REFERENCES and PRESS RELEASES

In Russia the principal PGM deposits were discovered in Soviet times. Uralplatina Holding of Viktor Vekselberg and Mark Buzuk has confirmed reserves in the Kievei deposit on the Kola Peninsula, which may total up to 250t contained PGM metal. Not long before this, reserves of comparable scale were confirmed in a neighbouring block by Canadian company Barrick Gold, suggesting that the companies might join forces for development of the deposits. Experts consider that Uralplatina is unlikely to become a serious competitor to the leader, GMK Norilsk Nickel, but Russia's position in the world market is strengthened.

As deputy general director of Uralplatina Holding, Sergei Mineev told Kommersant yesterday, concerning the holding in OOO Malaya Pana which owns the Kievei licence, the reserves of the first deposit block were confirmed by GKZ. In categories C1+C2 these are 50.8t PGM metals."The overall potential of the deposit comes to 250 tonnes of PGMs to a depth of 500m" confirmed this senior manager.

Uralplatina (owned by Viktor Vekselberg and Mark Buzuk) received news of the discovery of this deposit in September. To date, in Russia, mining companies have worked platinum deposits discovered in the Soviet times. The main placer deposits were Nizhnetagilskiy area around Solovinaya mountain (Sverdlovsk region), Konder in the Amur region, Inagli in Yakutia, and also included in Uralplatina the Levtirinvayam deposit in Koryakia. But production from these is practically exhausted. Only the leader Nornickel, owner of ore deposits, retains a prospective resource base.

The deposits of the Federovskaya-Pana Tundra (Kievei, Suleikpakh, Federovskaya Tundra, and Buruchaivench on the Kola Peninsula) were identified by geologists in the 1980s. Structurally the ore reefs are analogous to the South African Bushveld Complex. The Bushveld typically has ore bodies 1.5-2m thick and extending for some hundreds of kilometres. The grades of PGMs reache 10g/t. Structurally similar is also the Stillwater massif (owned by Nornickel) with 20g/t of PGM.

As noted by Mineev, Kievei up to 1998 was being explored by BHP, but they abandoned the project in the Russian financial crisis of 1998. In 2004 the licence was obtained by Malaya Pana. From then it has invested about $8 million in the deposit, and for completion of exploration a further $30 million is required. Uralplatina envisages construction of a full complex: mine, beneficiation and hydrometallurgical plant (producing 6-8t of PGMs per year). According to their calculation s this summer, the capital cost comes to $300 million, but taking into account the world crisis this will need to be adjusted. For realisation of the project, Uralplatina may bring in a partner in the form of Barrick Gold, which is developing the adjacent Federovskaya Tundra with probable reserves also of 250 tonnes PGMs. From unofficial information, reserves of the first block of Barrick's deposit were confirmed some months ago. This company has made no comment on the federovskaya Tundra situation or collaboration with Uralplatina.

Nornickel (with almost 50% of the world palladium market and 12% of the platinum) yesterday refrained from commenting on the appearance of new competitors. From data reported by Nornickel, the combined resources of Uralplatina and Barrick on the Kola Peninsula are about a fifth of the Russian resources of Nornickel (proved and probable platinum 510t, palladium almost 2,000t).

Morgan Stanley analyst Dmitriy Kolomitsin infers that Uralplatina is unlikely to become a serious competitor to Nornickel, but notes that growth of PGM reserves in Russia can influence the structure of the world market. According to data from Troika Dialog, world production of palladium is 248t/yr, and platinum 250t/yr, with rate of growth of demand at 3-4%. Moreover, of 7-8 new PGM projects worldwide, now five are frozen as a result of the crisis and poor market price. In 2008 PGM prices have fallen by 60%, in 2009 they are forecast to fall a further 40-45%. However, according to analysts, "fundamentally both metals will be interesting".