SVST.L Regulatory News (SVST)

29 Oct 2007 14:00

OAO Severstal29 October 2007 Press Release 29 October, 2007 Severstal Resurs acquires two gold mines in Russia Severstal's mining division, Severstal Resurs, has acquired two gold-miningenterprises: OOO Neryungri Metallic that mines gold from the Tabornoye depositin the Sakha-Yakutiya Republic, and ZAO Rudnik Aprelkovo which mines from thePogromnoye gold deposit in the Chitinskaya oblast. Severstal Resurs acquired both businesses through Severstal's subsidiaryBluecone Ltd, in a cash deal for an undisclosed sum. Both mines were originallymanaged by the Arlan investment company. "Both the Tabornoye and Pogromnoye deposits are very attractive assets withsignificant development potential. We see these deals as an important next stepin the formation of Severstal Resurs' gold-mining division. The deals alsoprogress our strategy of developing Severstal's mining business", said RomanDeniskin, CEO of Severstal Resurs. Tabornoye is located in the southern part of Yakutiya, 100 km away fromBaikal-Amur railway. Pogromnoye is in the Chitinskaya oblast, 300 km east ofChita city. Both deposits are operated as open-pit mines with gold extracted utilizing heapleaching technology. Gold production at Tabornoye and Pogromnoye for 2007 is estimated to be 2,7 tons(or 87 thousand ounces). Tabornoye has a reserve balance of C1+C2 gold amounting to 15 tons, while P1+P2gold exceeds 70 tons. The Pogromnoye gold deposit's reserves are estimated to be25 tons of C1+C2. In September, 2007, OOO Severnaya Zolotorudnaya Kompaniya (Northern Gold Miningcompany), a company controlled by Severstal Resurs, secured the geologicalexploration and gold extraction rights for the Uryahskoye ore field (100 tons ofP2+P3 gold) in the Irkutskaya oblast, and the Sagan-Golsky gold field inBuryatiya Republic (60 tons of P1+P2 gold). Severstal Resurs also controls a 29.7% stake in Irish gold-mining company CelticResources. On 27 October 2007 Severstal's subsidiary Centroferve Limited made acash offer to the shareholders of Celtic to acquire all the shares of thecompany. The offer is valid until 16 November 2007. Severstal Resurs manages all of Severstal's mining operations. The divisionconsists of four high-quality mining complexes in northwest Russia and inWestern Siberia producing iron ore and coking coal. It is the second largestproducer of pellets and coking coal in Russia. In 2006, Severstal's Mining division produced 5.4 million tons of coalconcentrate, 2.2 million tons of coking coal, 2.1 million tons of steam coal,9.5 million tons of iron ore pellets and 4.5 million tons of iron oreconcentrate. The reserves and resources of the company were estimated by IMC Limited to be1.8 billion tonnes of iron ore as at 1 January 2006 and 0.7 billion tonnes ofcoal as at 1 April 2006. The scrap business of Severstal Resurs consists of a number of scrap metal yardsin the northwestern, central and southern parts of Russia. The total processingcapacity is 1.3 million tonnes of scrap per year. Scrap is delivered to Europeand Middle East through the ports of St. Petersburg, Murmansk, Arkhangelsk,Rostov and Taganrog. Arlan investment company - www.arlan.ru For further information please contact:Severstal, Investor Relations - RussiaDmitry Druzhinindruzhinin@severstalgroup.com Severstal Resurs, Public Relations - RussiaSergey Loktionov+7 495 981 09 10sa.loktionov@severstalresurs.ru Tulchan Communications - UKDominic Fry/Tom Murray+44 207 353 4200dfry@tulchangroup.com This information is provided by RNS The company news service from the London Stock Exchange