PLZL.L Regulatory News (PLZL)

21 May 2008 15:58



For immediate release Moscow, May 21, 2008

Polyus Gold announces the decisions taken by the Board on May 21st, 2008.

OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia's leading gold producer, today held a Board meeting where decision relating to the upcoming annual general shareholders meeting (AGM) was taken. The Board decided to convene the AGM on June 26th, 2008, in Moscow. The Board also approved the agenda of the AGM, preliminary approved the annual report of OJSC Polyus Gold for the year 2007 and made its recommendations on dividend payments for 2007. The record date was defined as May 21, 2008.

In addition to that, the Board members reviewed and approved the text of the Board report for the AGM, expressing the position of the Board on all the items of the agenda. 

Having reviewed the draft Board AGM report, the Board members made their recommendations to the shareholders to approve the Annual report of Polyus Gold as well as the 2007 financials, including the profit and loss report. 

The Board of Polyus Gold also considered the issue of profit allocation for the year 2007. The Board recommended to allot on dividend payments RUR562 351 853.65 (approximately US$23.7 million) of the net income of the company, which is close to 100% of the net income of OJSC Polyus Gold in accordance to Russian Accounting Standards (RAS). The dividend payments were defined as 2.95 rubles (approx. US$ 0.12) per 1 ordinary share of OJSC Polyus Gold, and to be paid before August 29th, 2008. 

On the agenda item 'About the election of new Board members' the Board recommended to vote for the following candidates:

Sergei Batekhin

Valery Braiko

Evgueni Ivanov

Kirill Parinov

Mikhail Prokhorov

Valery Rudakon

Ekaterina Salnikova

Pavel Skitovich

Christophe Francois Charlier

Due to the ongoing investigation initiated by Lord Patrick James Gillford in relation to his status as an independent director, the Board was unable to support his candidacy and suggested to elect Mr. Christophe Francois Charlier, Member of the Board of Ecometals Limited, as an independent member of the Board of OJSC Polyus Gold. 

On the agenda item 'About making amendments into the Charter of OJSC Polyus Gold' the Board recommends to vote For on every clause of the draft decision. The Board believes that the suggested amendments to the Charter are aimed at improving the corporate governance standards of the company. In addition to that, the amendments will enhance the role of the Board in making decisions of strategic importance for the company as well as in important deals that formally don't meet the criteria of large transactions or related-party transaction. The Board is also pointing out that the suggested amendments meet both Russian and international corporate governance standards. 

The Board members also recommended to the shareholders to approve Rosexpertiza ltd. as the auditor of the company's 2008 financials in accordance with Russian Accounting Standards (RAS).

The Board also set the limit for the Board members' liability insurance as $300,000 for one member, and $20 million for the whole Board. This rate of insurance conforms to the industry standards set by leading international insurance companies for Russian issuers with shares traded on stock exchanges in Great Britain and the US.

In addition to the matters relating to the upcoming AGM, the Board also took a number of decisions aimed at improving the company's corporate governance standards. The Strategy Committee of the Board as well as Human resources and Remuneration Committee of the Board were created. 

The Board also supported the suggested split of the company's American Depositary Receipts (ADRs) and commissioned General Director Evgueni Ivanov to take all the required actions to change the conversion coefficient of ordinary shares to ADRs, in accordance with the requirement of the legislation.

The agenda of the Board meeting also included the item suggested by a Board member Sergei Batekhin relating to the recent offer made by investment fund Kazimir Partners to acquire 4 766 000 shares for US$73.44 per share. The Board commissioned the management to prepare a backed up position on the proposal of Kazimir Partners by May 26, 2008. 

The Board also considered the issue of voting on the AGM on June 26 of Polyus Gold's shares belonging to Jenington International Inc. The Board commissioned General Director of OJSC Polyus Gold Evgueni Ivanov to insure that the stake in OJSC Polyus Gold belonging to Jenington International Inc. will vote in accordance with the recommendations of the Board of OJSC Polyus Gold. 

- Ends -

Polyus Gold is the largest gold producer in Russia. Headquartered in Moscow, Polyus Gold's operating mines and development/exploration projects are located in five major gold mining regions of Russia - Krasnoyarsk, Irkutsk, Magadan, Amur regions and the Republic of Sakha (Yakutia). The company produced 1.2 m oz of gold in 2007.

For further information please contact

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

For press:

Victoria V. Vergelskaya, PR Director Elena D. Evstigneeva, Media Relations +7 (495) 641-3365 +7 (495) 544-5496

pr@polyusgold.com