OREANDA-NEWS. On December 17, 2007 JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”) announced that Snowden Mining Industry Consultants (“Snowden”) and SRK Consulting (UK) Ltd (“SRK”) have completed resource reviews for Albazino and Nachalnoye-2 respectively, classified in accordance with the 2004 JORC Code, reported the press-centre of JSC “Polymetal”.

Albazino
Snowden undertook an initial review of the Albazino resource, located in the Khabarovsk Territory in the Far East of Russia, in October 2006. The total resource at that time was 6,605Kt at 5,2g/t for 1,1Moz of gold reported above a 2 g/t cut-off grade.

During the next twelve months, Polymetal have completed 12,685 meters of drilling at two out of five ore deposits identified at Albazino. These deposits, Anfisa and Olga, are located at a distance of around two kilometers from each other and display very similar structures and mineralization features.

Snowden subsequently reviewed the October 2007 updated Albazino resource estimates by Polymetal. Snowden considers the Albazino resource to have been prepared in accordance with the 2004 JORC Code and has classified it accordingly.

The complete review is available on the Company’s website. As in the previous year’s review, a cut-off grade of 2 g/t was used for the resource calculation. A less conservative cut-off grade of 0,5g/t results in 24,281Kt at 3,4 g/t for 2,7Moz of gold.

Currently, five drill rigs are working on site and the Company aims to identify a 3Moz of gold resource by the end of 2008. A feasibility study along with an audited reserve calculation complied in accordance with the 2004 JORC Code is expected to be completed in the first half of 2008. A definitive feasibility study together with detailed design drawings should be produced by Polymetal Engineering by the end of 2008.

Albazino mineralization will be concentrated on site and then river-barged 500 kilometers up the Amur River to Amursk, a township with developed infrastructure, where a pressurized oxidation (POX) plant, capable of processing various refractory concentrates from different locations across the Far East of Russia, will be located.

The Company has selected land plots in Amursk, approved by local authorities, for a concentrate stockpile/overload warehouse and POX plant. On December 3, 2007, a long-term land lease agreement was signed between the Amursk municipality and Polymetal.

Polymetal plans that construction of both the Albazino concentrator and Amursk POX plant will start in early 2009 with the first gold pour planned in Q4 2010.

“When we acquired Albazino in July 2006, it was just a small deposit with some upside”, commented Vitaly Nesis, CEO of Polymetal. “It’s partly luck, but mostly it’s our accumulated experience and skill that has made possible such a significant resource addition in such a short period of time. Although the resources we have in place are already sufficient to justify the start of construction, we believe Albazino has a high potential of becoming a world-class asset with 5 to 6 Moz of gold resource at grades that are not common nowadays”.

The information in this Public Report that relates to Mineral Resources of Albazino is based on, and accurately reflects, information compiled by Mr. Michael Andrew of Snowden Mining Industry Consultants and Oleg Valeyev Ph.D., P.Geo of Polymetal Management. Mr. Andrew is a Member of The Australasian Institute of Mining and Metallurgy and Mr. Valeyev is a member of Association of Professional Geoscientists of Ontario.

Messrs Andrew and Valeyev have sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Messrs Andrew and Valeyev consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Nachalnoye-2
In 2006, Polymetal licensed Dukat Flanks (the area immediately adjacent to the Dukat deposit that was considered promising by Soviet geologists but under-explored) and identified eight targets to be drilled with the purpose of providing feed to the expanded processing plant without compromising the Life-of-Mine (“LOM”) of the Dukat deposit.

The Company started drilling at three out of eight targets in 2006 and completed drilling at Nachalnoye-2 in July, when sufficient recourses for the beginning of open-pit mining operations were established. The Company decided not to invest into additional exploration at that stage since it would be cheaper to do so along with mining which will make certain areas at lower levels accessible for core drilling in Q3 2009.

Further details regarding the above mineral resource are included in a sign-off letter from SRK which is available on the Company’s website. Detailed report is currently in preparation and will also be made available on the Company’s website upon receipt from SRK.

According to Polymetal’s estimates, established resources should be sufficient to feed the expanded plant during the ramp-up year of 2009. As the expanded plant is to be commissioned by the end of 2008, open-pit production at Nachalnoye-2 will start in Q4 2008, making the first ore available to be processed in Q1 2009. No additional investment in mining fleet is needed since Nachalnoye-2 is located just two kilometers from the Dukat open pit (in plain view from the waste dump).

“We are excited to receive first resource numbers at Dukat Flanks which were overlooked during Soviet times due to the immense amount of work at Dukat per se”, said Vitaly Nesis, CEO of Polymetal. “We proved our ability to convert targeted exploration effort into resource ounces and we are certain we’ll replicate our Nachalnoye-2 success at other Flanks’ targets already in 2008”.

Two more targets at Dukat Flanks, Perevalnoe and Zvezdnoe, are continuing to be drilled with the results compliant with the JORC code expected to come out in Q4 2008.