OREANDA-NEWS. July 31, 2008. Evraz Group S.A.(LSE: EVR) (“Evraz”) today announced the signing of a Co-operation Agreement with China Metallurgical Group Corporation (“MCC”) for the joint development of the Cape Lambert Iron Ore Project (“the Project”) located in the Northern coastal Pilbara region of Western Australia.

The Project comprises a 1.56 billion tonne JORC compliant magnetite iron ore resource with a projected annual output of 15 million tonnes of magnetite concentrate and is at feasibility stage.

Evraz and MCC will jointly invest in the development of the Project with Evraz having a 75% and MCC a 25% economic interest in the Project. It is anticipated that all of the Project’s iron ore will be shipped to China to meet the requirements of Chinese mills, while MCC will be entitled to sign an off-take agreement for up to 60% of the iron ore volumes.

The new Joint Venture will benefit from a combination of the extensive magnetite mining and production expertise and financial resources of the two parent companies, Evraz and MCC. Evraz has considerable experience in processing magnetite ore to make significant volumes of pellets and fines. MCC will bring its expertise in EPC (provision of engineering design services, procurement and construction), based on its access to the best engineering processes, technologies and equipment in China and worldwide.

Evraz’s participation in the Joint Venture is subject to FIRB approval in Australia.

Merrill Lynch is acting as financial adviser and Blake Dawson is acting as legal adviser to Evraz.