PLZL.L Regulatory News (PLZL)

31 Jul 2007 08:47

OJSC Polyus Gold31 July 2007 For immediate release Moscow, July 31, 2007 Polyus Gold announces preliminary production results for H1 2007 OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia's leading gold producer,today released the preliminary production results for H1 2007. During the firstsix months of 2007 Polyus Gold produced 14.6 tonnes (470 k oz) of refined goldcompared to 15.5 tonnes (502 k oz) during the same period last year. Theyear-on-year decrease is due to pre-scheduled reduction in gold production atOlimpiada mine in Krasnoyarsk region relating to the preparation for a new milllaunch there (Mill-3). The decline in reported production is also a result ofthe fact that some volumes of gold produced by the Olimpiada mine, i.e. 0.498tonnes (16 k oz) were not refined by the end of the period under review. The Group's sales volumes for the period amounted to 14.6 tonnes (470 k oz)compared to 15.7 tonnes (504 k oz) for the same period last year. The averagegold sales price for the period increased to $659.7 per oz compared to $593.7per oz in H1 2006. Commenting of the Group's H1 2007 production results General Director of PolyusGold Pavel Skitovich noted: "We are satisfied with the Group's performance inthe period under review. The achieved results give us grounds to confirm ourpreviously-stated production target of 1.2 million ounces of refined gold forthe full year 2007 . Excellent results were shown by alluvial operations whereproduction targets were exceeded substantially". During the period under review Polyus Gold's production units mined 5 667 ktonnes of ore, compared to 6 497 k tonnes in H1 2006. Ore processed in H1 2007amounted to 4 614 k tonnes compared to 4 050 k tonnes last year. During the first six months of 2007 the Group continued its large-scaleexploration activities in all areas of Polyus Gold's operations. The volume ofdrilling works amounted to 185.7km, which is a three-fold year-on-year increase,compared to 56.1km drilled in H1 2006. H1 2007 Operating Highlights I1 2007 H1 2006 Full 2006Ore mining (in '000 tonnes or as noted)Olimpiada mine Mining of ore Oxidized ore 834 869 1 646Sulfide ore 2 290 3 481 6 389 3 124 4 350 8 035Average gold grade (g/tonne)Oxidized 14.1 14.1 14.3Sulfide 5.4 3.6 4.3 Kuranakh mineMining of ore 2 151 1 763 3 847Average gold grade (g/tonne) 1.4 1.5 1.5 Zapadnoye mineMining of ore 392 384 803Average gold grade (g/tonne) 2 1.9 2Total ore mined 5 667 6 497 12 685 Ore processing (in '000 tonnes or as noted)Olimpiada mineProcessing of oreOxidized ore 741 754 1 511Sulfide ore 1 731 1 403 3 046 2 472 2 157 4 557Average gold grade (g/tonne)Oxidized 9.5 12.1 12.1Sulfide 3.4 3.53 3.57Recovery (%)Oxidized 95.5 96.7 96.9Sulfide 82.2 82.1 82.1Kuranakh mineOre processed at the mill 1 858 1 678 3 737Average gold grade (g/tonne) 1.4 1.6 1.5Recovery (%) 86.4 86.5 86.5 Zapadnoye mineOre processed 284 215 522Average gold grade (g/tonne) 2.3 2.4 2.4Recovery (%) 73 67 76.5Total ore processed 4 614 4 050 8 816Alluvial depositsSands washed (million cubic meters) 2.5 2.4 9.4Average gold grade (g/ m3) 0.6 0.5 0.6 Gold production (k oz)Olimpiada mine 347 392 854Kuranakh mine 69 71 156Zapadny mine 16 13 32Alluvials 37 26 172Total gold production1 470 502 1 215 Note: 1 - The total gold production of the Group include insignificant volumesof the metal obtained as a result of waste clean-up at non-operationalNezhdaninskoye Mine. Olimpiada mine (Krasnoyarsk region) Gold output at Polyus Gold's key production unit, Olimpiada Mine amounted to10.8 tonnes (347 k oz) in H1 2007, compared to 12.2 tonnes (392 k oz) for thesame period last year. This planned reduction of gold production volumes atOlimpiada Mine was the result of a continued depletion of oxide ore reserves andlower grades. In the period under review the Company's key production development project wascompleted. A new ore processing plant (Mill-3) at Olimpiada Mine was launched.The largest sulfide ore processing plant in Russia with a capacity of 5 milliontonnes of ore per year was commissioned in July this year. Mill-3 launch isexpected to boost the volume of sulfide ore processing at Olimpiada in H2 2007. Kuranakh mine (Yakutia) Kuranakh mine in the Sakha Republic (Yakutia) produced 2.1 tonnes (69 k oz) ofrefined gold in the first six months of 2007, compared to 2.2 tonnes (71 k oz)for the same period last year. This insignificant reduction in production wascaused by lower grades in the ore mined. Mill upgrades completed in thebeginning of 2007 will help to reach the mine's production targets set for theyear 2007. Zapadnoye mine (Irkutsk region) Gold production at Zapadnoye Mine in H1 2007 amounted to 0.5 tonnes (16 k oz),compared to 0.4 tonnes (13 k oz) in the same period last year. The continuedincrease in Zapadnoye mine production is a result of on-going efforts to upgrademining and processing techniques there. Alluvials (Irkutsk region) Gold production at alluvial deposits in Irkutsk region in the first six monthsof 2007 amounted to 1.1 tonnes (37 k oz) of gold compared to 0.8 tonnes (26 koz) in the same period last year. This substantial growth in gold production isa result of the recent programme aimed at streamlining the organizational andproduction structure of the alluvial operations, new appointments, as well ashigher gold grades of the sands. Note for editors: Polyus Gold is the largest gold producer in Russia. In 2006 its gold outputtotaled 1.2 million ounces. Headquartered in Moscow, Polyus Gold's operatingmines and development/exploration projects are located in five major gold miningregions of Russia - Krasnoyarsk, Irkutsk, Magadan, Amur regions and the Republicof Sakha (Yakutia). For further information please contact Denis Davydov Head of Investor and Public Relations Tel.: +7 (495) 641 33 65 E-mail: pr@polyusgold.com This information is provided by RNS The company news service from the London Stock Exchange