OREANDA-NEWS. OJSC Polyus Gold today released consolidated financial statements of OJSC Polyus Gold and its subsidiaries (the “Group”) for the 6 months ended 30 June 2006, prepared in accordance with International Financial Reporting Standards (“IFRS”).

The financial statements for the 6 months 2006 have been reviewed in accordance with International Standard for Review Engagements by Deloitte & Touche.

For the first half of 2006 the Group’s sales revenue increased by US$ 128 million (76%) compared to the first half of 2005 and amounted to US$ 297 million. Such a remarkable increase was made possible by a 27% rise in sales volume, primarily due to consolidation of sales revenues from OJSC Aldanzoloto GRK (Aldanzoloto) and OJSC South Verkhoyansk Mining Company (SVMC) that were acquired in September 2005. The other contributing factor was a 38% increase in the average gold selling price from US$ 428/Oz in the first six months of 2005 to US$ 590/Oz in the first half of 2006.

Cost of gold sales in the first half of 2006 increased by US$ 75 million (82%) compared to the first half of 2005 and amounted to US$ 166 million.

Key factors responsible for this increase are consolidation of costs from Aldanzoloto and SVMC, as well as 9% growth in sulphide ore processing at Olimpiada mine, which lead to additional fuel, consumables and spares costs.

In the first half of 2006 Group’s operating profit grew by US$ 39 million (72%) and amounted to US$ 93 mln, which results from growing revenue from gold sales.

Group’s profit for the period in the first half of 2006 increased by US$ 983 million compared to the same period of the previous year and amounted to US$ 1 031 million. This outstanding growth is mostly due to US$ 980 million gain received by the Group from the sale of a 20% stake in Gold Fields (South Africa) in March 2006.

Net cash flow from Group’s operating activities in the first six month of 2006 increased by US$ 49 million compared to first half of 2005 and amounted to US$ 35 million. This growth is explained primarily by increased gold sales revenue.