News

March 29, 2005

IFC METROPOL and leading Chinese mining companies sign agreement on cooperation in developing polymetallic ore deposits

Investment financial company METROPOL, Shui Kou Shan Nonferrous Metals Group Ltd. and Taizhou Huatian Industry Co. Ltd., two of China’s major mining companies, held negotiations on mutually beneficial cooperation.

The parties agreed to implement the program, which is aimed at enhancing Russia-China relations and boosting the economic growth of the companies that took part in the negotiations.

The agreement paves the way for the construction of mining facilities at the Ozernoye deposit in the Republic of Buryatia. The facilities may be built on the following terms: The Russian party will carry out engineering works, obtain approvals from Russian state authorities, construct a mining plant with a capacity of 2 mn tons per year, a preparation plant, a tailings pond and necessary infrastructure and will deal with issues related to transportation of products. The Chinese party will provide a credit line (untied loan) to finance these activities.

“Signing an agreement on mutually beneficial cooperation with Chinese companies is extremely important for the development of the Russian mining industry”, says IFC METROPOL General Director Mikhail Slipenchuk. “Financing will facilitate the construction of Russian enterprises and allow for the creation of new jobs for residents of Buryatia. Supply of concentrate, not ore, to the Russian domestic market is a new approach to cooperation with international companies which is important to Russian economy. As part of the development of the mining industry of the Republic of Buryatia, and if international cooperation is secured, we are negotiating cooperation with leading Russian financial institutions and production enterprises, European engineers and equipment suppliers.”

Within one month since the day of the signing of the protocol the Russian party will prepare a detailed offer that will include: The amount of capital required; The procedure to repay the loan; Forms of financial security of the loan until the repayment.

About Ozernoye polymetallic ore deposit

The Ozernoye deposit is one of the world’s largest deposits in terms of zinc reserves confirmed in the amount of 128.16 mn tons of ore. Ore is comprised of 7% zinc. The average content of silver is 37,6 g/t, lead - 1,25%, sulfur - 20,82%, cadmium - 0,017%.

About IFC METROPOL

Investment financial company METROPOL, one of Russia’s leading investment companies, constitutes part of the METROPOL Group of Companies. IFC METROPOL has operated in the Russian stock market since 1995.

Among the company’s core businesses are transactions in the stock market and Russian and leading international exchanges, investment services, financial consulting and industrial investments.

The Company was rated in the 5th place with a turnover of $432 mn in 2004, in the RTS classical market. IFC METROPOL has an office in London, Metropol UK Limited, a licensed member of the London Stock Exchange, and a branch in Japan (Tokyo). The Company obtains the AA rating (very high level of reliability) from the National Association of Stock Market Participants (NAUFOR). The Depository holds the AA rating (very high level of reliability) from PARTAD.

IFC METROPOL owns METROPOL Asset Management and a controlling stake in commercial bank OBIBANK.

Mikhail Slipenchuk, IFC METROPOL General Director, was awarded the 2005 annual national prize, “The Person of the Year” for “Attraction of Investments in the Real Sector of Economy.”

About Shui Kou Shan Nonferrous Metals Group Ltd.

Shui Kou Shan Nonferrous Metals Group Ltd. is one of China’s leading mining and processing companies. The company was set up in 1896 in Hengyang City (Hunan Province). The company organized Shuikoushan Mines Bureau, a large-scale metallurgic enterprise which produces ore, presses and melts it. Shuikoushan mainly produces copper, lead and zinc. The company’s production and treatment capability amounts to 600 000 tons of ore a year, melting capability equals about 200 000 tons a year.

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