OREANDA-NEWS. JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”), today announced its US GAAP audited consolidated financial results for the year ended December 31, 2006.

Gold production was 256 thousand ounces in 2006, 5,3% higher than in 2005. Silver production was 17,3 million ounces, down 8,5% due to anticipated lower silver grades at Dukat, Lunnoye, and Khakanja.
 
Revenues increased by 32,1% to $315,6 million. Silver sales accounted for 51% and gold sales - for 48,7% of the total revenues.

Average realized prices were $603,3 per ounce of gold and $9,33 per ounce of silver. The gap between average silver realized and London fixing prices is due to hedging agreements entered into in December 2004 and expiring in November 2007.

Total cost of sales increased by 25,8% to $171,3 million, mainly driven by increases in the volume of ore processed, dollar YoY inflation in Russia of 14%, and increased depreciation. Cash cost of sales (COGS less depreciation and depletion) rose by 18,8% to $131,9 million. Net income grew by 250,5% from $17,6 to $61,7 million.

Adjusted EBITDA increased by 44,4% from $93 to $134,3 million. Adjusted EBITDA margin in 2006 was 42,6% compared with 38,9% in 2005. Audited gold and silver JORC compliant reserves as at December 31, 2006, based on $450 gold and $7 silver prices were, respectively, 3,7 and 416,3 million ounces.

Polymetal defined and started to execute its medium-term growth strategy. Dukat expansion, Voro expansion, and Albazino greenfield mine are expected to produce 50% growth in both gold and silver output by 2010.