vk.com/id446425943

Gold Fields – SELL

Renaissance Capital

14 January 2019

Metals & Mining

Figure 104: Gold Fields, $mn (unless otherwise stated)

Gold Fields	GFIJ.J	Target price, ZAR:	43
Market capitalisation, $mn:	2,982	Share price, ZAR:	51
Enterprise value, $mn:	4,412	Potential 12-month return:	-11.6%

Dec-YE			2016	2017	2018E	2019E	2020E
Income statement
Revenue			2,749	2,811	2,552	2,988	3,051
EBITDA			1,361	1,407	1,274	1,622	1,570
EBIT			690	635	574	817	695
Other items			-247	-251	-257	-241	-231
Net interest			-51	-31	-4	-88	-84
Taxation			-192	-172	81	-175	-143
Minority interest in profit			11	11	-3	-19	-18
Net profit for the year			185	-13	-294	319	241
Headline earnings			208	194	139	319	241
Headline EPS, USc			26	24	16	40	29
Thomson Reuters consensus HEPS, USc					11	19	22
DPS declared, USc			8	7	4	13	10
Underlying EBIT			15	-25	-58	33	24
South Africa Region
EBIT margin			4%	-7%	-28%	10%	7%
West Africa Region			227	221	204	263	245
EBIT margin			25%	25%	23%	26%	24%
South America Region			67	108	97	89	58
EBIT margin			21%	27%	27%	23%	19%
Australia Region			382	332	331	432	368
EBIT margin			32%	28%	30%	34%	27%
Adjusted EBIT			690	635	574	817	695
Income statement ratios
EBITDA margin			49%	50%	50%	54%	51%
EBIT margin			25%	23%	22%	27%	23%
HEPS Growth			750%	-8%	-33%	150%	-28%
Dividend payout ratio			29%	28%	26%	33%	33%
Input assumptions
Gold, $/oz			1,248	1,258	1,269	1,350	1,338
Copper, $/t			4,867	6,170	6,532	6,000	6,367
ZAR/$			14.70	13.31	13.24	14.31	14.14
AUD/$			1.34	1.30	1.34	1.38	1.28
PEN/$			3.38	3.26	3.29	3.40	3.32
Gold production volumes, koz
South Africa		lumes	290	281	155	244	268
West Africa	lumes		644	639	673	790	808
South America		lumes	270	307	302	307	252
Australia	lumes		942	935	865	934	1,010
Total lumes			2,147	2,162	1,995	2,276	2,338
Volume growth			-0.6%	0.7%	-7.7%	14.0%	2.7%
Calculated breakeven price, $/oz
South Africa breakeven			1,192	1,342	1,763	1,126	1,155
West Africa breakeven			939	885	852	870	886
South America breakeven			715	611	777	862	907
Australia breakeven			886	902	857	814	892
Group breakeven			1,028	1,012	1,025	968	1,012

Contribution to FY18E underlying EBITDA

South Africa

-1%

West Africa

Australia 36%

49%

South America

14%

Dec-YE		2016	2017		2018E	2019E	2020E
Balance sheet
Net operating assets		4,449	4,711		4,461	4,342	4,159
Investments, net of rehab provision		-93	-6		-2	-2	-2
Equity		3,067	3,276		2,811	3,103	3,281
Minority interest		123	127		126	130	133
Net debt		1,166	1,303		1,523	1,107	744
Balance sheet ratios
Gearing (net debt/(net debt+equity))		27.5%	28.4%		35.1%	26.3%	18.5%
Net debt to EBITDA		0.9x	0.9x		1.2x	0.7x	0.5x
RoCE		14.4%	12.7%		11.7%	17.7%	15.5%
RoIC (after tax)		11.0%	9.7%		12.1%	13.3%	11.7%
RoE		7.1%	6.1%		4.6%	10.8%	7.6%
Cash flow statement
Operating cash flow		1,332	1,150		1,239	1,417	1,429
Capex (net of disposals)		-649	-834		-799	-638	-698
Other cash flows		-492	-237		-602	-217	-186
Free cash flow		191	79		-162	563	545
Equity shareholders' cash		113	-36		-173	486	472
Dividends and share buy-backs		101	-100		-48	-70	-108
Surplus (deficit) cash		214	-136		-220	416	364
Cash flow ratios		-23	-8		-2	-1	-4
Working capital turnover, days
FCF yield		4.0%	1.7%		-3.6%	13.3%	14.1%
Equity shareholders' yield		3.2%	-1.2%		-6.1%	16.2%	15.7%
Capex/EBITDA		47.7%	59.3%		62.7%	39.3%	44.5%
Cash conversion		0.5x	-0.2x		-1.2x	1.5x	2.0x
Valuation
SoTP DCF fair value and calculation of target price						$mn	ZAR/sh
South Africa Region						587	10.2
West Africa Region						1,983	34.6
South America Region						927	16.2
Australia Region						2,364	41.2
Other						-1,953	-34.0
Operating value						3,908	68.1
Financial instruments and rehab provision as at 31 December 2017						-6	-0.1
Enterprise value						3,902	68.0
Net debt as at 31 December 2017						-1,303	-22.7
Minority interest						-127	-2.2
Cash used in share buy-backs during 2018E						0	0.0
Equity value						2,472	43.1
Rounded to							43.0
Share price on 7/1/2019							50.7
Expected share price return							-15.1%
Plus: expected dividend yield							3.5%
Total implied one-year return							-11.6%
Share price range, ZAR:
12-month high on 15-1-2018		56	12-month low on 11-9-2018				33
Price move since high		-10.3% Price move since low					54.0%
Calculation of WACC
WACC		7.4%	Cost of debt				5.0%
Risk-free rate		4.0%	Tax rate				30%
Equity risk premium		5.0% After-tax cost of debt					1.1%
Beta		1.00	Debt weighting				30%
Cost of equity		9.0%	Terminal growth rate				2.0%
Valuation ratios
Dec-YE, $mn		2016	2017		2018E	2019E	2020E
P/E multiple		16.5x	15.8x		21.4x	9.1x	12.6x
Dividend yield		1.8%	1.8%		1.2%	3.6%	2.6%
EV/EBITDA		3.5x	3.2x		3.5x	2.6x	2.5x
P/B		1.1x	0.9x		1.0x	1.0x	0.9x
NAV per share, $		3.7	4.0		3.4	3.8	4.0
NAV per share, ZAR		55	53		45	54	57

Source: Bloomberg, Thomson Reuters, Renaissance Capital estimates

69

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Harmony Gold – SELL

Renaissance Capital

14 January 2019

Metals & Mining

Figure 105: Harmony Gold, ZARmn (unless otherwise stated)
Harmony					HARJ.J						Target price, ZAR:				21
Market capitalisation, ZARmn:					13,893						Share price, ZAR:				27
Enterprise value, ZARmn:					18,801						Potential 12-month return:				-18.9%
Jun-YE				2017	2018	2019E	2020E	2021E		Jun-YE	2017	2018	2019E	2020E	2021E
Income statement										Balance sheet
Revenue				19,264	20,358	26,675	27,616	25,701		Net operating assets	28,225	29,794	31,772	32,825	33,118
Underlying EBITDA				4,452	5,356	8,641	9,646	7,543		Investments, net of rehab provision	1,953	496	496	496	496
Underlying EBIT				1,933	2,786	5,618	6,667	4,571		Equity	29,291	25,382	28,286	31,493	33,436
Other items				-2,292	-6,862	-1,271	-1,383	-1,363		Minority interest	0	0	0	0	0
Net interest				233	-669	-468	-335	-147		Net debt	887	4,908	3,982	1,827	178
Taxation				510	234	-1,018	-1,443	-918
Net profit for the year				362	-4,473	2,861	3,506	2,143		Balance sheet ratios
Headline earnings				1,306	763	2,861	3,506	2,143		Gearing (net debt/(net debt+equity))	2.9%	16.2%	12.3%	5.5%	0.5%
Headline EPS, ZAR				2.98	1.71	5.72	7.01	4.28		Net debt to EBITDA	0.2x	0.9x	0.5x	0.2x	0.0x
										RoCE	6.3%	8.9%	17.0%	19.2%	12.8%
Thomson Reuters consensus HEPS, ZAR						3.06	3.87	2.97		RoIC (after tax)	8.8%	7.3%	14.3%	15.5%	10.5%
DPS declared, ZAR				0.85	0.35	0.82	1.05	0.65		RoE	4.5%	2.8%	10.7%	11.7%	6.6%
Production EBIT										Cash flow statement
South Africa underground				1,768	2,432	3,585	4,866	2,995		Operating cash flow	5,224	4,811	7,637	8,382	6,803
EBIT margin				11%	14%	18%	22%	15%		Capex (net of disposals)	-3,887	-4,571	-5,146	-4,304	-3,485
South Africa Surface				174	235	284	347	200		Other cash flows	317	-5,930	-1,053	-1,165	-1,144
EBIT margin				10%	12%	13%	18%	11%		Free cash flow	1,654	-5,690	1,438	2,913	2,174
Hidden Valley				-9	119	1,288	1,442	1,377		Equity shareholders' cash	635	-4,714	1,101	2,671	2,068
EBIT margin				-1%	29%	35%	41%	41%		Dividends and share buy-backs	-439	693	-175	-516	-419
Group production EBIT				1,933	2,786	5,618	6,667	4,571		Surplus (deficit) cash	196	-4,021	926	2,155	1,649
Income statement ratios										Cash flow ratios
EBITDA margin				23%	26%	32%	35%	29%		Working capital turnover, days	3	4	5	4	3
EBIT margin				10%	14%	21%	24%	18%		FCF yield	9.3%	-34.1%	8.2%	19.0%	15.9%
HEPS Growth				35%	-43%	235%	23%	-39%		Equity shareholders' yield	3.7%	-40.0%	8.1%	19.7%	15.3%
Dividend payout ratio				29%	20%	14%	15%	15%		Capex/EBITDA	87.3%	85.3%	59.6%	44.6%	46.2%
Input assumptions										Cash conversion	0.5x	-6.2x	0.4x	0.8x	1.0x
										Valuation
Gold, $/oz				1,257	1,298	1,273	1,369	1,309
$/ZAR				13.60	12.85	14.25	14.25	14.09		SoTP DCF fair value and calculation of target price				ZARmn	ZAR/sh
Calculated breakeven price, $/oz										Kusasalethu				540	1.1
										Doornkop				720	1.4
South Africa breakeven				1,097	1,117	1,061	1,086	1,111		Tshepong/Phakisa				4,263	8.5
International breakeven				1,168	1,105	897	828	667		Masimong				444	0.9
Group breakeven				1,193	1,208	1,084	1,120	1,123		Target 1				327	0.7
Gold production volumes, koz										Bambanani				1,659	3.3
										Joel				379	0.8
Kusasalethu		lumes		141	142	156	156	156		Unisel				73	0.1
Doornkop		lumes		86	110	107	88	88		Moab				5,645	11.3
Tshepong/Phakisa lumes				284	302	287	290	290		Surface				2,203	4.4
Masimong		lumes		82	84	73	74	74		Hidden Valley				2,247	4.5
Target 1	lumes			86	92	87	100	100		Other				-6,467	-12.9
Bambanani		lumes		88	91	82	84	84		Operating value				12,033	24.1
Joel lumes				72	53	50	72	72		Financial instruments and rehab provision as at 30 June 2018				496	1.0
Unisel	lumes			51	41	32	21	0		Enterprise value				12,529	25.0
Moab	lumes			0	106	248	250	250		Net debt as at 30 June 2018				-4,908	-9.8
Surface	lumes			102	115	124	100	100		Minority interest				0	0.0
South Africa Total			lumes	993	1,136	1,244	1,235	1,214		50% Golpu value assuming it trades at avg. replacement cost				2,814	5.6
Hidden Valley lumes				84	26	202	180	180		Cash used in share buy-backs during 2019E				0	0.0
International total			lumes	84	26	202	180	180		Equity value				10,435	20.9
Total production			lumes	1,076	1,161	1,445	1,415	1,394
										Rounded to					21.0
Attributable Cu eq volumes, kt				214	230	287	281	277		Share price on 7/1/2019					27.1
Volume growth				-0.5%	7.9%	24.5%	-2.1%	-1.5%		Expected share price return					-22.4%
										Plus: expected dividend yield					3.5%
Contribution to FY19E mining EBITDA										Total implied one-year return					-18.9%

Share price range, ZAR:

	Kusasalethu
Hidden Valley		7%	Doornkop
			6%
22%
				Tshepong/Phakisa
				18%
Surface
6%				Masimong
				4%
Moab			Bambanani	Target 1
	Unisel	Joel		3%
25%			8%
	1%	0%

12-month high on 16-10-2018	32	12-month low on 30-1-2018				19
Price move since high	-14.1%	Price move since low				42.4%
Calculation of WACC
WACC	13.0%	Cost of debt				10.0%
Risk-free rate	9.0%	Tax rate				28%
Equity risk premium	5.0%	After-tax cost of debt				1.1%
Beta	1.00	Debt weighting				15%
Cost of equity	14.0%	Terminal growth rate				6.0%
Valuation ratios
Dec-YE, $mn	2017	2018		2019E	2020E	2021E
P/E multiple	12.9x	13.8x		4.7x	3.9x	6.3x
Dividend yield	2.2%	1.5%		3.0%	3.9%	2.4%
EV/EBITDA	4.0x	3.1x		2.0x	1.6x	1.8x
P/B	0.6x	0.5x		0.5x	0.4x	0.4x
NAV per share, ZAR	66.6	50.7		56.5	63.0	66.8

Source: Bloomberg, Thomson Reuters, Renaissance Capital estimates

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Polymetal – HOLD

Renaissance Capital

14 January 2019

Metals & Mining

Figure 106: Polymetal, $mn (unless otherwise stated)
Polymetal						POLYP.L							Target price, GBP:					8.60
Market capitalisation, $mn:						5,175							Share price, GBP:					8.66
Enterprise value, $mn:						6,595							Potential 12-month return:					5.9%
Dec-YE					2016	2017		2018E	2019E	2020E		Dec-YE	2016	2017		2018E	2019E	2020E
Income statement												Balance sheet
Revenue					1,583	1,815		1,914	2,148	2,181		Net operating assets	2,424	2,828		3,085	3,214	3,445
EBITDA					759	745		788	1,094	1,105		Investments, net of rehab provision	-113	-101		-99	-99	-99
EBIT					604	531		601	920	925		Equity	981	1,307		1,545	1,956	2,270
Net interest					-17	-67		-60	-60	-51		Minority interest	0	0		0	0	0
Taxation					-169	-89		-103	-172	-175		Net debt	1,330	1,420		1,442	1,159	1,076
Minority interest in profit					0	0		0	0	0
Net profit for the year					395	354		446	688	699		Balance sheet ratios
Underlying earnings					382	376		426	688	699		Gearing (net debt/(net debt+equity))	57.6%	52.1%		48.3%	37.2%	32.2%
Underlying EPS, USc					90	88		94	147	149		Net debt to EBITDA	1.8x	1.9x		1.8x	1.1x	1.0x
												RoCE	28.1%	20.0%		20.1%	28.7%	27.3%
Consensus EPS, USc								90	108	120		RoIC (after tax)	21.2%	15.9%		17.5%	23.0%	22.0%
DPS declared, USc					42	44		47	74	75		RoE	52.1%	32.9%		29.9%	39.3%	33.1%
Consensus DPS, USc								44	52	61		Cash flow statement
Adjusted EBIT												Operating cash flow	490	574		687	927	929
Voro					102	85		73	64	62		Capex (net of disposals)	-288	-432		-365	-380	-420
EBIT margin					65%	55%		57%	59%	58%		Other cash flows	-116	-29		-87	60	0
Okhotsk operations					78	138		152	118	114		Free cash flow	86	114		236	607	509
EBIT margin					44%	49%		55%	58%	56%		Equity shareholders' cash	126	48		184	560	468
Dukat					246	141		112	149	166		Dividends and share buy-backs	-158	-138		-206	-277	-385
EBIT margin					49%	35%		31%	39%	41%		Surplus (deficit) cash	-32	-90		-22	283	83
Omolon					96	93		75	109	107		Cash flow ratios
EBIT margin					46%	35%		35%	42%	41%			115	109		108	94	92
Varvara					25	39		62	87	78		Working capital turnover, days
EBIT margin					25%	25%		34%	42%	37%		FCF yield	1.4%	1.7%		3.9%	9.6%	8.1%
Amursk-Albazino					130	113		156	157	148		Equity shareholders' yield	2.6%	0.9%		4.1%	10.8%	9.0%
EBIT margin					44%	32%		37%	42%	40%		Capex/EBITDA	37.9%	58.0%		46.3%	34.7%	38.0%
Other					-73	-77		-29	235	251		Cash conversion	0.3x	0.1x		0.4x	0.8x	0.7x
Adjusted EBIT					604	531		601	920	925		Valuation
Income statement ratios												SoTP DCF fair value and calculation of target price					$mn	GBP/sh
EBITDA margin					48%	41%		41%	51%	51%		Voro					331	0.55
EBIT margin					38%	29%		31%	43%	42%		Okhotsk operations					612	1.01
Underlying EPS Growth					28%	-2%		7%	56%	1%		Dukat					998	1.65
Dividend payout ratio					47%	50%		50%	50%	50%		Omolon					628	1.04
Input assumptions												Varvara					900	1.49
												Amursk-Albazino					705	1.17
Gold, $/oz					1,248	1,258		1,269	1,350	1,338		Armenia					-4	-0.01
Silver, $/oz					17.1	17.1		15.7	16.7	17.8		Mayskoye					237	0.39
$/RUB					67.0	58.3		62.8	67.0	68.0		Kyzyl					2,094	3.47
$/KZT					342	326		345	363	353		Nezhda					828	1.37
Gold breakeven price, $/oz					748	861		861	780	762		Corporate and other					-771	-1.28
Gold equivalent production volumes, koz												Operating value					6,556	10.85
												Financial instruments and rehab provision as at 31 December 2017					-101	-0.17
Voro lumes					129	120		101	80	80		Enterprise value					6,455	10.69
Okhotsk operations		lumes			131	186		229	152	152		Net debt as at 31 December 2017					-1,420	-2.35
Dukat	lumes				369	322		310	304	304		Minority interest					0	0.00
Omolon	lumes				170	202		182	195	195		Prognoz valued at 70% of acquisition price					151	0.25
Varvara	lumes				85	130		143	157	157		Cash raised in rights issue during 2018E					0	0.00
Amursk-Albazino		lumes			244	268		322	278	278		Equity value					5,186	8.59
Armenia lumes					26	50		54	8	0
												Rounded to						8.60
Mayskoye lumes					116	124		136	135	135		Share price on 7/1/2019						8.66
Kyzyl lumes					0	0		80	300	330		Expected share price return						-0.7%
Total volumes					1,268	1,402		1,556	1,610	1,631		Plus: expected dividend yield						6.7%
Volume growth					0%	11%		11%	3%	1%		Total implied one-year return						5.9%
Contribution to FY18E adjusted EBITDA												Share price range, GBP:
												12-month high on 15-1-2018	9.45 12-month low on 10-4-2018					5.78
			Mayskoye		Kyzyl	Voro						Price move since high	-8.3% Price move since low					49.9%
	Armenia		6%		2%	10%						Calculation of WACC
		2%
Amursk-Albazino										Okhotsk		WACC	8.2%	Cost of debt				5.0%
												Risk-free rate	4.0%	Tax rate				20%
23%
										20%		Equity risk premium	6.0% After-tax cost of debt					1.2%
												Beta	1.00	Debt weighting				30%
												Cost of equity	10.0%	Terminal growth rate				2.0%
	Varvara											Valuation ratios
												Dec-YE, $mn	2016	2017		2018E	2019E	2020E
	9%								Dukat
			Omolon									P/E multiple	12.5x	13.6x		10.3x	7.5x	7.4x
									17%
			11%									Dividend yield	3.7%	3.7%		4.9%	6.7%	6.8%
												EV/EBITDA	8.1x	8.8x		7.6x	5.8x	5.7x
												P/B	4.9x	3.9x		2.9x	2.7x	2.3x
												NAV per share, $	2.3	3.0		3.3	4.2	4.8

Source: Bloomberg, Thomson Reuters, Renaissance Capital estimates

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PJSC Polyus – BUY

Renaissance Capital

14 January 2019

Metals & Mining

Figure 107: Polyus Gold, $mn (unless otherwise stated)

PJSC Polyus (MOEX)	PLZL.MM	Target price, RUB:	6,300
Market capitalisation, $mn:	10,279	Share price, RUB:	5,287
Enterprise value, $mn:	13,448	Potential 12-month return:	25.5%

Dec-YE			2016	2017	2018E	2019E	2020E
Income statement
Revenue			2,458	2,721	2,829	3,749	3,707
Adjusted EBITDA			1,536	1,702	1,831	2,514	2,457
Adjusted EBIT			1,363	1,485	1,507	2,188	2,123
Net interest			410	76	-676	-194	-177
Taxation			-326	-290	-101	-399	-389
Minority interest in profit			-25	-1	-10	0	0
Net profit for the year			1,420	1,240	756	1,592	1,556
Adjusted earnings			952	1,015	1,298	1,595	1,556
Adjusted EPS, USc			676	789	981	1,205	1,176
Consensus EPS, USc					956	915	1,025
DPS declared, USc			0	405	425	495	576
Consensus DPS, USc					431	469	508
Adjusted EBITDA			753	953	1,104	1,275	1,286
Olimpiada
EBITDA margin			63%	66%	71%	73%	72%
Blagodatnoye			417	414	365	440	459
EBITDA margin			72%	71%	67%	71%	69%
Verninskoye			146	149	184	184	179
EBITDA margin			62%	57%	63%	65%	64%
Alluvials			90	54	40	55	49
EBITDA margin			40%	28%	24%	31%	29%
Kuranakh			107	109	117	139	134
EBITDA margin			53%	50%	52%	56%	54%
Natalka			0	0	11	419	351
EBITDA margin			-	-	33%	62%	61%
Other			-150	-194	-316	-325	-334
Adjusted EBITDA			1,363	1,485	1,507	2,188	2,123
Income statement ratios
EBITDA margin			62%	63%	65%	67%	66%
EBIT margin			55%	55%	53%	58%	57%
Adjusted EPS Growth			38%	17%	24%	23%	-2%
Dividend payout ratio			0%	51%	43%	41%	49%
Input assumptions
Gold, $/oz			1,248	1,258	1,269	1,350	1,338
$/RUB			67.0	58.3	62.8	67.0	68.0
Gold breakeven price, $/oz			715	830	909	931	1,021
Gold production volumes, koz
Olimpiada lumes			984	1,177	1,304	1,313	1,354
Blagodatnoye		lumes	457	457	415	462	493
Verninskoye lumes			186	206	228	210	210
Alluvials	lumes		169	146	136	132	128
Kuranakh	lumes		160	171	178	185	185
Natalka	lumes		6	3	137	498	429
Sukhoi Log		lumes	0	0	0	0	0
Total volumes			1,960	2,160	2,398	2,801	2,800
Volume growth			11%	10%	11%	17%	0%

Contribution to FY18E adjusted EBITDA

Alluvials	Kuranakh	NatalkaOther
2%	6%	1%	1%
Verninskoye			Olimpiada
10%			60%

Blagodatnoye

20%

Dec-YE	2016	2017		2018E	2019E	2020E
Balance sheet
Net operating assets	3,254	4,406		4,538	4,847	5,089
Investments, net of rehab provision	-427	-673		-767	-767	-767
Equity	-508	564		403	1,340	2,135
Minority interest	94	92		86	86	86
Net debt	3,241	3,077		3,281	2,653	2,102
Balance sheet ratios
Gearing (net debt/(net debt+equity))	118.6%	84.5%		89.1%	66.4%	49.6%
Net debt to EBITDA	2.1x	1.8x		1.8x	1.1x	0.9x
RoCE	47.1%	37.5%		32.8%	45.8%	42.0%
RoIC (after tax)	40.6%	31.0%		24.7%	36.8%	33.7%
RoE	129.7%	3625.0%		268.4%	183.0%	89.6%
Cash flow statement
Operating cash flow	1,386	1,483		1,440	2,037	2,021
Capex (net of disposals)	-466	-804		-814	-596	-565
Other cash flows	-1,036	-245		192	-3	0
Free cash flow	-116	434		818	1,439	1,456
Equity shareholders' cash	714	738		371	1,283	1,314
Dividends and share buy-backs	-3,591	-574		-575	-655	-762
Surplus (deficit) cash	-2,877	164		-204	628	552
Cash flow ratios	23	20		29	26	28
Working capital turnover, days
FCF yield	-1.0%	3.3%		6.0%	11.0%	11.6%
Equity shareholders' yield	8.7%	7.3%		3.6%	12.4%	12.7%
Capex/EBITDA	30.3%	47.2%		44.4%	23.7%	23.0%
Cash conversion	0.8x	0.7x		0.3x	0.8x	0.8x
Valuation					LSE	MOEX
SoTP DCF fair value and calculation of target price				$mn	$/share	RUB/sh
Olimpiada				9,306	35.2	4,712
Blagodatnoye				3,140	11.9	1,590
Verninskoye				1,297	4.9	657
Alluvials				110	0.4	56
Kuranakh				868	3.3	439
Natalka				2,985	11.3	1,511
Sukhoi Log				-40	-0.2	-20
Other				-1,282	-4.8	-649
Operating value				16,384	61.9	8,295
Financial instruments and rehab provision as at 31 December 20				-673	-2.5	-341
Enterprise value				15,711	59.4	7,954
Net debt as at 31 December 2017				-3,077	-11.6	-1,558
Minority interest				-92	-0.3	-47
Convertible debt cost at conversion price				-58	-0.2	-29
Cash raised in rights issue during 2018E				0	0.0	0
Equity value				12,485	47.2	6,321
Rounded to					47.0	6,300
Share price on 7/1/2019					38.0	5,287
Expected share price return					23.7%	19.2%
Plus: expected dividend yield					6.4%	6.4%
Total implied one-year return					30.0%	25.5%
Share price range, RUB
12-month high on 3-1-2019	5,468 12-month low on 9-4-2018					3,208
Price move since high	-3.3%	Price move since low				64.8%
Calculation of WACC
WACC	8.7%	Cost of debt				7.0%
Risk-free rate	4.0%	Tax rate				20%
Equity risk premium	6.0% After-tax cost of debt					1.7%
Beta	1.00	Debt weighting				30%
Cost of equity	10.0%	Terminal growth rate				2.0%
Valuation ratios
Dec-YE, $mn	2016	2017		2018E	2019E	2020E
P/E multiple	9.4x	9.7x		8.0x	6.5x	6.6x
Dividend yield	0.0%	5.3%		5.4%	6.3%	7.4%
EV/EBITDA	7.5x	7.8x		7.5x	5.2x	5.1x
P/B	-16.2x	17.9x		25.7x	7.7x	4.8x
NAV per share, $	-3.9	4.3		3.0	10.1	16.1

Source: Bloomberg, Thomson Reuters, Renaissance Capital estimates

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