Polymetal is pleased to announce obtaining a license for geological exploration at the Rudnichniy field in the Sverdlovsk Region.

Northern Urals Gold, a subsidiary of Polymetal, obtained a license for geological exploration at the Rudnichniy filed in the Sverdlovsk region. The license allows the Company to search for and estimate the field’s gold ore deposits.

The government granted the Company an exploration license for the Rundichniy field valid until August 31st, 2011 as the sole applicant.

The licensed area of the Rudnichniy field is 7.9 square kilometers, and it is located only 2 kilometers to the north of the Vorontsovskoye deposit in the town of Krasnoturinsk in the Sverdlovsk region. Vorontsovskoye is an active gold deposit developed and operated by Northern Urals Gold.

The mineral resources of the field till 200 meters depth total 480,000 ounces of gold (15 tons) with an average head grade 1-2 g/t.

The Rudnichniy field has been known since the early 19th century. A few large alluvial gold deposits are known to exist at the field. Since 1826, more than 1 mln. ounces (30 tons) of gold have been mined at Rudnichniy. Estimates suggest that the field has promising gold-porphyry and gold-sulfide mineralizations of the Vorontsovskoye type. The Company expects to find several zones with richer grades. The ore will be processed using heap leaching technology.

The Company believes that the field has not been sufficiently well-studied to date for ore gold. Before the end of the year (2006), Polymetal plans to develop a detailed program of future, active geological surveying operations in the licensed field. The goal of this exploration work will be to develop the Rudnichniy field so that its gold deposits can be used as an additional reserve base for the Vorontsovskoye plant. The majority of this exploration work will be carried out between 2007 and 2009. By 2010, the Company plans to have completed a detailed pre-feasibility study and necessary governmental examinations of Rudnichniy’s reserves.

Commenting on the announcement Vitaly Nesis Polymetal CEO, said: “Taking into account well-developed infrastructure and the Company’s successful track record in the Sverdlovsk Region, we believe that in the future the Rudnichniy field, along with the Galinskiy field and the Katasminskaya area, will significantly contribute to the reserve base that will be used in Vorontsovskoye’s first and second stages and will extend its [Vorontsovskoye’s] life-of-mine.”