OREANDA-NEWS. On January 28, 2007 OJSC Polyus Gold (RTS, MICEX and LSE - PLZL), Russia’s leading gold producer, today announces that its Board of Directors on a meeting approved the feasibility study for Verninskoye project in Irkutsk region and reviewed pre-feasibility study for Natalka project in Magadan region. Those two projects are included into the company’s strategy designed till 2015, reported the press-centre of Polyus Gold.

The licence holder for Natalka deposit is OJSC Matrosov Mine, a subsidiary of Polyus Gold. In September 2007 Polyus Gold completed the international reserves audit of Natalka deposit in accordance with JORC standards, MICON International acting as the auditor. Natalka JORC reserves amounted to 40,8 m oz at the average grade 1,13 g/t.

The Board of Directors of Polyus Gold decided to continue the preparation of pre-feasibility study of Natalka project and approved the capital expenditure for the project for 2008 in the amount of 813 million rubles (US$ 31,3 million). Out of that amount, 226 million rubles (US$ 8,7 million) will be allocated on the completion of Natalka mine feasibility study, and another 366 million rubles (US$14 million) will be spent on installation of a pilot plant on the deposit in May this year.

Commenting on the event General Director of Polyus Gold Evgueni Ivanov said that the launch of the project is expected ahead of schedule, in 2012-2013. Natalka mine is going to become the largest gold mine in Russia with annual capacity of 40 million tonnes of ore and annual gold production of over 40 tonnes (1,3 m oz), which is higher than initially planned. Total investments into the project will amount to US$2,5 billion.

“We are expecting that our inquiry for state financing of infrastructure development in the area of Natalka will be soon considered by the State Investment Fund”, - Mr. Ivanov added.

The licence holder for Verninskoye is OJSC Pervenets (included into LZRK ltd., a subsidiary of OJSC Polyus Gold). Verninskoye is located in Bodaibo district of Irkutsk region. Verninskoye reserves (Russian C1+C2) have been increased from 47 tonnes (1,5 m oz) to 107 tonnes (3,4 m oz) at 3,7 g/t following the exploration programme.

According to the approved feasibility study, the project will be launched in 2010. The ore to be processed at the deposit in 2010 will amount to 1,6 million tonnes, and in 2011 that will be increased to 2,2 million tonnes per annum. Gold production in 2010 will amount to 4,8 tonnes (154 k oz) and in 2011 will increase to 6,4 tonnes (206 k oz).

Total investments (excluding exploration expenses and the cost of the licence) in 2005 – 2011 will amount to 5,4 billion rubles (US$208 million) (not including VAT). Evgueni Ivanov noted that the company had substantially increased the project mill capacity to 2,2 million tonnes of ore. The construction of key infrastructure facilities for Verninskoye had been completed. And the experience acquired during Zapadnoye mine development will be valuable for Vernisnkoye project, located in the same region.

The Board of Polyus Gold also approved a list of key targets for the year 2008.