“We will need a hell of a lot of capital to achieve our vision, and at the same time we will need to retire a significant amount of debt which is currently sitting on our balance sheet,” CEO Vitaly Nesis said.
The company may also look to enter new markets in Saudi Arabia and Oman. CFO Maxim Nazimok told Reuters there were two or three M&A deals in the pipeline in Kazakhstan and neighbouring jurisdictions.
Seeking to distance itself from its Russian ties, Polymetal International announced last month it was rebranding to Solidcore Resources, having experienced know-your-client issues with banks, data providers and suppliers despite not being subject to sanctions.
Polymetal said its aim to produce 1 million ounces of gold equivalent by 2029 would require “significant additional investment in exploration, M&A and development of new assets”.
It plans to invest $800 million into its Ertis POX project in Kazakhstan, with production set to begin in the first half of 2028. Only then will the company be able to resume dividend payments.
Nesis said building the POX project was the only way to put the company on a solid footing and fully sever ties with Russia. The company has U.S. approval to maintain a tolling arrangement with a POX facility in Russia.
“We will need to go through the pain of not paying a dividend, to reestablish the company into a state that makes it a bona-fide, investable mining company,” Nesis said. “I think there is no other way.”
Overall capital expenditure of $1.23 billion is planned from 2025-29, excluding M&A, the company said. Steady annual production levels are projected for that period at existing projects, ranging from 468,000 to 520,000 ounces of gold equivalent.
Listing conundrums
Currently 11% of the group’s outstanding share capital remains blocked within Russia’s National Settlement Depository (NSD), which is under sanctions, and with other Russian custodians.
Nazimok called for shareholders to “wake up to the problem” and start participating in an offer to exchange blocked Moscow-listed shares for those in Astana, despite low liquidity in Kazakhstan.
The group is thinking about how to ultimately “get rid of the NSD as a problem”, Nazimok said. “The resumption of dividends, to a certain extent, is also dependent on resolving that problem.”
Nesis said the company was not yet ready to pursue a relisting in London, either in terms of investor appeal or potential compliance issues.
“The realistic timeline is probably 2026 at the earliest, when we will be able to demonstrate that progress at the POX project is sufficient to meet our goal of all independence from Russia by 2028.”
(Reporting by Anastasia Lyrchikova in Moscow and Alexander Marrow in London; Editing by Louise Heavens, David Goodman and Jan Harvey)
