Statement of the Board of Directors of MNPO Polymetall on Situation with Dukat Mine.Business Editors MOSCOW--(BUSINESS WIRE)--Jan. 20, 2000 Scientific-Industrial Company POLYMETALL (MNPO Polymetall) accepted the offer of the Kaskol Company Group to become a managing company for the property of Dukat Mine (Dukat GOK GOK God Only Knows (used by doctors on patients' records) GOK Government of Kuwait GOK Gulf of Kutch GOK Gulf of Khambat GOK Gnome Onscreen Keyboard ) in the Magadan region. The agreement between the two companies was signed January 19, 2000. The proposal came last year in the second half of December and MNPO Polymetall took the following circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or into account when it studied the proposal and made the decision: First. Kaskol applied to Polymetall using its right as the owner of the property of the bankrupt BANKRUPT. A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt. 2. It is proper to notice that there is much difference between a bankrupt and an insolvent. Dukat GOK. This property was purchased at auction in November 1999 and includes all industrial infrastructure and equipment of the Mine with concentrating mill, access roads and tracks, power lines, transformer transformer, electrical device used to transfer an alternating current or voltage from one electric circuit to another by means of electromagnetic induction. substations, compressor compressor, machine that decreases the volume of air or other gas by the application of pressure. Compressor types range from the simple hand pump and the piston-equipped compressor used to inflate tires to machines that use a rotating, bladed element to achieve unit, etc. The auction was held according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most Law. Kaskol won after offering a higher price than other participants. The results of the auction are confirmed in the agreement that was concluded by a specified time. According to the agreement Kaskol timely paid all the due amount of $12 million. Second. ZAO ZAO Zakrytoe Aktsionernoe Obschestvo (Russian: Closed Joint Stock Corporation) ZAO Zenith Angle Offset ZAO Aluminium Doped Zinc Oxide (material for producton of organic light-emitting diodes) &uot;Serebro Dukat&uot; the current holder of the license for the development of the Dukat Gold and Silver Mine, 70 per cent of the shares which belong to Canadian company Pan-American Silver (PAS) actually became incapable of using the property of Dukat GOK and can't make any activities defined by license agreement. Third. Polymetall is a Russian company dealing with precious metals mining and it naturally has interest in the Dukat mine which is one of the biggest in the world in reserves of silver. Fourth. Polymetall realizes that it is necessary to resume production at Dukat GOK as soon as possible to help solve some acute social and economic problems of the Omsoukchan district and in Magadan region in general. The company also understands the importance of this project for the economics of the country. Taking into consideration the above mentioned, Polymetall in this situation considered it had a right to become a technological partner of Kaskol for management of the property of GOK and to act as an operator of the Dukat mine project. The Company found no reasons to reject this prospective offer. Polymetall completely meets all the necessary requirements. It works in this region on another major precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. mining project - Lunniy - and therefore it has necessary experience in managing such sites and developing such projects. It is well acquainted with the local business, administrative and climatic conditions and features. This company also has the necessary capacities and means as well as technological potential and financial resources to work on tasks at Dukat GOK and currently expects no technological, administrative or financial problems in this way. Polymetall would like to mention that now Dukat GOK is not working and development of the mine is delayed. It is sad because local administration has done its best to carry out the project in shortest time and to resume work at Dukat GOK. ZAO Serebro Dukat planned just to remove silver concentrate from the ore and to take it out of Russia for processing. Unlike ZAO Serebro Dukat, Polymetall will maintain the same level of output but provide deep processing of the ore including processing of the concentrate and production of affinated silver on the spot, in Magadan region. Basing on our experience with other mines we have every reason to assert that Polymetall's expenses on this project will be four time less than those ZAO Serebro Dukat planned. Therefore Polymetall as a project operator is capable in short term and with significant savings of means to provide carrying-out of Dukat mine project in the best interests of the Russian North. For Russia the conditions of the project will be much more beneficial than those that were proposed by ZAO Serebro Dukat, both in economic (creation of the new jobs, development of the manufacturing branch) and financial aspects (increase of taxation basis and payments to social funds). Background Information about Polymetall Polymetall is holding company which united under central management credit and financial resources, scientific and technological research and development, modern methods of production engineering and advanced domestic and foreign technologies of the gold-mining industry. The company also developed and is conducting industrial tests unique technologies for hydrometallurgy hydrometallurgy Extraction of metal from ore by dissolving the metal (as one of its salts) and then recovering it from the solution. The operations usually involved are leaching (dissolving in water), commonly with additional agents; separating the waste and purifying the and pyrometallurgy Pyrometallurgy The branch of extractive metallurgy in which processes employing chemical reactions at elevated temperatures are used to extract metals from raw materials, such as ores and concentrates, and to treat recycled scrap metal. of other metals. Polymetall owns 12 mining companies in Buriatia, Khabarovsk region, Bashkortostan and Orenburg, Sverdlovsk, Sakhalin, Irkutsk and Magadan regions. It has 2 thousand employees and its headquarters are located in St.Peterburg. The specialists of the First (Mining) department of the Ministry of the medium engineering industry of the USSR USSR: see Union of Soviet Socialist Republics. and of the First (uranium uranium (y  rā`nēəm), radioactive metallic chemical element; symbol U; at. no. 92; at. wt. 238.0289; m.p. 1,132°C;; b.p. 3,818°C;; sp. gr. 19. ) department of the Ministry of the geology of the USSR form the basis of the staff of Polymetall. The holding also includes scientific-research and designing institute.
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