OREANDA-NEWS. Unlike average realized price of gold, average realized price of silver ($9.3 per ounce in 2006) was lower than average London fixing price ($11,6 per ounce in 2006).

According to the investor relations department of JSC “Polymetal”, it resulted from the Company’s prior commitment to deliver part of its 2005-2007 silver production to Standard Bank London (“SBL”) at pre-determined prices.

This commitment (“Hedging Agreements”) was imposed by the Syndicated Term Facility Agreement entered into with SBL in December 2004.

Under the Hedging Agreements, for each of the years 2006 and 2007, the Company would have to sell a minimum of 9 million and 13,9 million ounces of silver, respectively, at average prices of $7,81 and $7,79 per ounce.

The last shipment of silver under the Hedging Agreements will occur in November 2007. After that, Polymetal does not plan to enter into any agreements limiting upside potential of gold and silver sales prices.