Dukat

During 2005, Polymetal fulfilled the plant’s modernization program allowing production capacity to increase to 850,000 tpa of ore. Polymetal started to design, construct (preliminary stages) and purchase equipment for stage II of the plant that will allow the company to increase processing capacity to 1 mln. tpa of ore. The planned increase in the share of underground mining compared to open-pit mining in 2005 at the Dukat deposit resulted in an overall drop in open-pit mining for Polymetal.

The company started an active geological survey program to provide the plant with additional ore. Polymetal plans to establish a new specialized exploration company to conduct geological studies of near and far flanks at the deposit and new areas in the region.

Lunnoye

Polymetal is completing design work related to a feasibility study to mine Lunnoye’s reserves using underground mining (currently only open-pit mining is being carried out. The company plans to start underground mining in 2007). Within the reported period, the company started design work targeted at developing the new Arylakh deposit which will be explored beginning in 2006 (ore processing from this deposit will be conducted at the plant of the Lunnoye deposit). At present, the company completed a design of transport infrastructure. The first stripping and mining works are planned for the IV quarter of 2006.

Vorontsovskoe

Because of the growth in mining (up to 900,000 tpa of ore were mined in 2005), drilling and blasting were increased and new transport and drilling equipment were purchased. In the next year, the company plans to mine 1 mln. tpa of ore. Polymetal is conducting an active exploration program to provide the plant with additional reserves. At the end of 2005, the company won auctions for licenses for the Galkinskaya and Katasminskaya fields in the region.

Khakandjinskoye

In the reported period, the company reached its project capacity of 500,000 tpa of ore. Polymetal completed reconstructing technological schemes aimed at boosting production capacity to 600,000 tpa of ore. The company finished exploration work at pit #2 and #3 of the Khakanjinskoye deposit (at present mining is carried out only at pit#1) and started geological surveying of the flanks and deep levels of the deposit. Polymetal started design work of the mining facility and infrastructure at the new satellite deposit Yurievskoye.