The overall area under licence for this programme is about 780 sq.km. The objective is to secure a high-quality resource base in order to resume operations at the refurbished Kubaka processing plant on a sustainable long-term basis.   Further exploration will be conducted at the Company’s existing deposits (Birkachan, Oroch, Sopka Kvartsevaya, Dalneye, Kubaka) and ore occurrences (Prognoznoye, Burgali).   In 2009, prospectors drilled 2,571 metres of boreholes and mined 11,025 cu.m of underground workings.   Sopka Kvartsevaya deposit The deposit is located 140 km south of the Kubaka processing plant. A total of five ore bodies have been discovered here.   The 2009 JORC-compliant (by AMC auditor in 2007) estimate of the deposit’s resources is 820 Koz of gold and 20.6 Moz of silver, with the respective average grades of 8 g/t and 200 g/t.   In 2009, the Company conducted preliminary operational drilling (2,596 metres) and began open-pit mining. Ore mining at the site reached 91,691 tonnes in 2009, including 1.2 tonnes of gold and 32 tonnes of silver.

Birkachan deposit

The Birkachan gold and silver deposit is situated 25 km north of the Kubaka plant. Most of the gold and silver mineralisation is located within the Birkachan ore zone.

As of 31 December 2008, the deposit’s gold resources confirmed by the auditor (SRK Consulting Limited) were estimated at 1.4 Moz of gold and 6.7 Moz of silver, with the respective average grades of 2.4 g/t and 11.8 g/t.

In 2009, Polymetal began industrial-scale processing of low-grade gold ore using heap leach technology. By the year's end, 30 kg of gold (in dore gold form) had been produced. Recovery of gold and silver by heap leach will resume at the start of the warm season of 2010. The Company began preparations in 2009 to obtain all the required permits from the government agencies ahead of launching full-scale production.

Roughly 4,800 metres’ worth of exploration drilling is scheduled for 2010 at the eastern flank of the Birkachan ore zone. The Company hopes that the deposit's mineral resources will increase by 100-130 Koz of gold as a result.

Oroch deposit

The deposit is located some 80 km south of the Kubaka plant.

As of December 31 2008, the deposit’s gold resources confirmed by the auditor (SRK Consulting Limited) stood at 201 Koz of gold and 10.3 Moz of silver, with the respective average grades of 3.2 g/t and 167 g/t.

In 2009, Polymetal began its own exploration works at the deposit, completing 2,571 metres of drilling and 11,025 cu.m of underground mining. Promising new sites have been identified as a result.

Some 4,000 metres of exploratory drilling is scheduled for 2010 at the flanks of the ore zone aiming to confirm promising new geophysical anomalies at the periphery of the zone. Surface geophysical surveying and confirmation drilling will be done at the eastern edges of the main orebearing zone, covered by basalt rock. If geological projections are confirmed, the mineral base of the deposit will increase by at least 50%.

Dalneye deposit

This small deposit is situated 5 km from the Sopka Kvartsevaya operation. Estimated reserves in the С1+С2 categories stand at 176.8 Koz of gold and 4.5 Moz of silver. The total amount of ore is 947,000 tonnes, with the respective average grades of 6.5 g/t and 150.5 g/t.

The blueprint for additional exploration of the deposit was completed in 2009. The geological testing for the project was conducted and its findings accepted by Magadannedra, the government mineral resource agency.

Exploratory core drilling is scheduled for 2010 at the No 1 and No 3 main ore bodies. Once it is completed, findings of the feasibility study will be submitted to the appropriate government agency for approval.

Prognoznoye ore occurrence

The deposit is situated 95 km south-south-west of the Kubaka plant. Two flat-inclined ore bodies have been found in the central part of the site in 2009. The projection for gold resources in these two formations is 331.2 Koz. Other anomalies have been found but not yet confirmed. The estimated total resources at the site are therefore at least 1.3-1.6 Moz.

To ascertain the commercial viability of the site, the Company will conduct further exploration in 2010 including trenching, drilling, and surface geophysical surveying.

Burgali site In 2009, Polymetal acquired a gold and silver exploration and production licence for this site, located some 65 km northeast of the Kubaka plant.

Field work conducted in 2009 confirmed the presence of gold in commercially viable concentrations.

The Company has scheduled 25,000 cu.m of mining at the site as well as wider-area geophysical and geochemical exploration for 2010. The results will be used to assess the commercial prospects of the site and schedule further drilling for 2011.

Pyatinakh area

In September 2009 Polymetal won the licence for this site at an auction. The area is situated to the northeast of the Birkachan deposit. The distance from the center of the area to the Omsukchan GCP is 40-50 km. In 2010 the Company will prepare blueprints for exploration work and field reconnaissance to select the most promising sites for further exploration.

Also in 2010, Polymetal will review the most promising sites in a 50-60 km radius from the existing mines (Kubaka, Birkachan, Sopka Kvartsevaya) to select candidates for licensing in 2011.