September 08, 2008

Severstal Resurs acquires two gold mines in Russia

Severstal’s mining division, Severstal Resurs, has acquired two gold mining enterprises through Severstal’s subsidiary Bluecone Ltd, in a cash deal for an undisclosed sum. Both mines were originally managed by the Arlan investment company.

OOO Neryungri Metallic that mines gold from the Tabornoye deposit in the Sakha-Yakutiya Republic. Tabornoye is located in the southern part of Yakutiya, 100 kilometers from Baikal to Amur railway. Tabornoye has a reserve balance of C1+C2 gold amounting to 15 tons, while P1+P2 gold exceeds 70 tons.

ZAO Rudnik Aprelkovo which mines from the Pogromnoye gold deposit in the Chitinskaya oblast. Pogromnoye is in the Chitinskaya oblast, 300 kilometer east of Chita city. The Pogromnoye gold deposit’s reserves are estimated to be 25 tons of C1+C2.

Both deposits are operated as open pit mines with gold extracted utilizing heap leaching technology. Gold production at Tabornoye and Pogromnoye for 2007 is estimated to be 2.7 tons or 87,000 ounces.

Mr Roman Deniskin, CEO of Severstal Resurs said “Both the Tabornoye and Pogromnoye deposits are very attractive assets with significant development potential. We see these deals as an important next step in the formation of Severstal Resurs gold mining division. The deals also progress our strategy of developing Severstal`s mining business.”