OREANDA-NEWS. July 09, 2010. The boards of KazakhGold and Polyus Gold announced the Proposed Combination, which, if completed, would result in KazakhGold acquiring all or substantially all of the issued share capital of Polyus Gold, currently the indirect controlling shareholder of KazakhGold.

The Proposed Combination is to be effected through a series of transactions including a conditional Private Exchange Offer to be made by KazakhGold to Eligible Polyus Securityholders for 15% of the issued Polyus Securities. The Transactions, further details of which are provided below, are conditional upon, amongst other things, the passing of the Resolutions set out in the Notice of Extraordinary General Meeting at the end of this Circular.

The purpose of this Circular is to explain the background to and reasons for the Resolutions and to explain why the Board considers that the passing of the Resolutions is in the best interests of KazakhGold and its shareholders as a whole and recommends that you vote in favour of them.

The Resolutions, to be proposed as special resolutions at the Extraordinary General Meeting, are:

1.        to increase the authorised share capital of KazakhGold in order to facilitate the Transactions;

2.          to adopt new Articles of Association of the Company; and

3.          to change the name of KazakhGold to "Polyus Gold International Limited", conditional upon the admission to listing on the standard segment of the Official List, and to trading on the regulated part of the International Order Book of the London Stock Exchange, of the global depositary receipts, each representing one ordinary share of the Company, being issued in connection with the Transactions.

The Extraordinary General Meeting has been convened for 10.00 a.m. on 27 July 2010, at which the shareholders will be asked to consider and, if thought fit, approve the Resolutions. In order to be passed, the Resolutions will each require the votes in favour of not less than two thirds of the votes cast in person or by proxy.