve its production or cost estimates or expectations. Failure of POL to achieve production or cost estimates could have an adverse impact on POL's future cashflows, profitability, results of operations and financial condition. Costs of production for POL may be affected by a variety of factors, including changing waste to ore ratios, geotechnical issues, unforeseen difficulties associated with power supply, water supply and infrastructure, ore grade, metallurgy, labour costs, changes to applicable laws and regulations, general inflationary pressures and currency exchange rates. Unforeseen production cost increases could result in POL not realising its operational or development plans or in such plans costing more than expected or taking longer to realise than expected. Any of these outcomes could have an adverse effect on POL's operational or financial performance. Appendix B. Key Risks
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Australia’s Next Silver and Zinc Producer 27 1 2 (12) Geological and Geotechnical There is a risk that unforeseen geological and geotechnical difficulties may be encountered when developing and mining ore reserves, such as unusual or unexpected geological conditions, pit wall failures, rock bursts, seismicity and cave ins. Unforeseen geological and geotechnical difficulties could impact production and/or require additional operating or capital expenditure to rectify problems and in doing so have an adverse effect on POL's operational or financial performance. (13) Equipment and Supplies The price and availability of resources required for POL's operations (such as diesel, gas and other fossil fuels) may change from time to time, and this may materially impact the operations, financial position and profitability of POL. POL requires certain consumables, spare parts, plant and equipment (e.g. drill rigs) and construction materials for its exploration, development and mining activities. Any delay, lack of supply or increase in price in relation to such equipment and material could have a material and adverse impact on POL. (14) Operational Risk Drilling, mining and processing activities carry risk and as such, activities may be curtailed, delayed or cancelled as a result of a number of factors outside POL's control. These include geological conditions, technical difficulties, securing and maintaining tenements, weather, residue storage and tailings dam failures and construction of efficient processing facilities. The operation may be affected by force majeure, changes in geology, fires, labour disruptions, landslides, and the inability to obtain adequate machinery, engineering difficulties and other unforeseen events. As with most mines, reserves, resources and stockpiles are based on estimates of grade, volume and tonnage. The accuracy and precision of these estimates will depend upon drill spacing and other information such as continuity, geology, rock density, metallurgical characteristics, mining dilution, costs, etc. which evolve as the mine moves through different parts of the ore body. POL will endeavour to take appropriate action to mitigate these operational risks (including by properly documenting arrangements with counterparties and adopting industry best practice policies and procedures) or to insure against them, but the occurrence of any one or a combination of these events may have a material adverse effect on POL's performance and the value of its assets. (15) Development, Rehabilitation and Mining Risks When POL conducts exploration and feasibility studies on potential projects, the commercial viability of any such endeavours is based upon estimates of the size and grade of relevant resources or reserves, location of infrastructure and other required resources (such as energy and water), potential production rates, the feasibility of recovery of metals, capital and operating costs, and demand and prices of the products. Certain projects may be conditional on favourable environment assessments, further feasibility studies, the grant and maintenance of necessary permits and authorisations, and availability of adequate financing. It is possible that certain projects may be delayed, cancelled or otherwise adjusted due to a lack of commercial viability associated with such factors, for example, unforeseen geological and geotechnical difficulties causing additional operating or capital expenditure and adversely impacting POL's operational or financial performance. POL may conduct or oversee the conduct of certain rehabilitation. There is no guarantee that such rehabilitation works will occur on time or at cost, and there is a risk that they may involve unanticipated or higher than expected costs or delays, including due to factors beyond POL's control such as weather events, legal requirements, geological issues, technological change and market conditions. It is possible that development projects do not realise their predicted value or revenue due to circumstances beyond POL's control. Each ore body is unique. The nature of mineralisation, the occurrence and grade of the ore, as well as its behaviour during mining and processing can never be wholly predicted. Estimations of the tonnes, grade and overall mineral content of a deposit are not precise calculations but are based on interpretation and samples from drilling, which, even at close drill hole spacing, represent a very small sample of the entire ore body. (16) Infrastructure and Transportation As or when POL is in production stage, the products will need to be transported to customers domestically and internationally. The transportation process involves risks, including the remoteness of POL's projects. Fuel costs, unexpected delays (including through inclement weather and climate change and accidents) could materially affect POL's financial position and profitability. Moreover, there are risks associated with the availability of adequate transportation facilities (e.g. road, railway, port) and obtaining approvals to access these facilities (including the timing and conditions on which access may be granted). If POL cannot access the required infrastructure within a certain time period or at a reasonable cost, this could adversely affect POL's operations and financial performance. The price of transportation is market driven and can vary throughout the life of each project. These may also impact on the overall profitability of POL. (17) Laws and Authorisations POL's operations will be subject to various laws and plans, including those in respect of mining, prospecting, development permit and licence requirements, industrial relations, environment, land use, royalties, water, native title and cultural heritage, mine safety, occupational health and plants and animals (for example laws or permitting required in relation to preservation of endangered or threatened species). Approvals, licences and permits for the compliance with these rules may be subject to the discretion of the applicable government or authorities, the local community or other stakeholders. Moreover, new laws and regulations may be enacted, and existing laws and regulations may be amended or applied in a manner which could impact POL's exploration, development or production activities. POL may not be successful in obtaining any or all of the various approvals, licences and permits or maintaining such authorisations in full force and effect without modification or revocation or may not obtain the relevant authorisations in time. If so, POL may be limited or curtailed from continuing or proceeding with exploration, production or development activities. Appendix B. Key Risks
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Australia’s Next Silver and Zinc Producer 28 1 2 This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitted below. New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (New Zealand) (the "FMC Act"). The New Securities are not being offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) other than to a person who: • is an investment business within the meaning of clause 37 of Schedule 1 of the FMC Act; • meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act; • is large within the meaning of clause 39 of Schedule 1 of the FMC Act; • is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or • is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act. Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). Accordingly, this document may not be distributed, and the New Shares may not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO and any rules made under that ordinance). No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors. No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If You are in doubt about any contents of this document, You should obtain independent professional advice. Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part 13 of the Securities and Futures Act 2001 of Singapore (the “SFA”) or another exemption under the SFA. This document has been given to You on the basis that You are an “institutional investor” or an “accredited investor” (as such terms are defined in the SFA). If You are not such an investor, please return this document immediately. You may not forward or circulate this document to any other person in Singapore. Any offer is not made to You with a view to the New Shares being subsequently offered for sale to any other party in Singapore. On-sale restrictions in Singapore may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”) has been published or is intended to be published in respect of the New Shares. The New Shares may not be offered or sold in the United Kingdom by means of this document or any other document, except in circumstances that do not require the publication of a prospectus under section 86(1) of the FSMA. This document is issued on a confidential basis in the United Kingdom to “qualified investors” within the meaning of Article 2(e) of the UK Prospectus Regulation. This document may not be distributed or reproduced, in whole or in part, nor may its contents be disclosed by recipients, to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to the Company. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (“relevant persons”). The investment to which this document relates is available only to relevant persons. Any person who is not a relevant person should not act or rely on this document. European Union (excluding Austria) This document has not been, and will not be, registered with or approved by any securities regulator in the European Union. Accordingly, this document may not be made available, nor may the New Shares be offered for sale, in the European Union except in circumstances that do not require a prospectus under Article 1(4) of Regulation (EU) 2017/1129 of the European Parliament and the Council of the European Union (the “Prospectus Regulation”). In accordance with Article 1(4)(a) of the Prospectus Regulation, an offer of New Shares in the European Union is limited to persons who are “qualified investors” (as defined in Article 2(e) of the Prospectus Regulation). Appendix C. International Selling Restrictions
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Linden Sproule Corporate Development Polymetals Ltd ABN 76 075 103 221 ASX:POL Unit 1, 101 Main Street Alstonville New South Wales 2477 Australia linden.sproule@polymetals.com +61 0439 134 408 Join the conversation www.x.com/polymetals Follow us www.linkedin.com/company/ polymetals Subscribe to our e-news: polymetals.com eNews Connect with us.