Petropavlovsk : Amur Zoloto Transaction

5 December 2016

Amur Zoloto Transaction Update

On 28 April 2016 Petropavlovsk PLC ("Petropavlovsk" or the "Company" and, together with its subsidiaries, the "Group") announced that it had entered into an agreement (the "Agreement") with Russia's Alliance Mining Group ("AMG") and Lexor Group S.A. ("Lexor" and, together with AMG, the "Contributors") to acquire Amur Zoloto LLC ("AZ"), an established gold company with production and development assets in the Khabarovsk region in the Far East of Russia (the "Proposed Acquisition").

The Company announces it has received the below letter, from the Contributors, proposing improved terms to the original Agreement, which is under review:

"We would like to acknowledge your kind efforts in structuring our deal during last several months and the overall progress since signing the Contribution Agreement in April 2016 (the 'CA').

We have been closely following the latest corporate events of Petropavlovsk Plc ("Petropavlovsk") and the most recent successful bank debt restructuring with Sberbank and VTB. The new maturity and smoother repayment profile with softer financial covenants shall enable Petropavlovsk to dispose additional funds for the production growth and so capitalise the solid reserve base. Your decision to complete the construction of POX using cash flow should allow to open the non-refractory reserves and strengthen your production and financial efficiency in medium- and long-run.

Meanwhile, we have noticed the support of our transaction by Sberbank and VTB and anticipate a favourable fairness opinion as requested by your Board.

In our opinion, the recent positive developments validate the improved financial status of your company and reveal the growth potential of Petropavlovsk assets. Our cooperation shall further diversify the reserve base of Petropavlovsk and reinforce the competitive advantages and synergies in the Russian Far East.

We are willing to justify the upside potential of our transaction and aim to accelerate the successful completion. Following our several discussions, the shareholders of Amur Zoloto are prepared to financially support the AZ's current production plan in order to avoid any recourse to the Petropavlovsk cash flow in 2017-18. Furthermore, we do propose to improve terms of the CA in

favour of Petropavlovsk and reduce the number of shares of Petropavlovsk to be issued to AZ's shareholders to 20% after completion of the transaction.

We are convinced that the contribution of AZ's assets will be beneficial and valuable to all stakeholders of Petropavlovsk and look forward to having the soonest approval of the Board and the supportive voting of your shareholders."

Discussions between the parties, and their respective shareholders, are continuing and the Company will make further announcements in due course.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Petropavlovsk is one of Russia's leading gold mining companies. We operate some of the largest gold mines in Russia in terms of their gold production output, processing capacity and resource base. Furthermore, our assets have untapped exploration potential. We are a leading employer and contributor to the development of the local economy in the Amur region, Russian Far East, where we have operated since 1994. As at 31 December 2015, we have produced approximately 6Moz of gold.

The Company is listed on the Main Market of the London Stock Exchange (Ticker POG:LN)

ENQUIRIES

This release may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" 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 release and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, liquidity, prospects, growth, strategies and expectations of the industry.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward- looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates may differ materially from those described in, or suggested by, any forward-looking statements contained in this release. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this release, those developments may not be indicative of developments in subsequent periods. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in law or regulation, currency fluctuations (including the US dollar and Rouble), the Group's ability to recover its reserves or develop new reserves, changes in its business strategy, political and economic uncertainty. Save as required by the Listing and Disclosure and Transparency Rules, the Company is under no obligation to update the information contained in this release.

Past performance cannot be relied on as a guide to future performance.

The content of websites referred to in this announcement does not form part of this announcement.