Good morning, and welcome to Polymetal Q3 2023 Production Results, presented by Chief Executive Officer, Vitaly Nesis, and Chief Financial Officer, Maxim Nazimok. The presentation will be followed by a Q&A session. I will now hand over to Mr. Vitaly Nesis. Thank you very much, ladies, and gentlemen. Welcome to the call on Third Quarter 2023 Production Results. I'll take you through the highlights of the quarter, and then we'll have a Q&A session. Now, overall, the third quarter of 2023 returned positive results, both for the business of the company in Kazakhstan and for our Russian business. Now, production in Russia actually increased by 19%, and the decline in Kazakhstan in production was less than in previous quarters as the business there is catching up with the difficulties caused by the imposition of U.S. sanctions against the Russian subsidiary. Importantly, there have been no fatal accidents during the first nine months of 2023 among both our contractors. And we managed to maintain stable lost time injury frequency rate, now, and none of the nine lost time accidents in the first nine months of this year resulted in permanent disability or serious damage to health. In terms of the monetization of inventories, we continue to address this issue, and management attention has been very much focused on concentrate inventory release in the third quarter. We managed to liquidate the bulk of gold bullion inventory and started to work on concentrate inventory unwind. However, another challenge has emerged in the third quarter, which is silver inventories. As has been mentioned during the previous calls, we, the Russian business, have stopped selling silver concentrate to Glencore following the sanctions imposition on the Russian business. As a result, Dukat now produces not concentrate, but silver bullion, and the Russian business is currently struggling to place all that bullion into the global market. As a result, we have run a pretty big file of silver bullion, and that actually, as much of the free cash flow. Nevertheless, revenue for the quarter increased by 17% year-over-year and stood at $834 million. We also reported a pretty strong increase in EBITDA, thanks both to growth in ounces sold and to revaluation of the Russian ruble. Net debt decreased quarter-on-quarter by about 10% as the company generated free cash flow, supported by seasonal release of inventories, as well as a depreciation of the Russian ruble. I have to admit that the decrease in net debt was not as significant as we had hoped, both for the reason of silver stockpile accumulation, but also and kept introducing additional restrictions on both the exports of gold-bearing concentrates, but also on the payment mechanics for such materials. Again, as a result, we continue seeing a pretty big stockpile of gold concentrates. Unfortunately, we were not able to decrease net debt as quickly as we expected. Polymetal is on track to meet its full year production guidance of 1.7 million oz, 1.2 million oz in Russia, and 0.5 million in Kazakhstan. We maintain our TCC and AISC guidance. Clearly, the estimates remain contingent on exchange rates, and I also have to draw your attention to the fact that Russia has introduced export tariffs on the vast majority of export goods, including this time on gold and silver. This export levy with the rate varying dependent on ruble-dollar exchange rate is likely to amount to 7% for the month of October, and going forward, it will fluctuate between 3%-7%, dependent on the exchange rate. That obviously will have a negative impact on the Russian business profitability and margins. And last but not least, a brief update on the disposal of the Russian business, and the situation regarding the potential dividends. We continue to work on the disposal. As previously stated, we are very much focused on ensuring compliance with the relevant sanctions. Therefore, the process is not moving forward as quickly as we could have hoped. Also, continuous introduction by the Russian Government of various capital controls now places additional complications on the potential transaction structure and execution. Now, as a result, so far, we have not been able to finalize or even to estimate the potential deal terms. Nevertheless, we continue to push on. We are engaged with several potential interested parties. And we remain firmly committed to dispose of the Russian business in the timeline which we have provided when we re-domiciled to the Astana International Financial Centre in August of this year. Clearly, the dividend decisions for the company will depend on the progress with the sale of the Russian business. Until this sale is finalized and actually executed, I don't think it would be appropriate for the company to pay a dividend. I remain hopeful that dividend distribution will be on the board's agenda when we approve the report for 2023, and as such, dividend payment would be possible based on the results of the full year 2023. Now, this represents a slippage compared with our previous expectations, but again, now both operational difficulties in terms of unwinding the inventory and complications in terms of completing the sale of the Russian business are pushing back the dividend distribution a bit into the future. Now with this, I complete the highlight section, and I turn to questions. Now, please feel free to submit them through the webcast. Now, I will not respond repeatedly to the questions about dividends and about the sale of the Russian business, because I think I have been sufficiently clear on these issues during the presentation. What do you think of the arbitrage opportunity in the share price of Polymetal on AIX versus MOEX? Why the spread is so huge, and how do you expect it to evolve going forward? I am myself perplexed about this situation. Now, I would like to remind you that in the case of any dividend payment or corporate action, now, the shareholders who hold their shares at MOEX will not be able to receive a dividend, and they will not be able to vote. So from my perspective, the current situation is not reasonable and does not reflect the fundamental rights of the shareholders who are currently hold their stock at MOEX. The management is working on various ways to unlock the value for MOEX shareholders. Now, however, this is obviously linked to the process of selling the Russian business, so we hope to present kind of a all-in solution. I'm not sure of it, but the current arbitrage to me makes no sense economically. When do you expect POX-2 will be completed, and when it will be full operation? We currently target the startup of POX-2 for the first of September 2024, and we expect to reach 100% capacity by the end of the next year. One minute you say no dividends until the sale is completed, then in the next sentence, you say dividends will be on discussion at the 2023 final results discussion. Clear, the board will discuss the final 2023 results at the time of the approval of annual financial statements in March 2024. This is the traditional timing of the annual report approval. March 2024, the board will look at the results for the year, will hopefully look at the Russian business sale being completed and make a decision on the dividends. Why can't you pay dividend of at least $0.10 per share? It would be like manna from heaven for long-suffering retail shareholders. It wouldn't create an unmanageable hardship for the company. I agree that it would not create an unmanageable hardship for the company, but it will send a certain message to authorities in Russia who will one way or the other have a say in the completion of the sale of the Russian business. We believe that we don't need to get any approval from the Russian Government for such a transaction, but given the current trend of capital controls imposition in Russia, the transaction itself may not be subject to approval, but the repatriation of the proceeds out of Russia will certainly attract close government scrutiny. We don't want to piss anybody off by paying a dividend to shareholders who, from the point of view of the Russian Government, mostly represent the residents of unfriendly countries.... Could the changing political conditions created by the Russian Government make taking capital out of Russia more difficult or even impossible post-sale of the Russian business? I think this is a somber yet accurate assessment of the emerging risk. That's why the management's task of value extraction from the sale of the Russian business has been made more difficult recently. But we are on the ways to ensure from the sale of the Russian business. Management's position on dividends has been inconsistent. In the last call, it was suggested December was reasonable. Yes, I admit, last call, I suggested December was reasonable, but the external situation has changed. The sale process for the Russian business has not been as quick as we have expected, and the imposition of capital controls doesn't help. As a result, I have to retract my earlier forecast and admit that paying a dividend this year is just not realistic. Can you rule out a management buyout of Russian business? Yes, I can. I rule out management buyout of Russian business. What is your plan B if the sale of the Russian business is not successful for whatever reason? I think, well, there is a plan B in terms of the conditions we may face in terms of the sale. But I think the sale itself, it has no alternative, so there is no substantive plan B. Could you give an adjusted timeline for the sale in the light of the changed circumstances? Again, the timeline itself has not changed. We are still bound by our undertaking to Astana International Exchange. The sale needs to be finalized in terms of the documents no later than the first quarter of the next year, and completed soon thereafter. So we stick by the timeline, although the process itself turned out to be much more difficult. How have the interest rates on debt changed from last year? Presumably, rates have gone up. Are we paying more on interest now in total, even with the reduction in debt? Yes- Let me take that. Yeah, please. Yeah, well, basically, the interest rates have moved up, mostly due to the fact that most of the ruble-denominated borrowings of the group are at floating interest rates, so any increase in the central bank's key rate had a direct impact. But still, overall interest rate on the portfolio is around 6.5%-7% weighted average. It's been trending up, but not to a critical level. So the interest expense has gone up somewhat, but this is not very significant for the company. Current annual CapEx is clearly very significant. Just curious to know in which year total CapEx will decrease substantially? I think the decrease will start next year. We expect something like $650 million-$700 million of CapEx this year at current exchange rates. Next year, that number will go down to about $400 million-$450 million. I think the normalized level is probably around $300 million-$350 million. Can you provide details on current inventory levels for both gold and silver? I don't have concentrates number handy, but in terms of bullion, gold, excess gold bullion inventory is insignificant. We're probably talking 20,000-30,000 oz, not more than that. In terms of silver, now we have something like 3.5 million oz of silver bullion, which definitely is way above the normal level. We currently work on selling this material into Asian markets, including, for example, India, where we haven't been active in silver ever. So hopefully, this issue will be at least partially resolved by year-end. Have you made any progress on POX-3? Yes, I think a substantive update is coming up by the end of the year. Now we have signed up our engineering partner, Hatch, to do basic engineering and detailed engineering for the project. We are proceeding with permitting in Kazakhstan, which is a tricky exercise given the scale of the project and the use of multiple chemical substances. Now we remain committed to complete the basic engineering by the end of the next year, and by which time the project will be ready for the formal investment decision, including CapEx estimates and the NPVs. Can you just clarify what commitments, legal or otherwise, the company is under to sell the Russian assets?... by the Astana International Exchange. When we redom to Kazakhstan, we signed a formal undertaking that the company will sell its SDN sanctioned Russian subsidiary within nine months. And this is a formal document which served as a precondition of redom. Clearly, we cannot be expelled from the AIFC, but we believe that this commitment more or less represents a contractual obligation, the breach of which will be to the serious detriment of the company. Is offtake agreement of processing Kazakhstan ore in Russia still ongoing, and do you foresee any changes to that post- Polymetal sale? We are still engaged with the regulators. We have not received any final ruling from them. So this is another important element that's outstanding before the sale can be completed. Kazakhstan part of the business doesn't have much exposure to silver. Are you concerned about this lack of exposure? And what metals would you like to focus on in Kazakhstan? No, I don't think the absence of silver is a material concern for Kazakhstan business. We will focus on gold and copper in Kazakhstan and Central Asia in general. Does the company have any major new projects in mind to replace the Russian assets? And what timescale would the company be looking at to increase production to current levels? Well, I think increasing production to current levels from Kazakhstan asset base is just, I don't know, not on the cards in the next five years. We would need to be actively involved in M&A, and that's just not on the radar screen right now. First order of priority is to sell the Russian business and then to look for bolt-on acquisitions. I think that would be the realistic time. Um... What benefit would there be to the Russian Government in allowing the sales of the company's assets? Well, the benefit would be to shift the ownership into the hands of Russian nationals, from the hands of, shareholders, majority of whom are residents of unfriendly jurisdictions. This is, by the way, another aspect of the Russian business functioning that's pretty tricky, because we are protected by the fact that Polymetal International is listed on Moscow Exchange. But otherwise, the criteria of summing up all of the unfriendly investors may lead the government to conclude that Polymetal Russia continues to be controlled by an unfriendly party. Your report is saying that dual listing post-Russia sale was a real possibility. Is that still the case? I think we definitely will look at this opportunity, and the obvious location would be London. In case the sale of the Russian business is not successful, would we contemplate the spin-off of the Kazakhstan business and the new Kazakhstan assets? That would entail a huge tax hit, but this is something we have looked previously at, and that probably will look if you know our efforts to sell the Russian business fail. Will the board amend the existing dividend policy? I don't know. I think that sale of the Russian business competes. Is the price amongst potential buyers? Consideration depressing the price is definitely capital controls. What is the current share of sales going to Russian market? I think the Russian business now sells the bulk of its gold bullion in Russia, with silver and concentrates mostly going abroad. So I think the Russian market accounts for probably something for like 65% of sales of the Russian business. We don't have a target valuation for Russian asset sale, because a lot will depend on the transaction structure and on the ability to repatriate the proceeds to Kazakhstan. Another consideration, which is very crucial for us, is the sustainability and the certainty of toll processing KAZ Minerals concentrate at POX. This is something that is being given a lot of time during preliminary discussions with potential buyers. I can tell you that it's a very thorny issue because we want maximum guarantees for the arrangement, and that hurts quite a lot of potential buyers. Can you clarify what you mean by material issues in terms of the AIX sale process having to be concluded within nine months? Well, you know, to be blunt with you, we'll just lose a lot of our political capital in Kazakhstan. And our political capital in mining is crucial. I don't want to draw any parallels. I think that would be inappropriate, but still, I would suggest you look at what has happened to ArcelorMittal in Kazakhstan after multiple screw-ups on the safety front. Clearly, we don't want to think about such a scenario, but the magnitude of the potential problems resulting from the loss of political standing is quite obvious from Arcelor situation. All right. Seeing no further questions, I thank you all for active participation in the call. Please feel free to now follow up either with the IR team in London or the IR team in Astana or with the top management. Have a very nice day. Bye-bye.