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GOLD MINING COMPANY POLYUS. Mr. Eugene Ivanov President and Chief Executive Officer RUSSIAN ECONOMIC FORUM 2005. WHY RUSSIA?. Growing Russian gold production outpaces rest of the world +7% vs. (1)% CAGR. CAGR 7%. 5.5. 5.4. 5.4. 4.9. 4.6. 4.1. 3.7. 1998. 1999. 2000. 2001. 2002.

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slide1

GOLD MINING COMPANY POLYUS

Mr. Eugene Ivanov

President and Chief Executive Officer

RUSSIAN ECONOMIC FORUM

2005

slide2

WHY RUSSIA?

  • Growing Russian gold production outpaces rest of the world

+7% vs. (1)% CAGR

CAGR 7%

5.5

5.4

5.4

4.9

4.6

4.1

3.7

1998

1999

2000

2001

2002

2003

2004

mln oz

Source: Russian Union of Gold Miners, GFMS

slide3

WHY RUSSIA?

  • World’s second largest reserve base and only sixth place in gold output

South Africa

1 157

Russia

482

Australia

193

China

132

Peru

132

USA

119

Canada

113

Indonesia

90

Reserve base, mln oz

Source: GFMS, U.S. Geological Survey

slide4

WHY RUSSIA?

  • Russian producers are undervalued so far

Average

40%

40%

17%

Russian producers

Major producers

Intermediates

Junior producers

-18%

0% NAV Premium

Source: BMO Nesbitt Burns

slide5

WHY RUSSIA?

  • Discount for Russian producers implies high growth potential

Average

182

150

125

51

Major producers

Intermediates

Junior producers

Russian producers

EV / Reserves, US$ / oz

Source: BMO Nesbitt Burns

slide6

HERE COMES POLYUS!

  • Undisputable leader of Russian gold mining since 2001

Polyus

1.1

Peter Hambro

0.2

Highland Gold

0.2

Kinross Gold

0.1

Bema Gold

0.1

High River Gold

0.1

2004 production in Russia, mln oz

2004 production in the rest of the world, mln oz

Source: Company reports, BMO Nesbitt Burns, Troika Dialog

slide7

HERE COMES POLYUS!

  • World class reserve base

Polyus

18.9

Highland Gold

7.7

Peter Hambro

2.2

High River Gold

1.2

Bema Gold

0.4

Kinross Gold

0.3

2003 - 2004 reserves in Russia, mln oz

2003 - 2004 reserves in the rest of the world, mln oz

Source: Company reports

slide8

COMPANY AT A GLANCE

  • Unparalleled exposure to Russian gold
  • World class reserve base
    • 18.9 mln oz reserves plus an additional 40.9 mln oz resources
  • 3 operating mines and 9 development / exploration projects:
    • presence in 4 regions, employing 9 800 people
    • 2004 production – 1 087 k oz
    • 2004 est. total cash costs – US$175 per oz
    • 2004 est. EBITDA – US$199 mln
  • Financial strength
  • Focus on explosive growth with low total cash cost profile
  • Goal of becoming a TOP-5 Global Producer by 2010
slide9

LOCATION OF THE ASSETS

Natalka,

Degdekan, Magadan

Bamskoe, Amur

Alluvials and Zapadnoe, Irkutsk

Olimpiada, Krasnoyarsk

HQ, Moscow

slide10

ASSETS – KRASNOYARSK, IRKUTSK

  • Krasnoyarsk assets include Olimpiada, Olenii, Tyrada operating mines and Blagodatnoe, Panimba, Titimukhta deposits. Olimpiada open pit is the largest mine in Russia with 4.0 mtpa of ore mining capacity and 4.5 mtpa of ore treating capacity
  • Irkutsk Hard Rock Gold consolidates hard rock gold mining assets, incl. Zapadnoe, Verninskoe, Pervenetz, Mukodek, Chertovo Korito, and owns key infrastructure
  • Lenzoloto – 2nd largest Russian gold company on a stand-alone basis. 9 Lenzoloto subsidiaries operate 48 placer deposits and develop / explore another 74 deposits in Irkutsk region
slide11

ASSETS – MAGADAN, AMUR

  • Assets in Magadan include Natalka deposit and Degdekan exploration area
  • Natalka deposit with 4.0 mln oz in reserves at 4.2 g/t will transform into 18.1 in reserves at 2.0 g/t by 2007. 2005 – 2007 exploration budget of US$65 mln
  • Pre-feasibility study will chose between 23 or 30 mtpa processing plant, est. development capex of US$600 – 800 mln, annual production of up to 1.4 mln oz at total cash costs of approx. US$200 per oz
  • In February 2005 Polyus acquired Bamskoe deposit in Amur region containing .4 mln oz reserves and 2.4 mln oz resources
slide12

NATALKA EXPLORATION UPDATE

  • 2003 – creation of geological model based on historical 125 000 m drilled, resulted in 78.3 mln oz of modeled MI&I resources
  • 2004 – two stage exploration program to confirm modeled resources and explore at depth and on flanks, 13 drill rigs in place:
    • Surface diamond drilling of 120 000 m, 34 000 m completed
    • Underground drilling of 6 000 m, will end this May
  • 2005 – exploration stage #1 completed:
    • Confirmed 18.2 mln oz of measured and 11.3 mln oz of indicated resources under .6 g/t cut-off grade, in line with completed SRK audit results
    • Added 6.5 mln oz of indicated resources under +600 m elevation bench
    • Encountered two new ore intervals 200 m thick and grading more than 2.0 g/t
    • Possible upward reevaluation of grade
slide13

NATALKA EXPLORATION UPDATE

Upside from exploration stage #1, 6.5 mln oz of indicated resources

Two new ore intervals 200 m thick and grading > 2.0 g/t

slide14

STRONG ORGANIC GROWTH PROFILE

  • Explosive growth with stable low total cash costs

221

219

213

207

207

198

175

144

3.3

2.5

1.9

1.1

1.3

1.2

1.1

1.1

2003

2004

2005F

2006F

2007F

2008F

2009F

2010F

Production, k oz

Total cash costs, US$ per oz

slide15

SOLID CASE FOR POLYUS

  • Unparalleled exposure to Russian gold industry
  • Key position of a leading Russian gold miner to capitalize on growth potential of Russian gold
  • Existing assets with superior growth profile
  • Solid cash flows
  • Strong cash balance and debt-free balance sheet
  • No hedging policy
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