Indicative Price Range of Offering

IMPORTANT NOTICE: NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION CONTAINED HEREIN IS FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR TO ANY PERSON IN ANY OF THOSE JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by Polyus (as defined below) in due course in connection with the proposed admission of Level I American depositary shares and global depositary shares, in each case representing Polyus' ordinary shares, to the Official List of the UK Listing Authority (the "UKLA") and to trading on the Main Market of the London Stock Exchange plc (the "London Stock Exchange") (together, the "Admission"). A copy of the Prospectus will, following its publication, be available at its registered office and on Polyus' website (www.polyus.com), subject to applicable securities laws.

15 June 2017

Public Joint Stock Company Polyus

("Polyus" or the "Company" and, together with its subsidiaries, the "Group")

Indicative Price Range of Offering on the London Stock Exchange and the Moscow Exchange and Offering Launch

Following its announcement on 5 June 2017 of its intention to conduct an offering on the London Stock Exchange and the Moscow Exchange, Polyus, the 8th largest gold producer globally with the second largest reserve base and the lowest cost position among the top-10 largest gold mining companies globally, today announces the indicative price range for the offering.

The offering will be in the form of ordinary shares of the Company (each, a "Share") (which are traded on the Moscow Exchange under ticker PLZL), which will include an offering by Polyus Gold International Limited and Polyus Gold plc of existing Shares (which are listed on the Moscow Exchange) and Global Depositary Shares representing such Shares ("GDSs"), which will be admitted to trading on the London Stock Exchange (the "Offering").

The Offering base size is expected to comprise approximately between 7% to 9% of the issued share capital of the Company following the Offering, inclusive of $400 million of primary proceeds with the remainder as secondary.

Offering Highlights

· The indicative price range for the Offering has been set at US$33.25 to US$35.30 per GDS, corresponding to a price of US$66.50 to US$70.60 per Share. This will result in a market capitalisation range at the indicative price range of approximately US$8,482 million to US$9,005 million on a pre-money fully-diluted basis (including treasury shares).

· The Offering is expected to comprise a portion of the existing Shares being offered by Polyus Gold International Limited ("PGIL") and by Polyus Gold plc ("Polyus Gold" and together with PGIL the "Selling Shareholders"), a PGIL subsidiary. In addition to the Offering, the Company is also carrying out a pre-emptive offer to its existing shareholders with indications of interest from shareholders other than PGIL.

· The Offering is expected to include an offering of Shares in Russia and an offering of existing Shares and GDSs representing such Shares to institutional investors internationally, outside the US in reliance on Regulation S and within the US to certain qualified institutional buyers in reliance on Rule 144A.

· Additionally, in connection with the Offering, PGIL is expected to loan existing Shares in Polyus to Polyus Gold in order to allow Polyus Gold to sell existing Shares and GDSs in the Offering. Polyus Gold is expected to use all proceeds it receives in the Offering to subscribe for new Shares in the Open Subscription, and Polyus Gold is expected to then deliver the new Shares acquired by it to PGIL.

· In connection with the Offering, the Company expects to issue new Shares to be placed through an open subscription under Russian law (the "Open Subscription"). In addition to the exercise of current shareholders' pre-emptive rights, the Company is expected to offer in the Open Subscription certain new Shares, as part of the US$400 million of aforementioned primary proceeds, through the facilities of the Moscow Exchange to Russian institutional investors and other investors ("MOEX Offer"), and certain new Shares to Polyus Gold.

· The Company intends to use the proceeds from the issuance of new ordinary shares to repay a portion of the Group's outstanding indebtedness; finance the operating activities and development projects of the Group; finance capital expenditure; and for other general corporate purposes of the Group.

· PGIL intends to grant the joint bookrunners an over-allotment option to purchase additional securities representing up to 10 % of the securities sold in the Offering at the offer price to cover over-allotments, if any, in connection with the Offering. 

· Following the Offering, the Company and the Selling Shareholders will be subject to a lock-up in respect of Shares in the Company for a period of 180 days, subject to certain exceptions.

· Polyus intends to apply for the admission of the GDSs and its existing Level I American depositary shares representing the Shares to the Official List of the UK Financial Conduct Authority and to trading on the regulated main market of the London Stock Exchange. The GDSs are expected to be traded under the symbol "PLZL".

Goldman Sachs International, J.P. Morgan, Sberbank CIB and VTB Capital are acting as Joint Global Coordinators and Joint Bookrunners and BMO Capital Markets, Gazprombank and Morgan Stanley are acting as Joint Bookrunners.

The Offering is subject to the receipt of all relevant registrations and regulatory approvals.

Polyus Enquiries: 

Investor Contact

Victor Drozdov, Director Investor Relations

+7 (495) 641 33 77 [email protected] 

Media contact

Victoria Vasilyeva, Director Public Relations

+7 (495) 641 33 77 [email protected] 

Hudson Sandler

Andrew Hayes, Charlie Jack, Emily Dillon

+44 207 796 4133

Important Notice

The information contained in this announcement is for background purposes only and does not purport to be full or complete. It is also subject to change. Before subscribing for or purchasing any Shares or GDSs, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The value of the Shares and GDSs and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. The price and value of securities can go down as well as up, and investors may get back less than they invested or nothing at all. Potential investors should consult an independent financial advisor as to the suitability of the securities referred to in this advertisement for the person concerned.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions), Canada, Australia, Japan, South Africa or to any person in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The offer of Shares and GDSs pursuant to the Offering and the distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement or any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Canada, Australia, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities to which this announcement relates have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States or to U.S. persons unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. There will be no public offer of the securities in the United States. The securities referred to herein have not been registered under the applicable securities laws of Canada, Australia, Japan or South Africa and, subject to certain exceptions, may not be offered or sold within Canada, Australia, Japan or South Africa or to any national, resident or citizen of Canada, Australia, Japan or South Africa.

In any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") other than the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive ("Qualified Investors").

This announcement is only addressed to and directed at qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC as amended, including by Directive 2010/73/EC) ("Qualified Investors") in the United Kingdom who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) are persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

This announcement is not, and under no circumstances is to be construed as, a public offer or advertising or an invitation to make offers to sell, purchase, exchange or otherwise transfer or dispose of any securities, including securities of foreign issuers, or other financial instruments in the Russian Federation within the meaning of Russian securities laws or to or for the benefit of any persons or entities resident, incorporated, established or having their usual residence in the Russian Federation, or to or for the benefit of any person located within the territory of the Russian Federation, who, in respect of depositary shares, is not a "qualified investor" within the meaning of Article 51.2 of the Russian Federal Law "On the Securities Market" No. 39-FZ dated 22 April 1996, as amended, and must not be distributed or circulated into the Russian Federation or made available in the Russian Federation, to any persons who are not qualified investors, unless and to the extent the recipients are otherwise permitted to access such information under Russian law. The depositary shares referred to in this announcement have not been registered in Russia or admitted to placement and/or public circulation in the Russian Federation and the information contained in this announcement is not to be made publicly available in the Russian Federation or passed on to third parties in the Russian Federation, unless otherwise permitted under Russian law. The securities are not intended for "offering", "placement" or "circulation" (each as defined in Russian securities laws) in the Russian Federation, except as permitted by Russian law.

The timetable, including the publication of the Prospectus and the date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Offering will proceed and that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to the Offering and Admission at this stage. This announcement does not constitute a recommendation concerning the Offering.

Goldman Sachs International, J.P. Morgan Securities plc, VTB Capital plc, Morgan Stanley & Co. International plc and BMO Capital Markets Limited are each authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, JSC Sberbank CIB is authorised and regulated by the Central Bank of Russia, SIB (Cyprus) Limited is authorised and regulated by the Cyprus Securities and Exchange Commission and Bank GPB International S.A. is authorised and regulated by the Commission de Surveillance du Secteur Financier of Luxembourg (each a "Manager" and collectively the "Managers").

The Managers are acting exclusively for the Company and no one else in connection with the Offering and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to its client nor for providing advice in relation to the proposed Offering.

In connection with the Offering, each of the Managers or any of their respective affiliates, acting as investors for their own account(s), may subscribe for or purchase Shares and GDSs and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their own accounts in such Shares and GDSs and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Prospectus, once published, to the Shares and GDSs being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, each of the Managers or any of their respective affiliates acting as an investor for its or their own account(s). None of the Managers or any of their respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Managers or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever, or makes any representation or warranty, express or implied, for the contents of this announcement, including its truth, accuracy, completeness, verification or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Selling Shareholders, the Company and each of their respective subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, a stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, effect transactions with a view to supporting the market price of the Shares and GDSs at a higher level than that which might otherwise prevail in the open market. The stabilising manager will not be required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the announcement of the Offer Price and ending no later than 30 calendar days thereafter. However, there will be no obligation on the stabilising manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares and GDSs above the offer price. Save as required by law or regulation, neither the stabilising manager nor any of its agents intends to disclose the stabilisation transactions conducted in relation to the Offering.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. All information presented or contained in this announcement is subject to verification, correction, completion and change without notice. However, the Company does not undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies.

Forward-looking statements

Certain statements contained in this announcement, including any information as to the Company's strategy, plans or future financial or operating performance constitute "forward looking statements". These forward-looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors of the Company concerning, amongst other things, the Company's results of operations, financial condition and performance, prospects, growth and strategies and the industry in which the Company operates.

By their nature, forward looking statements address matters that involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance and the Company's actual results of operations and financial condition, and the development of the business sector in which the Company operates, may differ materially from those suggested by the forward looking statements contained in this announcement.

In addition, even if the Company's results of operations and financial condition, and the development of the industry in which the Company operates, are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

The forward-looking statements contained in this announcement speak only as of the date of this announcement. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward- looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law.