OREANDA-NEWS. March 26, 2008 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced today that it has reached an agreement on the terms of a recommended cash offer to be made by Mechel for the entire issued and to be issued share capital of Oriel Resources plc.

MECHEL OAO

RECOMMENDED CASH OFFER FOR ORIEL RESOURCES PLC

Summary
 The boards of Mechel OAO (Mechel) and Oriel Resources plc (Oriel) are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Mechel for the entire issued and to be issued share capital of Oriel (the Offer).
Under the terms of the Offer, Oriel Shareholders will receive 219.86 US cents in cash for each Oriel Share which, based on an exchange rate of 1.9992 US\\\$:GBP, being the rate as at the close of business on 25 March 2008, is equivalent to 109.97 pence per Oriel Share.
The Offer values the entire issued and to be issued share capital of Oriel at approximately US\\\$ 1,498 million (Ј749 million).
 The Offer represents a premium of approximately:
13.7 per cent. to the average closing middle market price of 96.75 pence per Oriel Share on 29 February 2008, being the last Business Day prior to Mechel’s announcement that it was contemplating an offer; and
90.2 per cent. to the average closing middle market price of 57.83 pence per Oriel Share for the six-month period prior to the same date.
A currency exchange facility will be made available to Oriel Shareholders under which they will be able to elect to receive their consideration in pounds sterling at a WM/Reuters spot GBP/USD fixing rate on the date three Business Days before the relevant payment date. No commission will be charged for using this facility.
The Oriel Directors, who have been so advised by Canaccord Adams, consider the terms of the Offer to be fair and reasonable and unanimously recommend that Oriel Shareholders accept the Offer. In providing its advice, Canaccord Adams has taken into account the commercial assessments of the Oriel Directors.
Mechel has received irrevocable undertakings to accept (or procure the acceptance of) the Offer from certain Oriel Shareholders in respect of, in aggregate, 296,698,351 Oriel Shares, representing 46.6 per cent. of the issued share capital of Oriel. These undertakings remain binding in the event of a competing offer being made for Oriel.
Mechel is a low-cost integrated mining and metals group with three main divisions: mining, steel production and processing and power generation. Mechel has facilities in Russia, Romania, Bulgaria and Lithuania. The mining division comprises the production and sale of coking and steam coal, iron ore concentrate and ferronickel. A proportion of the production from the mining division supplies Mechel’s other divisions. Mechel is the largest producer of coking coal in Russia, with a 64 per cent. market share for hard coking coals, and Russia’s largest exporter of coking coal concentrate. Mechel also controls 20 per cent. of the coal washing capacity in Russia. Mechel’s steel business comprises the production and sale of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products, ferrosilicon and value-added downstream metal products including hardware, stampings and forgings. Mechel is the second largest producer of long products in Russia, and the largest producer of specialty steels and alloys in Russia, producing 39 per cent. of total Russian specialty steel output. Mechel’s energy business comprises power generation in Russia, a 49 per cent. stake in a Bulgarian coal-fired power station (Rousse) and a power sales company, which controls approximately 50 per cent. of the energy market in the Kemerovo region of Siberia.

In its audited accounts for the year ended 31 December 2006, Mechel reported profit before taxation of US\\\$865 million (Ј433 million) on revenue of US\\\$4,398 million (Ј2,200 million) and had total assets as at 30 September 2007 of US\\\$5,703 million (Ј2,853 million). Mechel is a Russian company, headquartered in Moscow and has been listed on the New York Stock Exchange since October 2004. As at 25 March 2008, Mechel had a market capitalisation of approximately US\\\$16.8 billion (Ј8.4 billion).
Oriel is a London-based chrome and nickel mining and processing company which was admitted to trading on AIM in March 2004 and listed on the Toronto Stock Exchange in February 2005. Subsequent to a reverse takeover in December 2006, the newly-formed Oriel continued to be listed on the Toronto Stock Exchange and was re-admitted to AIM on 7 December 2006.

Oriel’s main countries of operation are Kazakhstan and Russia. Its current operations are the Voskhod chromite mine and the Shevchenko nickel project, both located in north western Kazakhstan, and the Tikhvin ferrochrome smelting plant in Russia.

Oriel’s mining and processing assets have a strong strategic fit with Mechel and the Offer is an integral step in Mechel’s strategy for developing its ferroalloy division (one of the key growth areas for Mechel). In addition, Oriel offers Mechel the opportunity to further augment its integrated business model of owning mining and steel production assets. The enlarged group will derive benefits from economies of scale; Mechel intends to continue to integrate recent acquisitions, in particular by implementing improvements in working practices and operational methods at previously acquired operations.
The Offer is conditional on the receipt of anti-trust clearances in Russia and Kazakhstan.

Commenting on the Offer, Igor Zyuzin, Chief Executive Officer of Mechel, said:

“We continue to implement our strategy to improve the efficiency of our steel division. The acquisition of Oriel will enable Mechel to increase its competitiveness by expanding the existing ferroalloy business, entering new markets and operating new production facilities. We believe the Offer provides Oriel Shareholders with a significant premium to the long-term share price of Oriel and offers Oriel and its employees the opportunity of becoming part of Mechel’s integrated mining and metals operations.”

Commenting on the Offer, Sergey Kurzin, Executive Chairman of Oriel, said:

“In the four years since Oriel’s foundation, it has managed to build a valuable portfolio of significant ferroalloy assets. Nevertheless we believe that the Offer from Mechel provides an attractive opportunity for Oriel Shareholders to realise their investment.”

The Offer Document and the Form of Acceptance will be posted to Oriel Shareholders (and, for information only, to Oriel Optionholders and Oriel Warrantholders) today.

Copies of the Offer Document and the Form of Acceptance will be available from Computershare Investor Services PLC at Corporate Actions Projects, Bristol, BS99 6AH, United Kingdom, and from Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ, United Kingdom.

This summary should be read in conjunction with the full text of the attached announcement and the appendices. Certain terms used in this summary and the attached announcement are defined in Appendix IV.

Merrill Lynch is acting exclusively as financial adviser and corporate broker to Mechel in respect of the Offer. Allen & Overy LLP is acting as legal adviser to Mechel.

Cannaccord Adams is acting exclusively as financial adviser, nominated adviser and corporate broker to Oriel in respect of the Offer. Norton Rose LLP is acting as legal adviser to Oriel.