OJSC Polyus Gold (RTS, MICEX, LSE – PLZL), Russia’s leading gold producer, today announced the production results for the year 2006. The full year gold output showed a 17% year-on-year increase up to 37.8 tonnes (1 215 k oz), compared to 32.4 tonnes (1 038 k oz) in 2005. Increase in output is largely attributable to organic growth through the planned increased in mining of low grade sulfide ores at Olimipiada mine in Krasnoyarsk region, along the additional production coming from the Kuranakh mine in the Republic of Sakha (Yakutia), acquired at the end of 2005.

In 2006 Polyus’ production units mined 12.7 m tonnes of ore, as compared to 6.7 m tonnes of ore in 2005. The ore processed in 2006 totaled 8.8 m tonnes, compared to 5.7 m tonnes in the previous year. The substantial increase in the ore mined and processed is due to the acquisition of Kuranakh mine as well as to the planed increase in mining of low grade sulfide ores at Olimpiada deposit.

In 2006, Polyus Gold made a major step forward in the area of exploration and reserves growth. Extensive exploration programme at Natalka deposit in Magadan region resulted in the state listing of 1 500 tonnes (48 m oz) of balance reserves (Russian B+C1+C2). That lead to a 70% increase in Polyus Gold’s mineral resources base to 3 000 tonnes (B+C1+C2) as at 1 January, 2007, compared to 1 758 tonnes as at 1 January, 2006. During 2006 the company also substantially increased its P&P reserves according to the Joint Ore Reserves Committee (JORC), from 25.1 m oz to 50.8 m oz.

In 2006, the Company continued its extensive exploration programme in all regions of operations. The drilling works totaled 163 700 m, compared to 143 000 m in the previous year.

Polyus Gold forecasts its gold sales in accordance with IFRS for the year 2006 to amount to US$739 million, representing a 56% year on year increase.

Commenting on Polyus Gold’s 2006 results the Company’s CEO Evgueni Ivanov said: “2006 was an excellent year for the Company. We met all our targets set for the year, and are well-positioned for taking next steps in implementation of Polyus Gold ambitious growth strategy”.

Source: the official web-site of the company.