Good day, and welcome to the Polymetal FY 2021 results conference call. This call is not for media. If you are a media representative, please disconnect now. At this time, I'd like to turn the conference over to Vitaly Nesis. Please go ahead, sir. Ladies and gentlemen, welcome to the conference call on Polymetal International results for 2021. For the obvious reasons, we will be concentrating not so much on the historical results but on the present situation. We are all at Polymetal shocked and appalled by the war going on in Ukraine. The related economic and political developments are likely to require a lot of management efforts to maintain company performance. However, despite a wide range of uncertainties we will be working under in 2022 and maybe longer, it is our current intention to operate as normally as possible in order to preserve shareholder value, but also to address the needs and concerns of other stakeholders, including our employees and communities where we operate. Today's call will be structured differently compared with the traditional results calls. I will first brief you on the current situation that Polymetal finds itself in. Now then I will go through the brief financial highlights for 2021 and current outlook, and we will conclude with Q&A. Today two language lines for questions will be available, both English, which will come first, and then Russian. In terms of the current situation, again, I would like to stress an unprecedented for the team level of uncertainty. However, presently all of the operations are continuing normally. The operating activities are continuing, and the project execution is also ongoing. In terms of the financial and liquidity situation, the Central Bank of Russia has announced on Sunday that it will resume the domestic purchases of gold and silver bullion. We believe we have sufficient channels of sales from our Russian operations to ensure that we are both liquid and solvent. In terms of the direct sanctions impact, so far we don't see any direct sanctions impact. We believe that the sanctioned counterparties that we have dealt with can be discontinued and replaced, if needed, by non-sanctioned entities. In terms of the supply chain, we currently don't see any threat to operations, as we so far haven't seen any sector-specific trade sanctions. We also already for several years have backup plans to replace the imported consumables by domestic or Chinese consumables in case the sanctions will be expanded and will include the goods that are necessary for the continuation of our activities. Currently, the largest challenge that we expect to face in the coming months is the logistical challenge related to significant disruption of container ship service to and from Russia. The management is very busy evaluating different options. I would like to stress that this situation is not expected to have any impact on the current performance, given pretty significant stock levels which we have accumulated during the COVID pandemic. Also because we have backup plans in terms of consumables and critical equipment. Now let me conclude with the 2022 outlook. Again, the devastating war in Ukraine is certain to require significant management efforts to maintain our performance. Now, we will do our best to serve the interests of all of our stakeholders while maintaining company values. The group reiterates the current production guidance of 1.7 million ounces of gold equivalent for the current year. Traditionally, production will be weighted towards H2 due to seasonality at several operations. We do not expect that the scope of operational activities will change materially in the light of recent developments. We also don't expect that the current capital project investment will change materially. I refer to the projects which are more than 20% completed. Still, the management is in the process of project review now for the projects not completed by more than 20%, and the results of this review will be provided within 4 weeks of this call. I'm forced to suspend both CapEx and OpEx guidance for 2022. CapEx mostly because of the potential changes to the new projects. TCC and AISC guidance mostly due to the unpredictable path that the exchange rates and domestic inflation will take in 2022. Now, having reiterated production guidance and suspended cost guidance, I'm pleased to say that we maintain our commitment to adhere to the previously announced carbon footprint reduction trajectory, which calls for the reduction by 30% by 2030. We continue to plan to release our long-term GHG reduction goals by the end of the year. In terms of the outlook, last but not least, we currently plan to pay a regular annual dividend. This will come for approval at the AGM at the end of April to be paid by the end of May. However, citing again the aforementioned uncertainties, the management and the board reserve the right to exercise judgment and discretion and to postpone or partially postpone or cancel the dividend if the political and sanctions situation changes significantly. So much for 2022's outlook. In terms of 2021 highlights, you know, just several bullet points. The year was successful in terms of our production and project advancement results. We beat our production guidance. We advanced our projects on schedule despite very significant COVID-related challenges. Total cash costs and all-in sustaining costs were up significantly year-on-year by 16% and 18%, respectively. That was the combination of factors reflecting mostly high inflationary pressures, particularly in the CapEx. You know, net earnings declined by approximately 15%, but still stood at about $900 million, mostly reflecting the higher costs that I talked about. CapEx was probably the biggest disappointment because we had to revise our capital guidance, CapEx guidance for the year a couple of times, mostly due to the significant and somewhat unforeseen pressures affecting global supply chains as an indirect consequence of the COVID pandemic. We also continued to invest in pre-stripping at a range of our projects, which, as we see now, will be extremely helpful in terms of weathering potential uncertainties and instability in the operating environment. Net debt increased through the year, and we paid $635 million of dividends, a record amount in the company's history. I would like to stress that the group generated very significant free cash flow in 2021. Although the net debt increased, that mostly represented a significant pace of capital investment in future production, which should maintain the company at our growth path going forward. I would also like to stress that we are ahead of our plan in terms of greenhouse gas emissions intensity reduction. We reduced it by 9% compared to 2019, mostly thanks to energy efficiency initiatives and the implementation of local and grid renewable energy sources. In terms of safety, last but not least, we are on the one hand satisfied that we didn't have any fatalities among company employees in 2021, although we regret to report that one of our contractors lost his life at our operation. We intend to continue to position ESG criteria front and center in terms of priorities and drivers for management compensation in 2022. With this, I conclude my introduction. Please refer to the presentation available on the webcast. Now you can ask questions both relating to my speech and to the presentation. Thanks. Ladies and gentlemen, if you'd like to ask a question, you can do so by pressing star one on your telephones. That's star one if you would like to ask a question. We will now take our first question from Krishan Agarwal from Citi. Please go ahead. The line is open. Hi. Thanks a lot for taking my question. Indeed, some difficult times. Can you please elaborate on your ability to conduct the bullion sales into U.S. dollars, which you also alluded to in your release? I mean, I can see that you're comfortable in terms of your guidance of 1.7 million ounces, but how should the market think about getting that the gold sold in the market and realizing the pricing? That's my first question. Well, thanks for the question. It's a good one. Internal bullion sales in Russia have always been conducted in rubles at the prevailing market gold price and at the prevailing foreign exchange rate. The Central Bank announcement on Sunday specifically mentioned that gold will be sold at LME close and at prevailing Forex rate. We will receive rubles which we then will apply to pay our domestic bills. In terms of the hard currency that we need we have a substantial external sales except bullion concentrates, for example. We also are evaluating restarting direct exports to third countries. First, we don't think sanctions against the Central Bank will anyhow impact their ability to pay us 'cause the transactions will be in rubles. Secondly, we will be able to procure the hard currency required, be it for imports of consumables and equipment or for debt payments or for dividend payments. Although, the latter so far is suspended by the government decree. Okay. In that context, can you help us breaking down as how much of the sales is dollar-denominated as of now, and how much is in the ruble and also the proportion of the expenses operating costs? If we take the group in general, Russia plus Kazakhstan, I would say that approximately 40% of sales and 25% of expenses other than debt repayment and dividends are denominated in dollars. We have a pretty sizable kind of currency gap between dollar receipts and dollar outlays, which is sufficient to cover our requirements for capital returns, even if ruble-dollar trade in Russia becomes somehow illiquid and decoupled from the market. Got it. So far you don't have any indication that the sales to the Central Bank of Russia is going to be disrupted or is there kind of a the pace is going to come down from the Central Bank purchases in Russia? Well, we don't sell directly to the Central Bank of Russia. We sell to commercial banks in Russia. I think the other trend we will see very shortly is a pickup in physical demand from individuals locally again as a way to, you know, diversify away from the dollar and buy safe haven assets. Especially given the fact that, you know, generally the equity market where a lot of Russian individuals were active has suffered quite significantly. We don't see any kind of imminent risk here. Got it. Even if we can't deal with the central bank directly because of the sanctions, I repeat Maxim's point. We can deal with the banks, and we can also sell bullion through the Russian Commodity Exchange. It has been quite a calm place for many years. Now we expect rapid rejuvenation of activity given the range of sanctions against Russian entities. Got it. My last question is on POX Hub. I remember from memory that you had, you know, a few of the equipments, you know, pending to come from Europe. How should we think about those equipments availability and then any kind of a timeline slippages for the POX Hub commissioning in 2023? Well, definitely, the risks to the schedule for POX Hub have increased significantly. These risks probably come not from the delivery of equipment because the bulk of equipment and definitely all of the difficult and complex equipment has already been delivered to site. We are still awaiting a lot of pipes and quite a bit of electrical appliances, et cetera, which are currently not subject to the trade sanctions. However, we can reasonably expect delays, including delays for example in getting the commissioning personnel on site. We believe that all these complications can be addressed in the worst-case scenario by switching some of the materials to the sources outside of the sanctions realm, so to speak. The risk to the timeline is quite palpable. We expect to have more transparency about the potential slippage within the next couple of months as the practice of actually maintaining certain trade sanctions is observed. Because, for example, Europe has banned the exports of dual-use equipment and materials, but obviously, this definition is not specific enough to understand how it will be implemented in practice. We need several months to understand the impact of the sanctions on the schedule. However, we remain quite confident that the project will be brought to the finish line, although maybe later than currently expected. Okay. Got it. Thanks a lot. That's it from my side. Thank you. We will now take our next question from Alan Spence of Jefferies. Please go ahead. The line is open. Hi, guys. Thanks for taking the question. Two. In the first one, just around the dividend. If you were to try to pay that today, is there any impact from the SWIFT ban on some of the banks or just kind of if you could help talk around maybe some of the technicals about how you would pay that dividend or if there's no impact at this point? Well, to start with, Alan, SWIFT is irrelevant for the physical ability to move funds. Switching off SWIFT, switching Russian banks off SWIFT doesn't make transactions impossible. It just makes them much more expensive in terms of transaction costs, so money still can be moved around. Why we are being very cautious about the ability to pay dividends, this is not really about our ability to move money. This is more about the risk of increasing capital controls in Russia and the potential disconnect between the global gold price and the domestic gold price, or in general, further tightening of the sanctions, which would lead to more significant trade bans or logistical challenges. This is in essence the risks and uncertainties which underpin our cautious approach to dividends. In terms of liquidity and current ability to move money, this is not an issue. Thanks. That's very helpful. Second one, just on the FX exposure on the CapEx side, how much of 2022 CapEx would be ruble or paying versus dollar? You know, I honestly I can't really answer you because ruble was 75 rubles per dollar a couple of weeks ago. Over the last three days, it was anywhere from 90-115. The domestic inflation trends are, you know, totally unpredictable. Before the war started, the budget called for the split of approximately 60% ruble, 40% dollar and euro. Okay. Thank you very much, Vitaly. I appreciate plenty of moving parts, that's it from my side. Thanks, guys. Thank you. As a reminder, if you would like to ask a question, you can press star one on your telephones now. We will now take our next question from Boris Sinitsyn from Renaissance Capital. Please go ahead. Hi, gentlemen. Thanks for your presentation and the opportunity to ask questions. Basically a few from my side, please. Firstly, in terms of your reiterated production guidance, just probably to push you a bit on this, does it really mean that you are quite confident in achieving these numbers despite the potential disruptions, or it's still subject to? That's the first one. Hello, Boris. This is a very good question. You know, if you remember our previous call, we used to have 2023 guidance, and now we pulled 2023 guidance, 'cause we are no longer certain in 2023. We are confident in 2022. We believe that we have enough kind of fat, it's not a perfect word, but enough of a buffer to take us through this year, even in the quite negative scenario implying further deterioration of the sanctions. For 2023, situation becomes more challenging, mostly because of the potential logistical difficulties. That's why we kind of for now are not reiterating 2023 guidance. We believe that we have very good clarity in terms of consumables, equipment availability, et cetera, for this year. For the next year, we are more cautious. Thank you. That's very clear. Second question from my side is on management attitude towards buybacks. Has it changed recently? Would you consider buyback in addition to dividends for this year? Well, the board discussed buybacks yesterday actually, and more or less the unanimous opinion was they don't make any sense. Right now, both the board and the management are committed to maintaining the stability of the company, and managing the company, the business, not managing the share price. Thank you. Actually two last questions from me. Firstly, what was your TCC at Nezhda in the H2 of last year? The last question, on Veduga, the fact of sanctioning of your counterparty with deposit, does it change anyhow your timing in terms of consolidation? Thank you. On TCCs on Nezhda, we haven't, you know, formally recorded any sales in the fourth quarter, so therefore we don't have TCC numbers. We have so-called TCP numbers, which is total cost of production. As you might imagine, just right at after the startup, these were, you know, quite elevated to the level of approximately $3,000 and $1,400 per ounce. That's obviously not indicative of the full ramp-up performance that we observe right now. Regarding Veduga transaction, we are not prepared to, you know, initiate an accelerated buyout at the moment for clear reasons. We will, you know, discuss with VTB whether they would be, you know, prepared to structure the transaction. Yeah. That would satisfy all of the involved parties' interests. You know, realistically, right now we don't have the money. You know? We are not pressed to transact from a legal perspective either. Okay. That's very clear. Thank you so much. That's it. Thank you. We will now take our next question from Jonathan Guy from Berenberg. Please go ahead. The line is open. Hi, guys. Thanks very much for doing the call this morning. Couple of things. Firstly, just in terms of the Kazakh element to the business, can you just say how those are positioned, you know, relative to the Russian elements and whether, you know, ultimately, you may look at having to split those out into a separate entity? Secondly, can you just discuss the balance sheet, where the debt lies in terms of European, Russian, Japanese, and other entities at the moment, and what the strategy will be around sort of putting in new debt from within Russia or from within China moving forward? In terms of the first part of your question, obviously, this is the line of inquiry which is very active right now, both from analysts and from institutional investors. Frankly speaking, the management has been so busy fighting fires, figuratively speaking, over the last week that we didn't have time to give to undertake a proper analysis of this opportunity, although intuitively it makes sense from the point of view of very different risk profiles that the two jurisdictions we operate in currently now have. Given the legal and the financial and the political repercussions of such a potential transaction, we are not really prepared to opine whether such a transaction is feasible, although the management is definitely committed to evaluating, you know, the potential benefits and costs of such an approach. Yeah. Jonathan, regarding the second question, our loan portfolio right now is represented roughly in 60% by the largest banks, none of them SDNs. There are quite a few European banks, the likes of ING, Société Générale, Raiffeisen Bank, and UniCredit. We don't have any meaningful exposure to Japanese banks at the time. One thing we did proactively in January, we actually borrowed from available credit lines to increase cash balances so that we cover all of the repayments over the course of the next 12 months. Actually, against the 2022 repayments, we have you know cash readily available. So far we see you know that funding is available from both categories, European banks and both banks. The prices for new loans have obviously skyrocketed, but with what I've just said, we are not pressed to borrow any large amount at the moment in the short term. We will try and wait until you know the situation calms down and then reevaluate the funding strategy. Okay. Thank you very much. Thank you. Okay. Right. Shall we move to the webcast questions, which I will probably try and read out. Question number one is from Pier Paolo Arcangeli. Apologies if I'm mispronouncing this. Are you currently experiencing difficulties or impediments in selling and settling gold via the usual channels? I think this question we have already covered. Second question is, what is your perceived risk of ending up in the U.S. sanctions list, potentially losing depository bank or similar counterparty essential to settlement on the London Stock Exchange and therefore being delisted? Well, we definitely cannot rule out such an eventuality, but we view this as very unlikely. So far, all of the persons and entities sanctioned have had a very specific and objective link to the Russian state, Russian government in general, broadly. We are essentially a public company with the largest shareholder holding less than 25%. On the list of the potential risks that the group faces, I would rate this particular one as a relatively low priority. Operator, we can switch to the Russian line now. Thank you. We will now move to the Russian line. We will take our first question from Alexey Karakovskiy. Please go ahead. The line is open. [Non-English content]. Good afternoon. In terms of any capital controls... Hello? Hello? Well, in terms of capital controls, the currently imposed controls are material for us in only one respect. Russian entities are currently banned from paying dividends to offshore shareholders. Russian operational entities cannot pay dividends to our Cyprus-based holding company. Clearly, if this situation persists, we will be limited in our ability to raise money for dividend payment from Russia, but currently not from Kazakhstan. How long the situation will persist is unclear. However, you know, from the current dividend requirements, the free cash flow from Kazakhstan is actually covering this. [Non-English content]. Does the company plan to re-domicile? Well, which company and where? Like, the simple answer is no. [Non-English content]. Hello, and thank you for your presentation. [Non-English content]. It’s just the trading at MOEX which is low. We don’t see this having an impact on our ability to pay dividends and this, obviously, does not affect our liquidity. Well, ladies and gentlemen, thank you very much for your attention and for your questions. We stand ready to answer further questions directly addressed to the Investor Relations team or to the top management. Have a good day. Thank you. Bye-bye. Ladies and gentlemen that will conclude today’s call. You may now disconnect.