OREANDA-NEWS. On June 04, 2007 Polymetal announced that the exploration license for Annenskoe deposit has been successfully converted into a combined license [exploration and production], reported the press-centre of  Polymetal.

Polymetal is the first company in Russian gold mining sector to convert the exploration license into a combined license through the procedure based on pioneer discovery rights. The compensation for the conversion costs were $US 0,65 mln. to reimburse federal government for state-funded exploration in 1935-2003. The new license is valid till December 31st, 2027.

A successful license conversion at Annenskoe testifies to stability and predictability of Russian mining legislation and serves as a guarantee of continuity of title during exploration. The Company believes that license conversion is also a significant positive development for the Strategic Alliance of Polymetal and AngloGoldAshanti as the Alliance plans considerable investment in early-stage exploration projects in Russia.

Annenskoe license covers area of 11,8 km.2 located in Sukhobuzimsky District of the Krasnoyarsk Territory, 107 km to the east from Krasnoyarsk and 15 km from paved road and 110-kV power line. Annenskoe is located in a highly prospective Yenisei gold belt also hosting such large gold deposits as Veduga (to be contributed to Polymetal-AngloGoldAshanti JV), Olimpiada and Blagodatnoe (both Polyus).

Approved total reserves of Annenskoe deposit in accordance with Russian classification as of 01.06.2006 amount to approximately 10 tonnes of gold (321 Koz) at the average grade of 8,5 g/t. Ore is free-milling and amenable for recovery by gravity separation.

Resource potential of the license area presently estimated at 2 Moz of gold. Further exploration is clearly warranted and by the second quarter of 2009 the company is expected to complete JORC-compliant audit of mineral resources of Annenskoe deposit.

"Conversion of exploration license into combined license at Annenskoe deposit is an important precedent for the industry which was established by our company. This procedure allowed us to receive a long-term license for mining operations without subjecting the title to the property to any risks, — stated Vitaliy Nesis, CEO of Polymetal. — We are very optimistic about Annenskoe’s resource potential, especially in cooperation with the world’s leader in the gold mining industry — AngloGold Ashanti. We hope that in the future out joint venture will further enlarge its presence in the Krasnoyarsk Territory".