ZAO “Northern Urals Gold” a subsidiary of Polymetal - obtained a license for geological exploration of the Galinskaya area in the Sverdlovsk region. The license allows the Company to search for and estimate gold ore deposits in this area.

The Galinskaya area was included in the list of potential projects to be auctioned off by the Natural Resources Department of the Ural region due to the initiative of the Company. The government granted it an exploration license valid until December 1st, 2010.

The licensed area of the Galinskaya project is 3.5 square kilometers, and it is located only 26 kilometers from the Vorontsovskoye deposit in the town of Karpinsk in the Sverdlovsk region. Vorontsovskoye is an active gold deposit developed and operated by Northern Urals Gold.

The Galinskaya area was first discovered in 1961-1964 during initial explorations of copper- lead-zinc mineralization. Primary geological surveys of Galinskaya were conducted in 1973-1974. In 1991 - following a geological expedition to the area - revised estimates of the mineral reserve base were issued. The most recent geological surveys were conducted in 2002, when material from old boring pits was tested.

The Company believes that the area has not been sufficiently well-studied to date. Before the end of the year (2005), Polymetal plans to develop a detailed program of future, active geological surveying operations in the licensed area. The goal of this exploration work will be to develop the Galinskaya area so that its gold deposits can be used as additional supplies for the Vorontsovskoye plant. The majority of this work will be carried out between 2006-2007. By 2008, the Company plans to have completed a detailed pre-feasibility study (based on the results of the exploration studies). The Company also plans to have completed the necessary government examinations of Galinskaya’s reserves.

According to different valuations, the resources of the deposit, estimated in accordance with Russian methodologies amount to 480,000-640,000 ounces of gold grading 4.0 g/t. Based on forecasts, the area would most likely be developed as an open pit deposit, and the ore would be processed using heap leaching and sorption-cyanic technologies.

Obtaining the license for the Galinskaya area is a key component in Polymetal’s strategic development - ensuring an increased mineral reserve base and the life-of-mines. Acquiring newly licensed exploration sites and deposits will allow the Company to move forward with the next generation of its projects. Polymetal plans to continue to expand geological surveying work at existing licensed deposits and also to actively participate in tenders for new exploration licenses in regions where Polymetal already has active production sites.

Commenting on today’s announcement Vitaly Nesis Polymetal CEO, said: “Taking into account well-developed infrastructure and the Company’s successful work experience in the Sverdlovsk region, we believe that in the future the Galinskaya area will significantly contribute to the mineral reserve base that will be used in the first and second stages of the Vorontsovskoye plant. As a Company, we look forward to capitalizing on the positive synergetic effect.”