Polus · RUS:PLZL

Polus — Polyus — Adam Smith International Summit on the CIS Precious Metals and Stones 2006

17 slides from Polus's conference presentation, Feb 13, 2006

  1. Slide 1: What Drives Gold Mining in Russia

    WHAT DRIVES GOLD MINING IN RUSSIA Adam Smith International Summit on the CIS Precious Metals and Stones 13-14 February 2006

  2. Slide 2: Disclaimer

    DISCLAIMER 9 The information contained herein has been prepared using information available to Polyus Group at the time of preparation of the presentation. External or other factors may have impacted on the business of Polyus Group and the content of this presentation, since its preparation. In addi

  3. Slide 3: Russia: The Driving Force of Gold Mining

    RUSSIA: THE DRIVING FORCE OF GOLD MINING

  4. Slide 4: Russia's Growth Potential

    RUSSIA’S GROWTH POTENTIAL… World’s no 2 reserve base** World’s No 6 gold producer (mln. oz) * (mln. oz) South Africa 1 157 South Africa 9,6 482 Russia Australia 8,1 Australia 193 USA 8 China 132 China 7,2 Pery 5,6 Peru 132 Russia 5,3 USA 119 Canada 113 0 2 4 6 8 10 12 Indonesia 90 UNIQUE GROWTH POTE

  5. Slide 5: Still There Are Signs of Stagnation in the Industry

    … STILL THERE ARE SIGNS OF STAGNATION IN THE INDUSTRY 9 Growing gold production in Russia in 2000 - Gold Production, 2000-2005, tonnes 2003 reaching 170 tonnes in 2003. 9 The main growth factor – growing rock gold production (its share grew from 39% to 56% 168 170 169 168 in the total gold productio

  6. Slide 6: Incentives for the Industry Development

    INCENTIVES FOR THE INDUSTRY DEVELOPMENT 9 Raising state investments in gold producing regions infrastructure (power lines, roads, bridges). 9 Simplification of the licensing procedure, creating a unified exploration and production license to attract more investments into exploration. 9 Simplificatio

  7. Slide 7: State Regulation: Positive Signs

    STATE REGULATION: POSITIVE SIGNS Meeting on Russian gold mining development in Magadan, November 2005 Key decisions: ; Changes in taxation approved (royalty differentiation) aimed to raise the investment appeal of deposits in remote and undeveloped regions. ; Support the proposal to reduce VAT for g

  8. Slide 8: Polyus: The Largest Projects of the Industry Leader

    POLYUS: THE LARGEST PROJECTS OF THE INDUSTRY LEADER

  9. Slide 9: Polyus: No 1 Exploration Budget in the Industry

    POLYUS: NO 1 EXPLORATION BUDGET IN THE INDUSTRY Raising investments into exploration, 2005: Blagodatnoye: the breakthrough mln. rub. Discovery in Russian gold mining 3000 Addition to reserve base: 2500 222,4 tonnes of gold 2000 ƒ The largest exploration project in recent 10 years that resulted in su

  10. Slide 10: Olimpiada Expansion

    OLIMPIADA EXPANSION Raising sulfide ore processing capacity to 8 mln. tonnes per year. 9 Construction of Mill-3 will increase sulfide ore processing from the current 3 mln. tons per year to 8 mln. tons in 2008 9 Expansion of Vostochny and Zapadny pits to engage new stocks of sulfide ore Organic grow

  11. Slide 11: Olimpiada Expansion: Investments

    OLIMPIADA EXPANSION Investments totaling $ 337, including VAT and working capital 2005 2006 2007 2008 ƒ CONSTRUCTION OF MILL-3 $139 mln. ƒ PITS EXPANSION $69 mln. ƒ UPGRADING EXISTING $35 mln. PRODUCTION FACILITIES $10 mln. ƒ ROAD CONSTRUCTION ƒ RESIDENTIAL BUILDINGS $9 mln. 92007 - Mill-3 start up

  12. Slide 12: Natalka: Center of Exploration

    NATALKA: CENTER OF EXPLORATION 9 Discovered additional 18.51 mln. oz of resources below 600 meters at a grade of 1.59 g/t. 9 Estimated total resources (Russian B+C1+C2) – 51.83 mln. oz. 9 Exploration cost for B+C1 reserves amounted to $2.5 per oz (well below world’s average) 9 A new ore body Vostoch

  13. Slide 13: Creating a Blue Chip: From Polyus to Polyus Gold

    CREATING A “BLUE CHIP”: FROM POLYUS TO POLYUS GOLD

  14. Slide 14: 2005: Meeting the Targets

    2005: MEETING THE TARGETS ƒ Market value – up to $8 bln. STRATEGIC OBJECTIVES 2010-2012 ƒ Annual production – up to 3.2 mln. oz of gold. ƒ Proven & probable reserves – up to 70.7 mln. oz of gold. ƒ Total cash costs – $220-240 per oz. 2005 plan Meeting the targets • Commercial reserves >900 tonnes. 9

  15. Slide 15: 2005: Reserves Doubled, Production Maintained

    2005: RESERVES DOUBLED, PRODUCTION MAINTAINED 33.8 tons 33.5 tons > 1% (1.085 mln. oz) (1.076 mln. oz) Production 2004 2005 Commercial Reserves Russian B+C1+C2 1758 tonnes 800 tonnes 2004 2005

  16. Slide 16: Polyus Gold: Strong Market Confidence

    POLYUS GOLD: STRONG MARKET CONFIDENCE The market cap is approx. $6.5 billion with a bullish outlook Estimated share price, US$ 35.4 40,00 (Troika Dialog) 35,00 24.7 30,00 (RenCap) 25,00 20,00 28.3 (CSFB) 15,00 22.4 19.9 10,00 (Citigroup) (Merrill Lynch) 5,00 0,00 05 05 05 5 05 06 05 t0 ly g n c pt v

  17. Slide 17: Spin-off Under Way: Key Transaction Dates

    SPIN-OFF UNDER WAY: KEY TRANSACTION DATES ; Norilsk EGM unanimously voted for the spin-off 30 September of Polyus. 2005 ; Record date to receive Polyus Gold shares 1 January 2006 Organizational meeting of the new company - 3 March Polyus Gold 2006 State registration of Polyus Gold March 2006 Trading

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