OREANDA-NEWS. September 01, 2010. JSC "Polymetal" (LSE, MICEX, RTS: PMTL) ("Polymetal" or the "Company") is pleased to announce that the first bar of dore metal has been poured today at the Kubaka plant, a year ahead of the original guidance. The bar weighed 168 kilograms and contained approximately 225 ounces of gold and 315 ounces of silver, reported the press-centre of Polymetal.

The Kubaka Carbon-in-Pulp ("CIP") processing plant is currently running in the ramp-up mode at a rate of 1,500 metric tonnes per day (equivalent of approximately 550 Ktpa or 65% of design capacity) and is processing historical low-grade (1.9 g/t gold) stockpiles. Fresh high-grade ore is currently trucked to the plant from Birkachan mine; processing of this ore is planned to commence in October 2010.

"We are very happy to give the second life to Kubaka," said Vitaly Nesis, CEO of Polymetal.

"Kubaka was the first property we acquired while assembling the second generation of our assets. It was a strategic acquisition based on a vision, and we are extremely pleased to see this vision coming true."

BACKGROUND
The Kubaka plant was commissioned in 1997 with the design capacity of 850 Ktpa. In 2006 the plant was put on care and maintenance by Kinross Gold Corporation ("Kinross"), the previous owner of the asset, due to depletion of the Kubaka mine.

Polymetal acquired the mothballed plant from Kinross in 2008 as part of the Kubaka package, which also included four mining licenses and full remote site infrastructure. At the time of completion of the acquisition, the Company announced its plan, inter alia, to restart the plant in 2011.

The Kubaka plant is a central element of the Omolon project, which includes also Birkachan, Sopka Kvartsevaya, Oroch, Tsokol, and Dalniy deposits (the "Omolon Hub").

OMOLON HUB DEVELOPMENT PLAN
During 2010 only ore from Birkachan will feed the plant.

In 2011 it is planned to commence processing of ore from the Sopka Kvartsevaya ("Sopka") deposit that was acquired by Polymetal in 2009. In order to be able to effectively process silver-rich ore from Sopka, an upgrade of the processing plant is required, including installation of Merrill-Crowe and counter-current decantation equipment as well as expansion of the leaching section.

The plant upgrade is expected to be completed in Q3 2011 with the goal to reach the run-rate production at the Omolon Hub of 200 Koz of gold equivalent per annum starting from 2012.

Processing of ore from the Tsokol deposit is planned to commence in 2012, from Oroch - in 2013, and from Dalniy - in 2014.

In addition to processing ore at the Kubaka plant, the Company is planning to heap leach 1.3 Mtpa of low-grade Birkachan ore (1.2 g/t gold) starting from 2011.

Average total cash costs are estimated in the range of USD400-450/oz of gold equivalent for the plant and in the range of USD550-600/oz of gold equivalent for heap leach operations.

Polymetal will further update on the progress of the development of the Omolon Hub.