OREANDA-NEWS. November 09, 2010. JSC "Polymetal" (LSE, MICEX, RTS: PMTL) ("Polymetal" or the "Company") announces that it has agreed to contribute its Galka polymetallic deposit to a newly incorporated JSC "Ural-Polymetal" ("UP"), reported the press-centre of Polymetal.

Polymetal's share in UP will be 33.3%. The remainder of UP will belong to private owners of several production assets and mineral properties in the region.

Galka is located in the Sverdlovsk region, 26 kilometers from Voro, Polymetal's operating gold mine. Total resources of Galka are estimated to contain 1.6 Moz of gold equivalent in 14.2 Mt of mineralized material at an average grade of 3.5 g/t of gold equivalent1. Gold represents less than 50% of the total economic value of the resources; the remainder is mostly zinc and silver.

In addition to Galka, the assets to be contributed to UP will consist of an operating copper-zinc open-pit mine, an operating copper-iron underground mine, an operating 400 Ktpa flotation concentrator, several exploration properties, and related infrastructure. The total Russian C1+C2 reserves at these assets contain 117 Kt of copper, 0.2 Moz of gold, and 52 Kt of zinc.

"We are very pleased that Galka, long deemed to be non-core for Polymetal, will be developed in conjunction with existing processing facilities," said Vitaly Nesis, CEO of Polymetal. "Polymetal is also honored to cooperate with the Voronov family, well-respected regional mining entrepreneurs with outstanding track record, who will control the new JV."