Based on materials from the official web-site of OJSC Polyus Gold (www.polyusgold.ru)

OJSC Polyus Gold today released the annual financial statement of CJSC Polyus and its subsidiaries (the Group) for the year ended 31 December 2005, prepared in accordance with the International Financial Reporting Standards (IFRS). The annual financial statement has been audited in accordance with International Standards on Auditing by Deloitte & Touche.

In 2005, the Group’s total sales revenue grew to $ 473 mln. demonstrating a 7% increase as compared to the year 2004. This growth was primarily due to the 10% increase of the average gold price in 2005 from 407 US dollars per ounce to 449 US dollars per ounce both on the Russian and international markets.

In 2005, the consolidated gross profit amounted to $ 207 mln. The Group’s consolidated profit for the year amounted to $115 mln. comparing to $10 mln. in 2004. The significant growth of the company’s profit was due to no impairment losses recognized with respect to goodwill on acquisition of subsidiaries in 2005, comparing to those recognized in 2004.

The Group’s cash costs in 2005 increased to $244 per troy ounce which is a $35 year-on-year growth; cash operating costs grew by $31 per troy ounce to $206 per troy ounce. Fixed assets depreciation charge in 2005 amounted to $38 per troy ounce, forming a significant part of the cash operating costs.

The key factors affecting the Group’s cost structure in 2005 are as follows:

- more complicated geological conditions in Olimpiada Mine (increase of the stripping ratio, deepening of the mine slopes, decrease in gold yield in the ore);

- purchase price growth for materials and spares, including that for fuel by 7.7% and for chemical reagents by 7.4% in 2005;

- acquisition of gold mining subsidiaries in Yakutia – OJSC Aldanzoloto GRK, OJSC Yuzhno-Verkhoyanskaya Mining Company and OJSC Yakutskaya Mining Company – and consolidation of their financial results since the fourth quarter of 2005;

- strengthening of Russian rouble in relation to the US dollar by 2% using respective annual average exchange rate.

The complete version of the audited consolidated annual financial statements of the Group for the year ended 31 December 2005, prepared in accordance with IFRS is available at www.polyusgold.ru under Investor Relations / Reports / Financials.