According to IQ 2006 results, ore mining decreased by 8% to 596 th. tons compared to the same period in 2005. The ratio of ore mined by open-pit compared to underground mining in the reported period for 2006 was relatively unchanged from IQ 2005 figures. The volume of ore mined by underground mining increased by 4%; open-pit mining showed a drop of 11% compared with IQ 2005. During the current financial year, 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 quarter increased by 9% to 444 th. tons. The positive dynamics were due to an increase in production capacity at the Khakanjinskoye (Khabarovsk Territory) plant and Vorontsovskoye"s stage II (Sverdlovsk region) plant.

Based on the results of IQ 2006, Polymetal"s gold production rose 13% (compared to IQ 2005) to 58 th. oz. Silver production decreased to 4,261 th. oz. (a 9% drop compared to IQ 2005).

The growth of gold production was due to increased production at stage II of the Vorontsovskoye plant. The negative dynamics for silver production for the quarter ending March 31st was primarily due to the lower average head grade of silver in the ore at the Lunnoye deposit (Magadan region).

According to IQ 2006 results, gold sales rose by 13% to 53 th. oz. at an average weighted sales price of 550 $US/oz. (with a discount from the LME quotation). Silver sales demonstrated a 9% drop to 4,160 th. oz. due to a decrease in silver production in the reported quarter. The average weighted sales price for silver in IQ 2006 was 8.2 $US/oz. (with a discount from the LME quotation and deliveries under forward contracts with predetermined prices). .