OREANDA-NEWS. October 25, 2010. JSC "Polymetal" (LSE, MICEX, RTS: PMTL) ("Polymetal" or the "Company") announces that it has entered into a letter of intent to acquire an 85% interest in East Tarutin property ("Property") in Kazakhstan (the "Transaction"), reported the press-centre of Polymetal.

The remaining 15% stake in the Property is owned by a state-owned company "SPK "Tobol" ("Tobol"), which currently holds the contract and the subsoil rights in relation to East Tarutin, covering the area of 66.4 square kilometers.

The Transaction is conditional upon, inter alia, receiving the anti-monopoly approval from the Kazakhstan government, completion of the legal and financial due diligence, and transfer of the contract and the subsoil rights from Tobol to the legal entity being indirectly acquired in the Transaction.

East Tarutin is an intermediate-stage exploration property located in north-western Kazakhstan, approximately 135 kilometers from Varvarinskoye, an operating gold-copper mine owned by Polymetal. It is situated 4.5 kilometers from the nearest railway station and is immediately adjacent to the border between Kazakhstan and Russia.

Mineralization is represented by copper and gold-bearing skarn and quartz-sericite alteration. It is currently traced for 300 meters along strike and 150 meters down dip, with the average ore body width of 35 meters and grades varying from 0.3% to 1.5% copper and up to 1 g/t gold.

Polymetal's strategic rationale for the proposed Transaction is to expand its presence in north-western Kazakhstan with a potential to utilize existing processing capacity at Varvarinskoye. The Company is planning to complete a drilling program in 2011 with the goal to advance the project to a resource definition stage by mid-2012 and to the pre-feasibility study - by mid-2013.

"We are keen to expand in Kazakhstan and East Tarutin is just the right opportunity given its closeness to Varvarinskoye and excellent bulk-mining exploration potential," said Vitaly Nesis, CEO of Polymetal.