On February 7, in Moscow a meeting of the Supervisory Board of ALROSA was held under the chairmanship of its head RF Finance Minister Alexey Kudrin.

The Board voted for the early termination of powers of ALROSA President Alexander Nichiporuk on the ground of his resignation from 9th February, 2007.

The Chairman of the Board Alexei Kudrin expressed profound gratitude to Mr. Nichiporuk for the important imput into ALROSA’s performance on the administrative, production and financial levels. The President of Sakha Vyacheslav Shtyrov on behalf of the Sakha Government and the Republican Parliament (Il Tumen) decorated Mr. Nichiporuk with the Order of Civil Honor, a republican award.

The Board appointed Sergey A. Vybornov as President of ALROSA from 9th February 2007.

The Board also reviewed The Major Guidelines of ALROSA Development for 2006-2015, submitted for approval by the Executive Board. It was pointed out that the guidelines would enable ALROSA to attain the following targets:

• diamond production by ALROSA and ALROSA-Nyurba subsidiary would be stable and in the accounting prices of 2006-2015 is expected to amount to USD 27.3 billion, including USD 12.1 billion in 2006-2015, and USD 15.2 billion in 2011-2015;
• diamond sales by ALROSA and ALROSA-Nyurba in 2006-2015 are expected at 32.4 billion, including USD 14.8 billion in 2006-2010, and USD 17.6 billion in 2011-2015;
• taxable profit of ALROSA in 2006-2015 are expected to amount to RUR 227.5 billion, including RUR 109.8 billion during the first five-year period;
• capital expenditure allowing for the construction and on-the-schedule commissioning of production capacities in 2006-2015 would amount to RUR 185.5 billion, including RUR 98.6 billion during the first five-year period;
• ALROSA free cash flow in 2006-2015 would show a preficit of RUR 47.5 billion, in spite of an expected cash deficit of RUR 9.8 billion due to the implementation of capex programme;
• dividends are planned to grow, with the total amount of dividend payments in 2006-2010 at RUR 24.6 billion, including RUR 10.9 billion in 2006-2010, and 13.7 in 2011-2015.

It was also noted that the Guidelines provide for:

• commissioning of the first start-up complex of the Mir underground mine in 2009 and bringing ithe mine to full production capacity of 1 million tons of ore in 2012;
• bringing to full capacity of the Aikhal underground mine at 500 thousand tons of ore in 2012;
• commissioning of the first start-up complex of the Udachny underground mine with a production capacity of 500 tons of ore in 2011 and bringing the mine to full production capacity of 4 million tons of ore in 2014.

The Board approved the Guidelines for 2006-2015 in general subject to proposed amendments.

The Executive Board was instructed to include into the above document the areas of geographic and sectoral diversification and submit the amended version for final approval in October 2007. The Board also commissioned the management to continue work on sections pertaining to reforming capital construction management and housing and utilities infrastructure reform.

Source: official web-site of the company.