Polyus Gold

Polyus Gold (Open Joint Stock Company, OJSC) is the leading gold producer in Russia and was formed in March 2006 as a result of the spin-off of MMC Norilsk Nickel’s gold mining assets. The operating mines and development/exploration projects are located in 5 major gold mining regions of Russia - Krasnoyarsk, Irkutsk, Magadan, Amur regions and the Republic of Sakha (Yakutia).
Gold production in 2006 totaled 37.8 tonnes (1 215 000 oz).
The company’s reserves (JORC) as of 10 September 2007 amount to 68.6 m oz., based on the Inpedendent Expert's Report and Natalka deposit reserves audit prepared by Micon International.
Polyus Gold owns 100% of its operating subsidiary, ZAO (CJSC) Polyus which holds blocks in the following companies: OJSC Lenzoloto (68,2%), Lenskaya Gold Mining Company, LZRK (100%), OJSC Matrosov Mine (93,3%), OJSC Aldanzoloto GRK (100%), OJSC South-Verkhoyansk Mining Company, SVMC (100%), OJSC Yakut Mining Company (100%).
Polyus is working to an approved strategy of four times growth by 2015, resulting in 3.9m oz of production annually. It has two major projects in the Krasnoyarsk region, Blagodatnoye, the largest gold discovery in Russia with reserves of 7.2m oz, and Titimukhta.

Polyus Gold unit wins entrails usage licence for Doroninskoye ore field
12.10.07, 11:12 AM ET

LONDON (Thomson Financial) - OJSC Polyus Gold said its unit Magadan Exploration Ltd has won the auction for an entrails usage licence at the Doroninskoye ore field in the Magadan region in Russia for 18.7 mln roubles, or 720,000 usd.

The company said it expects its exploration works at the deposit to result in the discovery of a 'significant' gold-silver mineralization on the flanks of the ore-bearing system.

The field's resources are estimated at 5.5 tonnes of gold, 1,340 tonnes of silver and 4,800 tonnes of tin.

Exploration works at Doroninskoye in 2008-12 will require approximately 75 mln roubles, the company said in a statement.

On Dec 5, the company said it has won an auction for an entrails usage licence at the Kuzeyevskiy ore field in the Sukhobzimskiy district of the Krasnoyarsk region for about 1.5 mln usd.


Polyus Gold board fails to approve fields carveout

Tue Dec 18, 2007 7:47am EST

By Aleksandras Budrys (Reuters)

MOSCOW, Dec 18 (Reuters) - Board members of Russia's top gold miner Polyus Gold (PLZL.MM: Quote, Profile, Research) (PLZLq.L: Quote, Profile, Research) failed on Tuesday to approve carving out of some of its exploration assets for lack of a quorum, a Polyus statement showed.

Board members representing Polyus co-owner Vladimir Potanin, who opposes the carving out, boycotted the meeting, while one of two independent directors failed to appear, a board member told Reuters. A proposed share issue was not discussed.

"The Board entrusted (Polyus General Director Yevgeni) Ivanov to prepare and submit to the Board the comparative analyses of possible variants to carve out the above exploration assets," the statement said.

It said the variants included "delivery of exploration licenses to an independent entity with the subsequent listing of this entity on Russian and international stock exchanges, or by means of selling these exploration assets."

On the nine-seat board there are two independent directors, four who represent the interests of co-owner Mikhail Prokhorov, and Potanin's three members. In order to establish a quorum both independent directors had to participate.

Billionaire tycoons Potanin and Prokhorov are in a protracted process of dividing assets, including Polyus and its former parent company, the metals giant Norilsk Nickel (GMKN.MM: Quote, Profile, Research).

Prokhorov said last week that Polyus, which sits on the world's third-largest gold reserves, had no means to develop its deposits and needed to raise cash through an additional share issue, which he wanted to discuss at the meeting on Tuesday.

A Polyus spokeswoman said the share issue was not discussed.

"We are happy that no decision has been taken on a share issue, due to a lack of quorum," said Sergei Batekhin, a Polyus board member representing Potanin.

"We are against the carving out and we have only one formal lever to stop this process -- through blocking the (share) issue which may finally result in the carving out," said Batekhin, who is also a deputy head of Potanin's holding company Interros.

He said he believed depriving Polyus of its assets as proposed by the management damaged both shareholders' interests and the business itself as it reduced the company's value.

"We also suspect that (our opponents) are trying to dispose of deposits, which the market values at a higher price than at which they may be proposed to be sold," Batekhin said.

"We hope that Ivanov prepares documents for the next board in such a form that board members would not have a suspicion they are being manipulated," he said.

He said the main reason for disagreement lay in management not adjusting Polyus's structure to internationally accepted standards of corporate governance, under which important decisions are made by shareholders rather than managers.

Polyus expects to produce 1.215 million ounces of gold in 2007, the same amount as in 2006, the Polyus statement said. (Editing by Quentin Bryar)

Russia's Polyus to launch Natalka gold mine by 2013

Tue Jan 29, 2008 6:14am EST

MOSCOW, Jan 29 (Reuters) - Polyus Gold (PLZL.MM: Quote, Profile, Research) (PLZLq.L: Quote, Profile, Research) plans to launch what will be Russia's largest gold mine, the $2.5 billion Natalka project, in 2012 or 2013, the company's chief executive said in a statement on Tuesday.

Polyus, which mines nearly a quarter of Russia's gold, expects the Natalka mine in the country's remote northeast to produce over 1.3 million ounces a year of the precious metal -- more than the company's entire forecast production for 2007. Polyus's board, led by billionaire chairman Mikhail Prokhorov, has approved $31.3 million in capital expenditure at Natalka in 2008. It will spend $14 million installing a pilot plant in May and $8.7 million completing a feasibility study.

"We expect our enquiry for state financing of infrastructure development in the area of Natalka will soon be considered by the State Investment Fund," Chief Executive Yevgeny Ivanov said.

Natalka, in Magadan region, is the world's third-largest gold deposit, with reserves of 40.8 million ounces at an average grade of 1.13 grams per tonne to internationally recognised Joint Ore Reserves Committee (JORC) standards.

Polyus, the world's fourth-largest gold company by reserves, plans to more than triple gold output to 3.9 million ounces by 2015. It has forecast 2007 output to be close to the 1.2 million ounces mined in 2006.

The company said it would launch another project, Verninskoye in the Siberian region of Irkutsk, in 2010.

Gold production would amount to 154,000 ounces in 2010 and rise to 206,000 ounces in 2011, Polyus said in the statement.

Investment in the project over the period 2005-2011 would be $208 million, excluding exploration expenses, the cost of the licence and value-added tax, the company said.

Polyus is majority owned by Prokhorov and former business partner Vladimir Potanin, who are engaged in a protracted split of their various shared assets in mining, media and banking.

The company owns what is currently Russia's biggest gold mine, Olimpiada, and is developing several other projects across Siberia and the Russian Far East.

(Reporting by Robin Paxton; editing by Chris Johnson)

"Gold glitters in the eyes of Russia's billionaires"

Potanin's Interros wants corporate changes at Polyus Gold

Interros, the investment company controlled by Russian billionaire Vladimir Potanin, said on Thursday that the corporate governance systems of Polyus Gold were below international standards for large public companies and called for an extraordinary general meeting of the gold-miner's shareholders.

The agenda of the proposed meeting would include the “improvement of corporate governance and decision-making system at Polyus Gold, amendments to the company’s charter, as well as the re-election of the board of directors”, according to a statement on Interros' website.

Polyus, which is Russia's biggest gold producer, had ignored attempts by Interros to reform its corporate structure, and the company's management had acted without shareholder approval in attempting to sell assets, the statement said.

Potanin is engaged in a protracted dispute with former business partner Mikhail Prokhorov, over how to split their jointly-held business interests, which include a controlling stake in Polyus.

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