According to 2005 results, ore mining rose by 1.2% to 2,706 th. tons compared to 2004. The ratio of ore mined by open-pit compared to underground mining in 2005 was relatively unchanged from 2004 figures (83%). The volume of ore mined by underground mining increased by 17.9%; open-pit mining showed a drop of 1.6% compared with 2004. During 2006, Polymetal expects a growth in the share and volume of underground mining (at present the company has underground mining only at the Dukat deposit).

The volume of ore processed in the reported period increased by 17.9% to 2,525 th. tons. The positive dynamics were due to an increase in production capacity at the Dukat plant, reaching full capacity at the Khakanjinskoye plant and putting into operation Vorontsovskoye’s stage II.

Based on the results of 2005, Polymetal’s gold production rose 15% (compared to 2004) to 243 th. oz. Silver production increased to 18,937 th. oz. (a 10% increase compared to 2004).

The growth of gold production was due to increased production at the Khakanjinskoye deposit (Khabarovsk region). The positive dynamics for silver production for the year ended 12/31/2005 was primarily due to increased production capacity at the Dukat deposit (Magadan region).

Commenting on today’s announcement, Vitaly Nesis, Polymetal CEO, said: “We consider the increased production results demonstrated by the company in 2005 as undoubted successes. These positive results will allow us to strengthen our position on the world precious metal market. We still have great growth potential at our existing deposits. And at the same time we have ambitious plans to create a second generation of mining assets.