MMC Norilsk Nickel announces the results of the audit of Bystrinskoye deposit

As part of its strategy for the exploration and development of new mineral deposits in the territory of the Russian Federation MMC Norilsk Nickel provides the information on the ore reserves and mineral resources at the Bystrinskoye deposit. The audit of the ore reserves and mineral resources was conducted by Micon International Co. Limited, independent consultant, in accordance with the principles of JORC Code, and the reported data are stated as of October 1, 2006. The Bystrinskoye deposit is located in the Chita Region, south-east of Russia. Local ore is of multi-component nature and contains such metals as copper, gold, silver and iron.

A detailed exploration program for the flanks and deeper levels of the Bystrinskoye deposit has been developed, and its implementation may result in an upward re-evaluation of currently known resources. It is planned to spend USD11 million on the exploration works on the deposit in 2007-2009.

Slightly sloping ore bodies are suitable for cost-effective open pit mining. Current works are focused on the preparation of documentation required for further project development, which will include the construction of integrated mining/concentration plant. The ore processing capacity of the new plant will be 10 Mtpa, and mining operations are expected to commence in 2011-2012.

The Bystrinskoye deposit is among other deposits being developed by MMC Norilsk Nickel under the joint project with the Investment Fund of the Russian Federation «Creation of transportation infrastructure to develop raw material base of the south-east of the Chita Region». Pursuant to the Regulation of the Government of the Russian Federation No. 1708 of November 30, 2006, in 2007-2011, on the terms of state-private partnership the Investment Fund of the Russian Federation will finance 69% of the construction cost of the railway connecting the deposits in the south Chita region with the Trans-Siberian Railway. MMC Norilsk Nickel will invest the remaining 31%. The total amount of financing is estimated as USD1,981 million.

The new transportation route will substantially enhance the development of both the region and the deposits to be developed by MMC Norilsk Nickel. The deposits are rich in copper, gold, silver and iron. The cost of the complete exploration program to be carried out for those deposits in 2007-2010 will total USD90 million.