OREANDA-NEWS. On June 29, 2009 further to the announcement by JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”) on May 14, 2009 in relation to the launch of a new share issuance and the announcement on June 19, 2009 in relation to the results of the Extraordinary General Meeting of shareholders of the Company, Polymetal announced that a meeting of the Board of directors of the Company (the “Board”) held on 26 June 2009 in the form of absentee voting approved a “Decision to issue additional securities” and a “Securities prospectus” in relation to 84,375,000 additional ordinary shares of the Company (the “New Shares”), reported the press-centre of Polymetal.

In addition, the Board approved a resolution to place 5,000,000 bonds with a nominal value of 1,000 roubles each and with a tenor of 1,092 days from the date of commencement of placement of the bonds (the “Bonds”) and approved a ”Decision to issue securities” and a “Securities prospectus” in relation to the Bonds.

NEW SHARE ISSUANCE
It is planned that the share capital of the Company will be increased by placing New Shares by way of a closed subscription in the following way:

No more than 7,500,000 New Shares – in exchange for 35,934 shares in CJSC “Artel of prospectors “Ayax” a company holding the mining license for the Goltsovoye silver deposit (“Ayax”) (which equates to 89.6% of the issued share capital of Ayax; the remaining 10.4% stake in Ayax is already owned by Polymetal);

No more than 10,000,000 New Shares – in exchange for 100% of OOO “Rudnik Kvartsevyi”, a Russian company holding the mining licenses for the Sopka Kvartsevaya and Dalniy gold-silver deposits;

No more than 66,875,000 New Shares – to JSC “Polymetal Management”, a 100% subsidiary of Polymetal and to Polymetal shareholders who elect to exercise their pre-emptive rights to acquire shares.

The price of placement of the New Shares and the value of the property that can comprise the consideration for the New Shares will be determined by the Board after the New Share issuance is registered by the Federal Financial Markets Services (“FSFR”) in accordance with Russian law, which requires filing of both the “Decision to issue additional securities” and the “Securities prospectus” in relation to the New Shares approved by the Board with FSFR.

The Company is planning to file both documents with FSFR in the next few days. It will take a minimum of 30 days from the date of filing of the documents to register the New Share issuance.
Polymetal will provide updates on the progress of the new share issuance process and details about how pre-emptive rights to acquire New Shares may be exercised by eligible shareholders in due course.
 
PROPOSED BOND PLACEMENT
Since approximately half of the Company’s bank loans are short term and are denominated in Russian roubles and the market conditions for rouble denominated public debt in Russia are improving, the Board has made a decision to place the Bonds in order to prepay part of outstanding bank loans and thus improve the duration and cost of the Company’s debt.

The Board approved a resolution to place 5,000,000 bonds with a nominal value of 1,000 roubles each and with a tenor of 1,092 days from the date of commencement of distribution of the bonds. It is planned that the Bonds will be placed by way of an open subscription at nominal value, and the coupon rate (coupon to be paid out quarterly) will be determined during the course of marketing of the Bonds. It is intended that the Bonds will have early repayment options in favor of the Bond holders and/or the Company. It is also intended that the Bonds will be guaranteed by JSC “Polymetal Management”, a 100% subsidiary of Polymetal.

The Board has also approved a ”Decision to issue securities” a “Securities prospectus” in relation to the Bonds. These are the documents that need to be filed with the FSFR in order to register the issuance. The Company is planning to file both documents with the FSFR in the next few days. It will take a minimum of 30 days from the date of filing of the documents to register the Bond issuance.