Based on the materials from the company’s official web-site.

Strategic alliance with AngloGold Ashanti

In the third quarter of 2006, the Company announced a strategic alliance with AngloGold Ashanti. The joint venture will focus on identifying, acquiring and developing gold deposits in certain Russian regions. Each of the two parties - the Company and AngloGold Ashanti - will contribute assets equal to 50% of the JV. Initially, the JV is expected to include the following projects: Veduga, Bogunay and Anenskoye (Krasnoyarsk Territory) and Aprelkovskoye-Peshkovsky ore knot (Chita Region).

Key highlights

January - Published a JORC Code-compliant mineral reserve and resource report;

January - Released 2005 results that showed production growth. Gold production increased 15% to 243 th. oz. Silver production rose 10% to 18,937 th. oz.

February - Created two specialized geological exploration companies: Northern Urals Geological Exploration (Sverdlovsk Region) and Dukat Geological Exploration (Magadan Region)

February - Export delivery of silver to the LBMA to assist the Kolyma refinery in obtaining the LBMA "Good Delivery" certificate;

February - Signed an agreement with the Omsukchan region (Magadan region) local administration for social-economic cooperation in the sum of 20 mln. roubles annually for four years;

March - Retired rouble-denominated three year maturity bonds and paid the last coupon thereon;

May - Completed successful corporate re-branding;

June - Signed a $160 mln. comprehensive risk insurance program for Dukat and Lunnoye’s production assets;

June - Received a license for geological survey of gold and silver at the Arkinskiy ore field (Khabarovsk Territory);

June - Discovered new gold and silver deposit, Anenskiy, in the Krasnoyarsk Territory

July - Acquired 100% of Resource Albazino and the operating license for the Albazino gold deposit (Khabarovsk Territory) from Far Eastern Resources;

August - Received an exploration license (search and estimation) for the Rudnichniy gold field (Sverdlovsk Region);

August - Received an exploration license (search and estimation) for the Dukat prospective area (Magadan Region);

September - Completed an environmental audit (conducted by SRK Consulting, Britain) that certified the Company met World Bank-established ecological standards;

September - Completed a preliminary strategic alliance agreement with AngloGold Ashanti for geological exploration, acquisition and development of gold deposits in Russia.