OREANDA-NEWS. On July 25, 2007 JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”), announced its production results for the quarter ended June 30, 2007, reported the press-centre of Polymetal.

In Q2 2007, Polymetal silver production increased by 3% while gold production decreased by 1% compared to Q2 2006, as planned grade decreases were mostly outweighed by a 20% increase in processing volumes and improved recoveries.

Processing plants at Lunnoye, Khakanja, and Voro (CIP) all have had record quarterly throughputs.

The Company remains on track to produce, in line with previous guidance, 16-18 Moz of silver and 230-250 Koz of gold in full year 2007.

Total cash costs (co-product basis) at silver operations (Dukat and Lunnoye) are expected to be approximately $5,5-6 per ounce of silver for FY 2007. Total cash costs (co-product basis) at gold operations (Voro and Khakanja) are expected to be around $330-360 per ounce of gold for FY 2007. 1H costs per ounce have been negatively influenced by weak Q1 production results and the Company expects 2H costs per ounce to be lower than 1H costs per ounce.

“Polymetal operations in the second quarter were able to improve significantly compared with a relatively weak first quarter,” said Vitaly Nesis, CEO of Polymetal, commenting on the results. “I am confident that positive production dynamics will continue in the second half of 2007 as we concentrate on operational improvements at our sites”.

CHANGE OF US GAAP AUDITOR
According to the best international practice of changing auditors regularly, Polymetal has decided to replace PricewaterhouseCoopers, its auditor in 2002-2006, with Deloitte & Touche.
Polymetal would like to thank PWC for the highest quality of audit services provided by the firm during the entire period of cooperation.

HEDGING AGREEMENTS
In 1H 2007, 6,5 Moz of silver was delivered into forward sales contracts at below-market prices. As of today, the amount of silver to be delivered under the hedging agreements equals 6,4 Moz.
The last shipment of silver under the hedging agreements is expected to occur in November 2007. After that, Polymetal does not plan to enter into any agreements limiting upside potential of gold and silver sales prices (the gold production is currently fully unhedged).

PERSONNEL
Sergey Antipin, previously MD of Khakanja (Dec 2003 — Jun 2007) and Lunnoye (Jun 2002 — Dec 2003), was appointed MD of Albazino. Mr. Antipin brings to the project extensive experience in developing green-field mines and strong expertise in construction and logistics of large projects in challenging locations.

Gennady Kuzmenko, previously deputy MD-human resources at Dukat and Lunnoye (Feb 2004 — Jun 2007), was appointed MD of Khakanja. Polymetal is confident that Mr. Kuzmenko, known as an experienced and professional manager, will contribute considerably to the future success of the Company.

1H 2007 FINANCIAL RESULTS
1H 2007 financial results are expected to be released on Thursday, September 27, 2007.