PLZL.L Regulatory News (PLZL)

29 Jan 2008 09:40

OJSC Polyus Gold29 January 2008 For immediate release Moscow, January 29, 2008 Polyus' Board approves Verninskoye development project and reviewspre-feasibility study for Natalka. OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia's leading gold producer,today announces that its Board of Directors on a meeting held on January 28,2007 approved the feasibility study for Verninskoye project in Irkutsk regionand reviewed pre-feasibility study for Natalka project in Magadan region. Thosetwo projects are included into the company's strategy designed till 2015. The licence holder for Natalka deposit is OJSC Matrosov Mine, a subsidiary ofPolyus Gold. In September 2007 Polyus Gold completed the international reservesaudit of Natalka deposit in accordance with JORC standards, MICON Internationalacting as the auditor. Natalka JORC reserves amounted to 40.8 m oz at theaverage grade 1.13 g/t. The Board of Directors of Polyus Gold decided to continue the preparation ofpre-feasibility study of Natalka project and approved the capital expenditurefor the project for 2008 in the amount of 813 million rubles (US$ 31.3 million).Out of that amount, 226 million rubles (US$ 8.7 million) will be allocated onthe completion of Natalka mine feasibility study, and another 366 million rubles(US$14 million) will be spent on installation of a pilot plant on the deposit inMay this year. Commenting on the event General Director of Polyus Gold Evgueni Ivanov said thatthe launch of the project is expected ahead of schedule, in 2012-2013. Natalkamine is going to become the largest gold mine in Russia with annual capacity of40 million tonnes of ore and annual gold production of over 40 tonnes (1.3 moz), which is higher than initially planned. Total investments into the projectwill amount to US$2.5 billion. "We are expecting that our inquiry for state financing of infrastructuredevelopment in the area of Natalka will be soon considered by the StateInvestment Fund", - Mr. Ivanov added. The licence holder for Verninskoye is OJSC Pervenets (included into LZRK ltd., asubsidiary of OJSC Polyus Gold). Verninskoye is located in Bodaibo district ofIrkutsk region. Verninskoye reserves (Russian C1+C2) have been increased from47 tonnes (1.5 m oz) to 107 tonnes (3.4 m oz) at 3.7 g/t following theexploration programme. According to the approved feasibility study, the project will be launched in2010. The ore to be processed at the deposit in 2010 will amount to 1.6 milliontonnes, and in 2011 that will be increased to 2.2 million tonnes per annum. Goldproduction in 2010 will amount to 4.8 tonnes (154 k oz) and in 2011 willincrease to 6.4 tonnes (206 k oz). Total investments (excluding explorationexpenses and the cost of the licence) in 2005 - 2011 will amount to 5.4 billionrubles (US$208 million) (not including VAT). Evgueni Ivanov noted that thecompany had substantially increased the project mill capacity to 2.2 milliontonnes of ore. The construction of key infrastructure facilities for Verninskoyehad been completed. And the experience acquired during Zapadnoye minedevelopment will be valuable for Vernisnkoye project, located in the sameregion. The Board of Polyus Gold also approved a list of key targets for the year 2008. For further information please contact For press: Victoria V. Vergelskaya, PR DirectorElena D. Evstigneeva, Media Relations+7 (495) 641-3365+7 (495) 544-5496 pr@polyusgold.com For investors: Alexey V. Chernushkin, Director, CM and IR Evguenia V.Buydina, IR manager +7(495) 641-3377 +7(495) 785-4031 ir@polyusgold.com Note for editors: Polyus Gold is the largest gold producer in Russia. Headquartered in Moscow,Polyus Gold's operating mines and development/exploration projects are locatedin five major gold mining regions of Russia - Krasnoyarsk, Irkutsk, Magadan,Amur regions and the Republic of Sakha (Yakutia). This information is provided by RNS The company news service from the London Stock Exchange