Polymetal Acquired Degtyarskoye Gold Deposit from Russian Copper Company

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Saint-Petersburg, Russia, August 28, 2008 - JSC "Polymetal" (LSE, MICEX, RTS: PMTL) ("Polymetal" or the "Company") announces that it has acquired a 100% interest in Urals Exploration Company ("UEC"), which holds the exploration and mining license for Degtyarskoye gold-silver deposit, from Russian Copper Company ("RCC") for US$ 6.25 million. Degtyarskoye is located in the Urals region of the Russian Federation, 35 kilometers south-west from Ekaterinburg, and 380 kilometers from Voro (Polymetal's operating mine in the region), next to Degtyarsk, a city with population of 15 thousand people, developed infrastructure including automotive and rail roads, and grid power. Gold and silver mineralization at Degtyarskoye was discovered in 2000; detailed exploration was completed by UEC in 2006. In 2007 Polymetal Engineering reviewed drilling results and conducted technological testing which showed high recoveries at both heap leach (more than 75%) and CIP (more than 85%) processing facilities at Voro. Russian C1 and C2 reserves calculated in the statutory feasibility study in the first half of 2008 are given in the following table (at the cut-off grade of 0.5 g/t):

"This is a small, but high-quality, acquisition in line with our strategy of building portfolios of high-grade deposits around our existing processing facilities", said Vitaly Nesis, CEO of Polymetal. "We will continue to be on search of such high-grade capital-light and technologically and logistically straightforward projects." Following the receipt of permitting documentation, Polymetal plans to start open pit mining (with ultimate pit depth of only 30 meters) in 2009. Due to softness of rock, no blasting will be required. Ore will be transported to Voro where it will be processed at the existing facilities. Further exploration on the property will also be undertaken as there is some potential to extend mineralization along strike in one direction.    

Pavel Danilin VP, Corporate Finance and Investor Relations Tel.  +7 812 334 3666  E-mail: danilin@polymetal.ru Website: www.polymetal.ru  

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This release includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or "should" or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements are not guarantees of future performance. Many factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. These forward-looking statements speak only as at the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

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