OREANDA-NEWS. November 12, 2009. Further to the announcements by JSC “Polymetal” (LSE, MICEX, RTS: PMTL) (“Polymetal” or the “Company”) in relation to the acquisition of a 100% interest in the Varvarinskoye Gold-Copper Mine in Kazakhstan (“Varvarinskoye”), Polymetal announces that the restructuring of Varvarinskoye debt and hedging obligations has been completed, reported the press-centre of Polymetal.

As a result of the restructuring, Varvarinskoye obligations owed to a syndicate of banks including Investec Bank Ltd, Investec Bank Plc, Nedbank Limited and Natixis Bank (collectively, the “Lenders”) are as follows:

(A)     Debt obligations in the principal amount of US83.6 million, comprising of a US34.3 million Export Credit Insurance Corporation, South Africa Loan and a US49.3 million Commercial Loan; and

(B)     Liabilities resulted from crystallization of gold forward sales contracts (entered into historically at a strike price of US574.25 per ounce) in the amount of US166.4 million in present value terms.

The resulting obligations of US250.0 million become due in 2013 (35% of the total) and 2014 (65% of the total) respectively, with interest accruing at a rate of LIBOR + 3% per annum during the term. In addition, a cash sweep mechanism will apply to all free cash flows generated from Varvarinskoye until all the obligations are fully repaid.

Polymetal has provided the Lenders with a corporate guarantee of US90 million, which may be called upon in certain limited circumstances.

“We are pleased to have restructured all Varvarinskoye liabilities within a week after completion of its acquisition”, said Vitaly Nesis, CEO of Polymetal. “As a result, we received very reasonably priced and long term debt with limited recourse to Polymetal as well as full exposure to gold price upside due to Varvarinskoye’s hedge-free status.”