KGHM Polska Miedź S.A.

Earnings Release • Mar 22, 2024

Report Content Information on the results of the conducted tests for impairment

The Management Board of KGHM Polska Miedź S.A. ("the Company"), inreference to regulatory filing no. 4/2024 dated 10 January 2024,announces that as a result of the identification of indications of apossible change in the recoverable amount of key Polish andinternational assets, the Company conducted impairment testing regardingthe following Cash Generating Units:

• the Polish production assets (mining and metallurgical assets) of KGHMPolska Miedź S.A.,

• the assets of the Robinson mine,

• the assets of the Carlota mine,

• the assets of the Sudbury Basin (comprised of the Morrison mine, thePodolsky mine and the McCreedy mine), and

• the assets of the pre-operational Victoria project.

In terms of the Polish production assets (mining and metallurgicalassets) of KGHM Polska Miedź S.A., the recoverable amount of theseassets was determined on the basis of an analysis of the discounted cashflows generated by these assets, and which took into account, amongothers, the current forecasts of price paths of individual commoditiesand energy carriers, as well as verified assumptions on medium- andlong-term productions plans, operating costs and capital expenditures.

The update of assumptions on operating costs, capital expenditures andthe discount rate, as well as a revision of medium-term productionplans, had a significant impact on the level of future cash flowsgenerated by the Polish production assets (mining and metallurgicalassets) of KGHM Polska Miedź S.A.

In terms of the international assets, the recoverable amount of theseassets was determined on the basis of an analysis of the discounted cashflows generated by individual assets, and which took into account, amongothers, the current forecasts of price paths of individual commodities,verified technical and economic assumptions on mine lives, productionvolumes, the size of the deposits, operating costs and capitalexpenditures.

The update of current forecasts of price paths, mainly the long-termprice of copper as well as discount rates, had a significant impact onthe level of future cash flows generated by the aforementionedinternational mining assets of the KGHM Group.

With respect to the separate financial statements of KGHM Polska MiedźS.A. for the financial year ended on 31 December 2023, the performedimpairment tests indicated justification for:

• the recognition of an impairment loss on the Polish production assets(mining and metallurgical assets) of KGHM Polska Miedź S.A. in theamount of PLN 3 771 million,

• the reversal of a part of the impairment losses recognised in prioryears on shares in the holding company Future 1 Sp. z o.o., whichdirectly holds 100% of the shares in KGHM INTERNATIONAL LTD. in theamount of PLN 741 million.

With respect to the consolidated financial statements of KGHM PolskaMiedź S.A. for the financial year ended on 31 December 2023, theperformed impairment tests indicated justification for:

• the recognition of an impairment loss on the Polish production assets(mining and metallurgical assets) of KGHM Polska Miedź S.A. in theamount of PLN 3 616 million,

• the recognition of an impairment loss on the assets of the Victoriaproject in the amount of USD 89 million (PLN 349 million per theexchange rate announced by the National Bank of Poland on 31 December2023),

In terms of the other international mining assets, since there are nodifferences, or no significant differences, between their carryingamounts and the recoverable amounts, it was determined that there is nobasis to change their carrying amounts.

The amounts of impairment losses/reversal of impairment losses presentedabove illustrate their impact on the profit/loss before tax. Therecognised impairment losses are of a non-cash nature and do not affectthe liquidity of either KGHM Polska Miedź S.A. or the KGHM Group.

The amounts presented above may change as they are estimates and aresubject to verification by the certified auditor. The final results ofthe testing will be presented in the separate and consolidated financialstatements for the financial year ended on 31 December 2023, thepublication of which is planned for 24 April 2024.

Legal basis: Art. 17 (1) of MAR (Regulation (EU) No 596/2014 of theEuropean Parliament and of the Council of 16 April 2014 on market abuse(market abuse regulation) and repealing Directive 2003/6/EC of theEuropean Parliament and of the Council and Commission Directives2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of theEuropean Union dated 12 June 2014, no. L 173/1)