OREANDA-NEWS. On August 20, 2009 JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”) announced that a meeting of the Board of directors of the Company (the “Board”) held on August 19, 2009 by absentee voting determined the price for 84,375,000 additional ordinary shares to be placed by the Company (the “New Shares”) and the value of the property that can comprise the consideration for the New Shares, reported the press-centre of Polymetal.

PLACEMENT PRICE
As previously announced by Polymetal, the Company has commenced a process to increase its share capital by placing the 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 (“RK”);

 No more than 66,875,000 New Shares minus the New Shares purchased by the persons entitled to pre-emptive rights – to JSC “Polymetal Management”, a 100% subsidiary of Polymetal.

The prospectus in relation to the issuance of the New Shares was registered by the Federal Financial Markets Services of Russia on August 13, 2009)

The Board determined that the New Shares will be placed (including placement to the persons entitled to pre-emptive rights) at a price of 278 Russian roubles per New Share. The Board also determined the monetary value of the property that can comprise the consideration for the New Shares. Specifically, 25% of RK was valued at 695,000,000 Russian roubles (based on the fact that 100% of RK was valued at 2,780,000,000 Russian roubles) and each share of “Ayax” was valued at 58,023.04 Russian roubles.

Placement of the New Shares by way of a closed subscription will start after expiration of the period during which eligible shareholders will be able to exercise their pre-emptive rights and will finish at the earliest of (i) the 30th working day from the start date of placing the New Shares or (ii) the date of placing the last of the New Shares.

PREEMPTIVE RIGHTS IN RELATION TO THE NEW SHARES
Under Russian law, shareholders who voted ‘against’ or did not vote in relation to resolution 2 (to approve the placement of the New Shares) at the Extraordinary General Meeting held on June 19, 2009 (“EGM”) are entitled to pre-emptive rights to acquire New Shares of Polymetal in proportion to the number of shares in the Company they held as at the record date (May 14, 2009) at the price determined by the Board, i.e. at 278 Russian roubles per New Share.

Eligible shareholders will be able to exercise their pre-emptive rights within 45 days after the Notice of pre-emptive rights (the “Notice”) (i) is published on the newswire of the AK&M or Interfax news agencies, (ii) is published on the Company’s website at www.polymetal.ru, and (iii) is sent to each person entitled to the pre-emptive rights by registered mail (or by personal delivery against his signature). If the above mentioned means of communicating the Notice are not made on the same day, applications to purchase New Shares by exercising pre-emptive rights should be submitted not later than 45 (forty five) days following the latter of the above methods.

PREEMPTIVE RIGHTS IN RELATION TO GLOBAL DEPOSITARY RECEIPTS
Eligible holders of Global Depositary Receipts (“GDRs”) representing Polymetal’s ordinary shares who instructed Deutsche Bank Trust Company Americas (the “Depositary”) to vote ‘against’ resolution 2 at the EGM or did not instruct the Depositary to vote in relation to this resolution, may instruct the Depositary to take up New Shares and to issue to such eligible holders additional GDRs representing such New Shares on the basis to be set out in a corporate action notice to GDR holders.

Polymetal will continue to provide updates on the progress of the New Shares issuance process in due course.