OREANDA-NEWS. May 17, 2012. JSC "Polymetal" (MICEX-RTS: PMTL) (together with its subsidiaries and holding companies - "Polymetal" or the "Company") announces that it has sold 100% of Amikan Holding Limited, which owns the Veduga gold deposit ("Veduga") in the Krasnoyarsk region of the Russian Federation to Polygon Gold Inc. ("Polygon"), a private company incorporated in the Province of British Columbia, Canada, reported the press-centre of Polymetal.

Polymetal received consideration of USD 20 million in cash and 750 ordinary shares of Polygon resulting in an 81.8% equity ownership in Polygon (the "Transaction").

Polygon was founded by Leonard Homeniuk, a gold mining executive with more than 35 years of industry experience and currently an independent non-executive director of Polymetal, to develop Veduga into a producing mine. Mr. Homeniuk serves as Polygon's Executive Chairman and CEO.

Polygon will operate as a standalone company with independent management, while Polymetal plans to provide certain technical and regulatory assistance to Polygon on an ongoing basis. Over time Polymetal may dilute its equity stake in Polygon if external equity financing is raised.

Veduga has estimated NI 43-101 compliant open-pit reserves of 1.05 Moz of gold contained in 5.9 Mt at 5.5 g/t and M&I resources (inclusive of reserves) of 2.04 Moz of gold contained in 11.8 Mt at 5.4 g/t. The asset was part of the joint venture between AngloGold Ashanti and Polymetal from 2007 to 2012.

In accordance with Listing Rule 11.1.10R (2)(b), an independent adviser (HSBC Bank plc) provided confirmation that the terms of the Transaction (being a related party transaction for the Company) are fair and reasonable as far as the shareholders of Polymetal are concerned. The Transaction was also approved by Polymetal's Board of Directors.

"I am very pleased that Veduga, a non-core asset for Polymetal, has found a competent owner who is prepared to take this asset into production," said Vitaly Nesis, CEO of Polymetal.

"We believe this transaction allows Polymetal, through its more than 80% stake in Polygon, to benefit from the development of this high-quality asset while preserving management's focus on the Company's existing project pipeline".