Polyus Gold International Limited Consent

Polyus Gold International Limited (“PGIL” or the “Issuer“), the largest gold producer in Russia, today formally announces a proposal to make certain modifications to the terms and conditions of the U.S.$750,000,000 5.625 per cent. notes due 2020 (the “Notes“) (of which U.S.$750,000,000 is currently outstanding) (Regulation S Global Note ISIN: XS0922301717; Regulation S Global Note Common Code: 092230171; Rule 144A Global Note ISIN: US73180YAA29; Rule 144A Global Note Common Code: 092311686; Rule 144A Global Note CUSIP: 73180Y AA2) issued by the Issuer and unconditionally and irrevocably guaranteed by Joint Stock Company Gold-Mining Company Polyus (the “Guarantor“) by way of consent solicitation (the “Consent Solicitation“) as set out in a consent solicitation memorandum dated 27 March 2017 (the “Consent Solicitation Memorandum“). Copies of the Consent Solicitation Memorandum will be available on the Consent Website.

The Issuer (with the agreement of the Guarantor) is seeking approval by way of an extraordinary resolution (the “Extraordinary Resolution“) of the holders of the Notes to make certain modifications to its existing covenants (“Existing Covenants“).

Following the delisting of PGIL’s shares from the London Stock Exchange in 2015 and the positioning of PJSC Polyus as the holding and reporting company of the Group, PGIL is considering its substitution as Issuer under the Notes. Accordingly, PGIL wishes to amend the Conditions (1) to permit a transfer of all of the Issuer’s rights and obligations under the Notes and the Trust Deed to a new issuer as is permitted under the terms of the Issuer’s US$500 million 4.699 per cent guaranteed notes due 2022 (the “2022 Notes”) and US$800 million 5.250 per cent guaranteed notes due 2023 (the “2023 Notes” and, together with the 2022 Notes, the “Existing Notes”), and (2) to align the circumstances in which a guarantee of the Issuer’s obligations under the Notes may be provided by PJSC Polyus with the circumstances contemplated by the Existing Notes. The Conditions currently permit the Issuer to procure a further guarantee (a “Further Guarantee”) from the parent company of the Group, the issuance of which is at the discretion of such parent company, and require such guarantee to be issued in certain limited circumstances. Pursuant to the Proposals PJSC Polyus, the parent company of the Group, would be expected to provide a Further Guarantee within 180 days from the date of the Noteholders’ Meeting and, if a Further Guarantee is not provided prior to the expiry of such term, the Noteholders will have a right to cause the redemption or, at the Issuer’s discretion, the purchase of their Notes at 101 per cent of the value of the Notes.‎

Accordingly, the Issuer is seeking amendments with respect to, among others (i) Condition 4.3 (Merger and Consolidation) to provide the flexibility for a potential substitution of the Issuer, which is currently the parent company of PJSC Polyus and JSC Polyus, for a New Issuer, incorporated in any of the United Kingdom, the Republic of Cyprus, Ireland, Jersey, Luxembourg or The Netherlands, on the terms set out in Condition 4.3.2(i), (ii) further amendments to the Conditions to ensure that, after the transfer of the Issuer’s rights and obligations under the Notes to the New Issuer, the financial covenants of the Notes apply to PJSC Polyus (as the holding company and reporting entity of the Group) and its Subsidiaries (or Material Subsidiaries, as applicable) and (iii) adding a new Condition 6.5 (Redemption at the option of Noteholders) to allow the Noteholders to exercise a right to cause the redemption or, at the Issuer’s discretion, the purchase of their Notes at 101 per cent of the value of the Notes if PJSC Polyus does not issue a Further Guarantee within 180 days after the date of the Noteholders Meeting.

The Issuer is not in breach of any of the Existing Covenants, whether in respect of which the approval is being sought, or otherwise.

No decisions have been taken with regard to any transaction which would be permitted by the proposed amendments to the Existing Covenants.

The Issuer has solicited holders of the Notes to consider the proposals upon the terms and conditions set out in the Consent Solicitation Memorandum.

All capitalised but undefined terms used in this announcement shall have the meaning given to them in the Consent Solicitation Memorandum.

Holders of the Notes who deliver Consent Instructions or Forms of Sub-Proxy in favour of the Extraordinary Resolution (i) on or prior to the Early Consent Deadline, and do not revoke such instructions, shall be eligible to receive an amount of U.S.$2.50 per U.S.$1,000 in principal amount of the Notes which are the subject of such instructions (the “Early Consent Fee“) and (ii) after the Early Consent Deadline but on or prior to the Expiration Time, and do not revoke such instructions, shall be eligible to receive an amount of U.S.$1.50 per U.S.$1,000 in principal amount of the Notes which are the subject of such instructions (the “Late Consent Fee“), subject to the Extraordinary Resolution being duly passed.

An indicative timetable is set out below.

Indicative Timetable

Launch Date 27 March 2017
Record Date (for Noteholders holding through DTC) 10 April 2017
Early Consent Deadline 4:00 p.m. (London time), 11 April 2017
Expiration Time

Noteholders Meeting

4:00 p.m. (London time), 18 April 2017

4:00 p.m. (London time), 20 April 2017

Announcement of results 21 April 2017 (or as soon as reasonably practicable after the Noteholders Meeting)
Payment Date Expected to be no later than five Business Days following the announcement of the results of the Meeting

All references are to London time unless specified otherwise.

Noteholders are advised to check with the bank, securities broker, Clearing System or other intermediary through which they hold their Notes as to whether such intermediary applies different deadlines for any of the events specified above, and then to adhere to such deadlines if such deadlines are prior to the deadlines set out above.

All of the above dates are subject to earlier deadlines that may be specified by the Clearing Systems or any intermediary.

Holders of the Notes are advised to read carefully the Consent Solicitation Memorandum for full details of and information on the procedures for participating in the Consent Solicitation, including details of the fees referred to above. J.P. Morgan Securities plc, JSC “Sberbank CIB” and SIB (Cyprus) Limited are acting as Solicitation Agents and D.F. King is acting as the Information and Tabulation Agent.

Noteholders with any questions on the Consent Solicitation may contact the Solicitation Agents for further information:

The Solicitation Agents

J.P. Morgan Securities plc

25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom

Telephone: +44 20 7134 2468
Email: em_europe_lm@jpmorgan.com
Attention: Liability Management

JSC “Sberbank CIB”

Bld. 2, 4 Romanov Pereulok
Moscow 125009
Russian Federation

Telephone: +7 495 787 2363
Email: liability_management@sberbank-cib.ru

SIB (Cyprus) Limited

Alpha Business Center, 1st Floor, Block B
27 Pindarou Street, CY-1060
Nicosia
Cyprus

Telephone: +357 22 419000
Attention: Directors

Requests by holders of Notes for copies of the Consent Solicitation Memorandum should be directed to:

The Information and Tabulation Agent

D.F. King

In London:

125 Wood Street
London EC2V 7AN
United Kingdom
By telephone: +44 20 7920 9700

In New York:

48 Wall Street, 21st Floor
New York, New York 10005
United States
By telephone: +1 212 269 5550
U.S. Toll Free Number: (866) 829-0541

Email: polyus@dfkingltd.com

All requests for information in relation to voting procedures should be directed to the Information and Tabulation Agent.

This release does not constitute an invitation to participate in the Consent Solicitation.

No offer or invitation to issue or redeem any securities is being made pursuant to this release. This release must be read in conjunction with the Consent Solicitation Memorandum.

This release and the Consent Solicitation Memorandum contain important information which should be read carefully before any decision is made in relation to the Consent Solicitation. If a holder of Notes (a “Noteholder“) is in any doubt as to the action they should take, they are recommended to seek their own financial advice, including in respect of any tax consequences, immediately from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any person whose Notes are held on its behalf by a broker, dealer, bank, custodian trust company or other nominee must contact such entity if they wish to participate in the Consent Solicitation. None of the Issuer, the Guarantor, J.P. Morgan Securities plc, JSC “Sberbank CIB” and SIB (Cyprus) Limited or D.F. King (nor any person related to such entity) makes any recommendation as to whether or not Noteholders should participate in the Consent Solicitation and will not be responsible for giving advice or other investment services to any Noteholder in relation to the Consent Solicitation.

The distribution of the Consent Solicitation Memorandum and this release in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by the Issuer, the Guarantor, the J.P. Morgan Securities plc, JSC “Sberbank CIB” and SIB (Cyprus) Limited and D.F. King to inform themselves about, and to observe, any such restrictions.

In accordance with normal practice, BNY Mellon Corporate Trustee Services Limited as trustee for the Noteholders (the “Trustee”), J.P. Morgan Securities plc, JSC “Sberbank CIB” and SIB (Cyprus) Limited and D.F. King express no views or opinion on the merits or otherwise of the Consent Solicitation, the Proposals, the Invitation or the Extraordinary Resolution. The Trustee has authorised it to be stated that it has no objections to the Extraordinary Resolution being submitted to Noteholders for their consideration. The Trustee has not been involved in negotiating or formulating the terms of the Consent Solicitation, the Proposals or the Extraordinary Resolution. Neither the Trustee nor J.P. Morgan Securities plc nor JSC “Sberbank CIB” nor SIB (Cyprus) Limited nor D.F. King make(s) any representation that all relevant information has been disclosed to the Noteholders in, or pursuant to, the Consent Solicitation Memorandum and/or the Notice of Meeting, nor do they accept any responsibility for the accuracy, completeness, validity or correctness of the statements made in the Consent Solicitation Memorandum, the Notice of Meeting or any other document prepared in connection with the Consent Solicitation or any omissions therefrom. The Noteholders should seek their own independent financial, legal and tax advice on the merits and on the consequences of the Consent Solicitation, the Proposals, the Invitation or the Extraordinary Resolution.

This document does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or a solicitation of any offer to buy or exchange or subscribe for, any securities of the Issuer, the Guarantor or any other entity. This document does not constitute a solicitation in any circumstances in which such solicitation is unlawful.

POLYUS GOLD INTERNATIONAL LIMITED is a company incorporated with limited liability under the laws of Jersey whose registered office is at Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES, and whose principal office is at Ergon House, Dean Bradley Street, London SW1P 2AL, United Kingdom.

This release may contain “forward-looking statements” concerning PGIL. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “continue”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of PGIL’s operations. Many of these risks and uncertainties relate to factors that are beyond PGIL’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this release. PGIL assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.