Polymetal International plc (POLY)
Polymetal: Report on payments to governments for the year 2020
30-Jun-2021 / 13:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 30 June 2021 Polymetal International plc
Report on payments to governments for the year 2020
Polymetal issues the report on payments to government for the
year ended 31 December 2020.
INTRODUCTION
This Report provides an overview of the payments to governments
made by Polymetal International plc and its subsidiary undertakings
(hereinafter referred to as "Polymetal") for the year 2020 as
required under the UK's Report on Payments to Governments
Regulations 2014 (as amended in December 2015). These UK
Regulations enact domestic rules in line with Directive 2013/34/EU
(the EU Accounting Directive (2013)) and apply to large extractive
companies, whose securities are publicly listed on a UK-regulated
stock market, that are involved in the exploration, prospection,
discovery, development and extraction of minerals, oil, natural gas
deposits or other materials. This Report is also intended to
satisfy the requirements of the Disclosure and Transparency Rules
of the Financial Conduct Authority in the United Kingdom.
BASIS OF PREPARATION
Legislation
This report is prepared in accordance with The Reports on
Payments to Governments Regulations 2014 as enacted in the UK in
December 2014 and as amended in December 2015.
Reporting entities
This Report includes payments to governments made by Polymetal.
Payments made by entities over which Polymetal has joint control or
significant influence are excluded from this Report.
Activities
Payments made by Polymetal to governments arising from
activities involving the exploration, prospection, discovery,
development and extraction of minerals are disclosed in this
Report. It excludes payments related to refining activities made to
the refineries owned by the government agencies and any payments
which are not directly attributable to the production and
exploration activities.
Government
Government includes any national, regional or local authority of
a country, and includes a department, agency or entity that is a
subsidiary of a government.
Project
Payments are reported at project level except that payments that
are not attributable to a specific project are reported at legal
entity level. Project is defined as operational activities which
are governed by a single contract, or licence agreement, and form
the basis for payment liabilities with a government. If such
agreements are substantially interconnected, those agreements are
to be treated as a single project.
"Substantially interconnected" means forming a set of
operationally and geographically integrated contracts, or licence
agreements that are signed with a government giving rise to payment
liabilities. Indicators of integration include, but are not limited
to, geographic proximity, the use of shared infrastructure and
common operational management.
License agreements are aggregated for the purposes of reporting
as a single project only when those legal agreements have
substantially similar terms and are both geographically and
operationally integrated.
Payments
The information is reported under the following payment
types:
Income taxes
These are taxes paid by Polymetal on its income and/or profits
in accordance with legislation enacted in the applicable
jurisdiction. Payments are reported net of refunds. Value added
tax, personal income taxes, social taxes, property taxes are
excluded.
The maximum income tax in Russia is set at a rate of 20% and is
allocated between federal budget and the budgets of the relevant
constituent regions. In 2020 and 2019 the following proportion was
applied: 3% allocated to the federal budget, whereas 17% allocated
to the regional budgets. From 1 January 2017 Omolon Gold Mining
Company LLC and Magadan Silver JSC are entitled to the decreased
statutory income tax rate of 17% for the operations held in the
Special Economic Zone of the Russian Far East, as well as decreased
mining tax rate (paying at 60% of the standard mining tax rates).
In return for obtaining this tax relief the members of the regional
Special Economic Zone are obliged to invest 50% of their tax
savings each year in the Special Economic Zone Development Program.
From 1 January 2017 Svetloye LLC is subject to tax relief as a
participant in a Regional Investment Project and is entitled to the
statutory income tax rate of 0% up to 2021 and 10% from 2022 to
2026, as well as decreased mining tax rates.
In Kazakhstan income tax is set at a rate of 20% and there is no
allocation for regional or local income taxes in this country.
Mining tax
Mining tax is a royalty payable in Russian Federation and
Kazakhstan, which is calculated based on the value of the precious
metals extracted in the period. In Russia this value is usually
determined based on the realised selling price of precious metals
or, in case if there were no sales during the period, cost of
production of metals extracted. In Kazakhstan the value is
determined based on the market price whether or not there were
sales during the period.
Mining tax in Russia is levied at federal level, and then is
reallocated between federal and respective regional budgets based
on the following proportion: 40% of total tax collected is
transferred to the federal budget, 60% to regional budgets. Mining
tax and royalties in Kazakhstan are levied at republican level.
Licence fees
These are fees and other sums paid as consideration for
acquiring a licence for gaining access to an area where extractive
activities are performed. Administrative government fees that are
not specifically related to the extractive sector, or to access to
extractive resources, are excluded.
Rental fees
The land in the Russian Federation and Kazakhstan on which the
Group's production facilities are located is owned by the state.
The Group leases this land through operating lease agreements.
Other payments
Other payments include payments made and social commitments in
accordance with subsoil contracts attributable to the Kyzyl project
and investment in the Special Economic Zone Development Program of
Omolon Gold Mining Company LLC and Magadan Silver JSC.
Cash and in-kind payments
Payments are reported on cash basis. No in-kind payments were
made during years ended 31 December 2020 and 31 December 2019.
Materiality Level
Any payment, whether made as a single payment or as a series of
related payments, below GBP 86,000 within a financial year is
excluded from this Report.
Payments made to governments by joint ventures or associates of
the Group in proportion to the company's interest in the respective
venture or associate are insignificant to this Report based on
materiality level set.
Exchange Rate
Relevant payments are made by Polymetal in Russian Rubles and
Kazakh Tenge and for the purpose of this Report are translated to
the US Dollar based on the foreign exchange rate at the relevant
monthly average rate.
PAYMENTS PER GOVERNMENT
FOR THE YEAR 2020
Government Mining Rental
Income tax Licence fees Other Total
000'USD tax fees
Russia 158,843 86,066 2,588 1,220 12,6681 261,385
Kazakhstan 87,813 39,241 - 3,668 8,7712 139,493
Total 246,656 125,307 2,588 4,888 21,439 400,878
PAYMENTS PER
PROJECT
Entity Country/ Mining Rental
Project Government Region Income tax Licence fees Other Total
000'USD tax fees
Gold of Northern Urals Voro Russia Svedlovskaya 27,298 10,016
CJSC oblast' - - 497 37,811
Svetloye LLC Svetloye Russia Khabarovskiy - 2,504 354 592 - 3,450
Kray
Magadan Silver JSC Dukat Russia Magadanskaya 38,962 16,995 628 7,1761
oblast' 665 64,426
Mayskoye Gold Mining Chukotka
Company LLC Mayskoye Russia Autonomous 13,975 17,288 - - - 31,263
Okrug
Omolon Gold Mining Omolon Russia Magadanskaya 41,148 13,427 4,7941
Company LLC oblast' 262 - 59,631
Albazino Resources Ltd Albazino Russia Khabarovskiy 36,239 23,980
Kray 703 - 201 61,123
GRK Amikan LLC Veduga Russia Krasnoyarskiy 1,221 1,856
Kray 285 - - 3,362
South-Verkhoyansk Mining Nezhda Russia Yakutia
Company JSC - - 319 - - 319
Varvarinskoye JSC Varvara Kazakhstan n/a 28,707 - - - 605 29,312
Komarovskoye Mining Komar Kazakhstan n/a 3,811 9,845 - - 1,169 14,825
Company LLC
Bakyrchik Mining Venture Kyzyl Kazakhstan n/a 55,177 29,396 - 3,668 6,9972 95,238
LLC
Inter Gold Capital LLC Kazakhstan n/a 118 - - - - 118
Total 246,656 125,307 2,588 4,888 21,439 400,878
______________________
1 Includes payments under Special Economic Zone Development
Program of USD4,492 thousand for Omolon Gold Mining Company LLC and
USD6,465 thousand for Magadan Silver JSC.
2 In accordance with a memorandum with East-Kazakhstan Oblast
Administration (local Kazakhstan government) Polymetal participates
in financing of certain social and infrastructure development
project of the region. During the year ended 31 December 2020
Polymetal paid USD4,576 thousand under this programme.
PAYMENTS PER GOVERNMENT
FOR THE YEAR 2019
Government Mining Rental
Income tax Licence fees Other Total
000'USD tax fees
Russia 84,619 70,396 2,553 - 12,0341 169,602
Kazakhstan 19,054 45,326 - - 7,9912 72,371
Total 103,673 115,722 2,553 - 20,025 241,973
PAYMENTS PER
PROJECT
Entity Country/ Mining Rental
Project Government Region Income tax Licence fees Other Total
000'USD tax fees
Gold of Northern Urals Voro Russia Svedlovskaya 26,568
CJSC oblast' 9,101 - - - 35,669
Svetloye LLC Svetloye Russia Khabarovskiy - 2,189 348 - - 2,537
Kray
Magadan Silver JSC Dukat Russia Magadanskaya 27,962 7,9701
oblast' 15,881 747 - 52,560
Mayskoye Gold Mining Chukotka
Company LLC Mayskoye Russia Autonomous - 12,380 - - - 12,380
Okrug
Omolon Gold Mining Omolon Russia Magadanskaya 11,390 3,8251
Company LLC oblast' 10,450 319 - 25,984
Albazino Resources Ltd Albazino Russia Khabarovskiy 16,007
Kray 18,940 608 - 239 35,794
GRK Amikan LLC Veduga Russia Krasnoyarskiy 2,692
Kray 1,455 265 - - 4,412
South-Verkhoyansk Mining Nezhda Russia Yakutia - - 266 - - 266
Company JSC
Varvarinskoye JSC Varvara Kazakhstan n/a 15,528 3,791 - - 556 19,875
Komarovskoye Mining Komar Kazakhstan n/a 3,076
Company LLC 7,483 - - - 10,559
Bakyrchik Mining Venture Kyzyl Kazakhstan n/a 450 34,052 - - 7,4352 41,937
LLC
Total 103,673 115,722 2,553 - 20,025 241,973
______________________
1 Includes payments under Special Economic Zone Development
Program of USD3,522 thousand for Omolon Gold Mining Company LLC and
USD7,945 thousand for Magadan Silver JSC.
2 In accordance with a memorandum with East-Kazakhstan Oblast
Administration (local Kazakhstan government) Polymetal participates
in financing of certain social and infrastructure development
project of the region. During the year ended 31 December 2019
Polymetal paid USD5,000 thousand under this programme. About
Polymetal
Polymetal International plc (together with its subsidiaries -
"Polymetal", the "Company", or the "Group") is a top-10 global gold
producer and top-5 global silver producer with assets in Russia and
Kazakhstan. The Company combines strong growth with a robust
dividend yield.
Enquiries
Media Investor Relations
Polymetal ir@polymetalinternational.com
FTI Consulting
Evgeny Monakhov +44 20 7887 1475 (UK)
Leonid Fink +44 20 3727 1000
Timofey Kulakov
Viktor Pomichal
Kirill Kuznetsov +7 812 334 3666 (Russia)
Joint Corporate Brokers
Morgan Stanley & Co. International plc +44 20 7425 8000
Andrew Foster
RBC Europe Limited
Richard Brown
Marcus Jackson +44 20 7653 4000
Panmure Gordon Jamil Miah
Daniel Norman
+44 20 7886 2500
John Prior
Forward-looking statements
This release may include statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements speak only as at the date of this release. These
forward-looking statements can be identified by the use of
forward-looking terminology, including the words "targets",
"believes", "expects", "aims", "intends", "will", "may",
"anticipates", "would", "could" or "should" or similar expressions
or, in each case their negative or other variations or by
discussion of strategies, plans, objectives, goals, future events
or intentions. These forward-looking statements all include matters
that are not historical facts. By their nature, such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the company's
control that could cause the actual results, performance or
achievements of the company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the company's present and
future business strategies and the environment in which the company
will operate in the future. Forward-looking statements are not
guarantees of future performance. There are many factors that could
cause the company's actual results, performance or achievements to
differ materially from those expressed in such forward-looking
statements. The company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained herein to reflect any change
in the company's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statements
are based.
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ISIN: JE00B6T5S470
Category Code: PGR
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
Sequence No.: 114630
EQS News ID: 1213811
End of Announcement EQS News Service
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