KGHM Polska Miedź S.A.

Management Reports • Mar 2, 2016

Information on the update of conducted tests for impairment

In reference to regulatory filing no. 8/2016 dated 8 February 2016, theManagement Board of KGHM Polska Miedź S.A. ("Company") announces thatthe impairment tests performed on the carrying amount of assets inaccordance with IAS 36 have been updated.

For purposes of the tests conducted, the results of which were announcedin regulatory filing no. 8/2016, the recoverable amount was set based onan analysis of the discounted cash flow generated by individual assets,based on forecasts of pricing paths for particular commodities and theschedules for particular projects which were current as at the date thetests were performed.

During the work on the Company's budget for 2016 the market priceforecasts of individual commodities were updated, which in particularled to a change in the forecasted copper price for the period 2017 -2020. The forecasted long term copper price remained unchanged. Inaddition, the Company's Management Board decided to modify the existingschedule for the Victoria project in the Sudbury basin.

As a result, in order to guarantee that the recoverable amountsdetermined for individual assets are based on assumptions which arevalid at the moment of completion of the Company's financial statementsfor 2015, the impairment test was appropriately updated. In updatingthis test, apart from the adoption of current forecasts of pricing pathsand Victoria's new project schedule, the risk associated with individualassets was revised which was reflected in the applied discount ratesused to calculate discounted cash flow generated by the individualassets. Other parameters assumed in the tests for impairment, inparticular production related assumptions, were not changed.

With respect to the separate financial statements of KGHM Polska MiedźS.A. for the financial year ended 31 December 2015, the updated testsindicated justified recognition of an impairment loss in the amount ofPLN 4 854 million due to an impairment of the carrying amount of theinterest in a holding company which indirectly owns 100% of KGHMInternational Ltd.

With respect to the consolidated financial statements of KGHM PolskaMiedź S.A. for the financial year ended 31 December 2015, the updatedtests indicated justification to recognise the following impairmentlosses after including the tax effect (amounts in USD together withtheir equivalents in PLN at the average exchange rate of the NationalBank of Poland as at 31 December 2015):

1. An impairment loss in the amount of USD 787 million (PLN 3 070million) due to an impairment of the carrying amount of the investmentin Sierra Gorda SCM,

2. An impairment loss in the amount of USD 240 million (PLN 936 million)due to an impairment of the carrying amount of assets of Sudbury Basinmines,

3. An impairment loss in the amount of USD 212 million (PLN 827 million)due to an impairment of the carrying amount of assets of the Robinsonmine; and

4. An impairment loss in the amount of USD 59 million (PLN 230 million)due to an impairment of the carrying amount of assets of the Franke mine.

The total amount of the aforementioned impairment losses due to updatedimpairment testing carried out in the consolidated financial statementsafter including the tax effect is equal to USD 1 298 million (PLN 5 063million).

The aforementioned results for impairment testing supersede the resultsannounced in regulatory filing no. 8/2016 from 8 February 2016. Apartfrom this, the results of impairment testing announced in regulatoryfiling no. 8/2016 were unchanged.

Until the auditing process of the Company's financial statements for2015 is completed, the amounts presented above remain as estimates. Thefinal results of the testing will be presented in the separate andconsolidated financial statements for 2015, the publication of which isplanned for 17 March 2016.

Legal basis: art. 56 section 5 of the Act dated 29 July 2005 on publicofferings and conditions governing the introduction of financialinstruments to organised trading, and on public companies (unified text:Journal of Laws 2013.1382).