PLZL.L Regulatory News (PLZL)

UPDATE ON PROPOSED COMBINATION WITH POLYUS GOLD AND CLOSING OF THE PRIVATE EXCHANGE OFFER

 The Board of Directors of KazakhGold Group Limited ("KazakhGold" or the "Company") is pleased to announce that the Private Exchange Offer, which was announced by the Company on 17 June 2011, is now closed for further acceptances.

As at 5.00 p.m. (New York City time) on 18 July 2011, valid acceptances had been received in respect of Polyus Securities representing in total approximately 10 per cent of Polyus Gold's existing issued share capital. The Company has waived the condition as to the level of acceptances of the Private Exchange Offer set forth in the Private Exchange Offer Document dated 24 June 2011. Accordingly, the Private Exchange Offer is now unconditional as to acceptances.

The Company expects that settlement for those Polyus Securityholders who have validly accepted the Private Exchange Offer will be effected by 26 July 2011. The Company has applied for up to 3,170,097,971 depositary receipts, including the Level I GDRs of the Company that will be distributed in the Private Exchange Offer, to be admitted to the Standard Listing segment of the Official List and to trading on the London Stock Exchange on or about 26 July 2011.

Terms used in this announcement and not otherwise defined herein shall have the meanings given to them in the Private Exchange Offer Document.

Commenting on the closing of the Private Exchange Offer, Evgeny I. Ivanov, Chairman of the Board of Directors and Chief Executive Officer of KazakhGold, said, "We are grateful for the substantial support we have received from Polyus Gold's shareholders and ADR holders in the Private Exchange Offer. The Board believes that the Proposed Combination provides significant benefits to shareholders of both KazakhGold and Polyus Gold, creating the largest pure gold producer listed on the London Stock Exchange with high growth potential and exciting prospects, which we expect will provide substantial value for the shareholders of both companies moving forward."

Enquiries:

This announcement should be read in conjunction with the Private Exchange Offer Document dated 24 June 2011 and the related Forms of Acceptance and accompanying documents, as they may be amended or supplemented from time to time. which contain the terms and conditions of the Private Exchange Offer. The Partial Offer Document and the Prospectus dated 24 June 2011 are each available for download from KazakhGold's website at: http://www.kazakhgold.com and at KazakhGold's principal place of business at 88 Wood Street, London EC2V 7RS, United Kingdom during working hours on any business day (Saturdays, Sundays and public holidays excepted). Definitions used in the Private Exchange Offer Document have the same meaning when used in this announcement, unless the context requires otherwise. 

HSBC Bank plc ("HSBC"), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for KazakhGold and no one else in connection with the Proposed Combination and will not be responsible to anyone other than KazakhGold for providing the protections afforded to clients of HSBC, nor for providing advice in relation to the Proposed Combination, the contents of this announcement or any other matter referred to herein. 

General

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England.

This announcement is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. Except as amended by this announcement, the terms and conditions of the Private Exchange Offer are contained solely in the Private Exchange Offer Document, and the related Forms of Acceptance and accompanying documents, as they may be amended or supplemented from time to time. This announcement does not constitute a prospectus or a prospectus equivalent document. Investors should not subscribe for any transferable securities referred to in this announcement except on the basis of information in a prospectus, which will be published in accordance with the Prospectus Directive. The Private Exchange Offer is being made to existing Polyus Securityholders outside of the Russian Federation, Canada, Australia and Japan who, under the laws of their jurisdictions, are permitted to participate in the Private Exchange Offer, and to certain eligible Polyus Securityholders in the Russian Federation that are "qualified investors" under Russian law. Eligible Polyus Securityholders are advised to read carefully the formal documentation in relation to the Private Exchange Offer, including the Private Exchange Offer Document and the Prospectus dated 24 June 2011 and related documents. 

Neither this announcement nor the information contained therein is an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities or other financial instruments in the Russian Federation or to or for the benefit of any person in Russia, and does not constitute and is not purported to constitute an offering to investors who are not "qualified investors" (as defined in the Russian Federal Law on the Securities Market) or advertisement of any securities or other financial instruments in Russia. This announcement and the information contained therein must not be passed on to third parties or otherwise be made publicly available in Russia. Distribution of this document does not constitute placement and/or public circulation of securities or other financial instruments in Russia and the Private Exchange Offer referred to herein does not, and is not intended to, constitute a public offer in Russia. The depositary receipts of KazakhGold Group Limited have not been registered in the Russian Federation and are not intended for or admitted to "placement" or "public circulation" in Russia.

Notice to U.S. investors

It is important for U.S. securities holders to be aware that this announcement is subject to disclosure and regulations in England that are different from those in the United States. In addition, U.S. securities holders should be aware that this announcement has been prepared in accordance with English format and style, which differs from the U.S. format and style. In particular the financial information of Polyus Gold included herein has been prepared in accordance with International Financial Reporting Standards, and thus may not be comparable to financial information of U.S. companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The KazakhGold GDRS and the KazakhGold Shares to be represented by the KazakhGold GDRs have not been and will not be registered under the Securities Act or the securities laws of any state of the U.S., and may not be offered, sold, delivered or transferred except pursuant to an available exemption from or in a transaction not subject to the registration requirements of the Securities Act and applicable U.S. state securities laws. 

These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities of the Company to be made in the United States would be made by means of a prospectus to be obtained from the issuer or selling security holder and that would contain detailed information about the Company and management, as well as financial statements. The Company does not intend to register any portion of the offering in the United States or conduct a public offering of the securities in the United States.

The Private Exchange Offer was made for Polyus Securities and is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in this Document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.

It may be difficult for U.S. holders of KazakhGold GDRs to enforce their rights and any claim they may have arising under the U.S. federal securities laws, since KazakhGold is located in a foreign country, and some or all of its officers and directors may be residents of a foreign country. U.S. holders of KazakhGold GDRs may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a U.S. court's judgment.

You should be aware that KazakhGold may purchase Polyus Securities otherwise than under the Private Exchange Offer, such as in open market or privately negotiated transactions.

Forward looking statements

This announcement, including any information included or incorporated by reference, may contain "forward-looking statements" concerning Polyus Gold, Jenington and KazakhGold. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Polyus Gold, Jenington and KazakhGold operations and potential synergies resulting from the Proposed Combination; and (iii) the effects of government regulation on Polyus Gold, Jenington and KazakhGold's businesses. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Each of Polyus Gold, Jenington and KazakhGold assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.