RNS Number:8838Q

JSC Polymetal07 February 2007 Not for release, publication or distribution in the United States, Australia, Canada or Japan 7 February, 2007 JSC POLYMETAL OFFER PRICE SET AT us$ 7.75 PER SHARE/GDR MARKET CAPITALISATION OF us$2.44 BILLION

JSC Polymetal (the "Company"), the world's largest primary silver producer and

Russia's third largest gold producer, today announces that the offer price forits Initial Public Offering (the "Global Offering") has been set at US$7.75 foreach ordinary share and global depositary receipt (GDR). This implies a marketcapitalisation at pricing of approximately US$2.44 billion.

The Global Offering comprises 38.0 million existing ordinary shares in the formof ordinary shares and GDRs (excluding the exercise of the over-allotmentoption) and 40 million new ordinary shares in the form of GDRs, with one GDRrepresenting an interest in one ordinary share. The existing shares are beingoffered by Nafta Moskva (Cyprus) Limited (the "Selling Shareholder"), part of aleading Russian financial investment group. The Global Offering representsapproximately 24.8 per cent of the Company's issued ordinary share capital,after giving effect to the total Global Offering.

The Selling Shareholder has granted an over-allotment option to Deutsche Bank AG

London Branch, Merrill Lynch International and UBS Limited as Joint Bookrunners,exercisable for a period of up to 30 days from today, to purchase or procurepurchasers for up to 10.0 million additional GDRs.

The ordinary shares and GDRs have been placed with a broad range ofinstitutional investors following an international roadshow. The preliminaryprospectus was published on 24 January 2007.

Conditional dealings will commence on the London Stock Exchange today under theticker symbol PMTL. Admission and commencement of unconditional dealings on the

London Stock Exchange are expected to take place on 12 February 2007.

Commencement of trading on RTS and MICEX is currently expected to take place onor about 7 and 9 February 2007, respectively.

Deutsche Bank AG London Branch, Merrill Lynch International and UBS Limitedacted as Joint Bookrunners for the offering, with RBC Capital Markets acting as

Co-Lead Manager.

Commenting on today's announcement, Vitaly Nesis, Polymetal's CEO, said:"Polymetal's compelling investment case has proved to be very attractive toinstitutional investors. The combination of our impressive portfolio of highquality silver and gold assets, with low cash costs, plus our track record ofdeveloping greenfield sites into active mines and strong exploration anddevelopment pipeline has been instrumental in achieving an over-subscribed IPO.

We look forward to keeping our new shareholders updated on progress inimplementing our growth strategy."2006 Production results overview

The 12 month results for 2006 show a 4% decrease in mined ore to 2,600,000tonnes compared with the same period in 2005. This decrease was primarily due toa 6% drop in open pit mined ore to 2,113,000 tonnes. At the same time, oremined from underground operations increased 5% to 487,000 tonnes. This increasewas primarily due to higher mined volumes at the Company's flagship Dukat mine.

Processed ore increased 15% for 2006 (compared to 2005) to reach 2,890,000tonnes. This increase can primarily be attributed to two factors: the increasein production capacity from 500k to 600k tpa at Khakanja and production growthat Voro's Stage II (primary ore processing). During the 12 months of 2006, goldproduction rose 5% to 256 th. oz. Again this was primarily due to increasedgold production at Voro, as a result of increased processing capacity at stage

II of the plant. The Company's silver production declined 9% in the reportedperiod to 17.3 mln. oz. This was due to lower average head grades at the Lunnoyeand Khakanjinskoye deposits.

For more information please contact.

Polymetal

Bree Schuette, Director of International Investor Relations +7 911 777 1804email: bschuette@polymetal.ru

Website: www.polymetal.ru

Financial Dynamics

Jon Simmons +44 207 831 3113

Michael Guerin +7 495 795 0623

GLOBAL OFFERING STATISTICS

Offer price per ordinary share/GDR $7.75

Market capitalisation at pricing $2.44 billion

Number of existing ordinary shares sold in the Global Offering (offered as shares or GDRs) 38.0 million

Number of new ordinary shares sold in the Global Offering (offered as GDRs) 40.0 million

Number of ordinary shares in issued share capital, after giving effect to the total Global 315.0 million

Offering

Gross proceeds of the Global Offering receivable by the Selling shareholder $294.5 million

Gross proceeds of the Global Offering receivable by the company $310.0 million

Number of GDRs subject to the over-allotment option 10.0 million

Note to editors:

Polymetal is a market leader in the global silver industry and a recognisedleader in the Russian gold industry. The Company is vertically integrated andis engaged in production and exploration, and has an engineering, as well as alogistics and maintenance subsidiary.

Polymetal's key strengths include:* proven development and operational track record* its position as a leading precious metals producer* exceptional mine portfolio with low cash costs* in-house geological and engineering expertise* attractive growth pipeline of development and exploration projects* experienced management team and highly skilled employees.

Polymetal's strategy is to create shareholder value by continuing to consolidateand strengthen its position as a leading precious metals producer whilemaintaining an attractive profitability profile. Key elements of this strategyinclude maintaining profitability while increasing production at existingoperations; acquiring new exploration licences and development projects;continuing to commission new mines and develop exploration projects; maximisingbenefits from the strategic alliance with AngloGold Ashanti; and focusing oncontinuous development of the Company's human capital.***

This press release does not constitute or form part of any offer or invitationto sell, or any solicitation of any offer to purchase nor shall it (or any partof it) or the fact of its distribution, form the basis of, or be relied on inconnection with, any contract therefor. The offer and the distribution of thispress release and other information in connection with the listing and offer incertain jurisdictions may be restricted by law and persons into whose possessionany document or other information referred to herein comes should informthemselves about and observe any such restriction. Any failure to comply withthese restrictions may constitute a violation of the securities laws of any suchjurisdiction.

Any purchase of or application for the securities referred to herein should onlybe made on the basis of the information contained in the final prospectus to beissued in connection with the Offering. The price and value of, and incomefrom, such securities may go up as well as down. Persons needing advice shouldconsult a professional adviser.

These materials are not an offer for sale of any securities in the United

States. Securities may not be offered or sold in the United States absentregistration or an exemption from registration under the U.S. Securities Act of1933, as amended. The issuer of any securities referred to herein has notregistered, and does not intend to register, any portion of the offering in the

United States, and does not intend to conduct a public offering of anysecurities in the United States.

This document is only being distributed to and is only directed at (i) personswho are outside the United Kingdom or (ii) to investment professionals fallingwithin Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and otherpersons to whom it may lawfully be communicated, falling within Article 49(2)(a)to (d) of the Order (all such persons in (i), (ii) and (iii) above togetherbeing referred to as "relevant persons"). The Securities are only available to,and any invitation, offer or agreement to subscribe, purchase or otherwiseacquire such securities will be engaged in only with, relevant persons. Anyperson who is not a relevant person should not act or rely on this document orany of its contents. Stabilisation/FSA.

This document is an advertisement and is not a prospectus for the purposes of

Directive 2003/71/EC (such Directive, together with any applicable implementingmeasures in the United Kingdom under such Directive, the "Prospectus

Directive"). A prospectus prepared pursuant to the Prospectus Directive isintended to be published, which, when published, can be obtained from the

Company. Investors should not subscribe for any securities referred to in thisdocument except on the basis of information contained in the prospectus.

In any EEA Member State that has implemented the Prospectus Directive, thiscommunication is only addressed to and is only directed at qualified investorsin that Member State within the meaning of the Prospectus Directive.

This press release is not a public offer or advertisement of securities in the

Russian Federation, and is not an offer, or an invitation to make offers, topurchase, sell, exchange or transfer any securities in the Russian Federation orto or for the benefit of any Russian person or entity. Information contained inthis document is not an offer, or an invitation to make offers, sell, purchase,exchange or transfer any securities in Russia or to or for the benefit of any

Russian person, and does not constitute an advertisement of the securities in

Russia. The GDRs have not been and will not be registered in Russia and are notintended for "placement" or "circulation" in Russia.

Joint Global Coordinators and Joint Bookrunners are acting for the Company andthe Selling Shareholder in connection with the listing and offering and for noone else and will not be responsible to anyone other than the Company and the

Selling Shareholder for providing the protections afforded to customers of thebookrunners or for providing advice in relation to the listing, offering, thecontents of this announcement or any matters referred to herein.*** Not for release, publication or distribution in the United States, Australia, Canada or Japan ***

This release includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by theuse of forward-looking terminology, including the words "targets", " believes","expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or"should" or similar expressions or, in each case their negative or othervariations or by discussion of strategies, plans, objectives, goals, futureevents or intentions. These forward-looking statements all include matters thatare not historical facts. By their nature, such forward-looking statementsinvolve known and unknown risks, uncertainties and other important factorsbeyond the Company's control that could cause the actual results, performance orachievements of the Company to be materially different from future results,performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptionsregarding the Company's present and future business strategies and theenvironment in which the Company will operate in the future. Forward-lookingstatements are not guarantees of future performance. Many factors that couldcause the Company's actual results, performance or achievements to differmaterially from those expressed in such forward-looking statements. Theseforward-looking statements speak only as at the date of this release. The

Company expressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained herein toreflect any change in the Company's expectations with regard thereto or anychange in events, conditions or circumstances on which any such statements arebased. This information is provided by RNS The company news service from the London Stock Exchange

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