Russia

August 28, 2008

Metals and Mining
Common
Recommendation
PLZL RU
(from HOLD) BUY Polyus Gold
Mid price $29.75
Target price
Upside
(from $55.80) $46.42
56% Olympiada Site Visit, Investment Case Revisited
Free float 40%

ADR PLZL LI We recently visited Polyus Gold’s Krasnoyarsk operations and viewed the
Recommendation (from HOLD) BUY flagship Olympiada mine and the large Blagodatnoye development project,
Last price $15.90 both of which left us quite impressed. We regard Polyus Gold as one of the
Target price $23.21
Upside 46%
most complicated cases in the global precious metals universe, with its
extremely aggressive greenfield pipeline and back
end loaded growth. We
Market cap $5,297 mln underline that the company needs to streamline its growth portfolio and think
Enterprise value $3,850 mln that the shareholder dispute is having a negative impact on the valuation. We
ADT, 100 days $34.8 mln
Prices as of August 27, 2008
are decreasing our target price from $55.80 to $46.42 per share (from $27.90
to $23.21 per ADR), but upgrading our recommendation to BUY on share price
Key data
weakness. We now view the stock as more of a long
term value story with
appealing greenfield projects and unparalleled exploration upside.
2007 2008E 2009E 2010E
Financials (IFRS), $ mln
Revenues 867 1,131 1,125 1,468 █ Olympiada and Blagodatnoye visit. We were left with a positive impression from
EBITDA
EBIT
279
54
390
272
329
202
541
371
Olympiada, not only due to its sheer scale (over 800,000 oz annually) but also from
Net income 41 233 183 307 the technological solutions employed at the asset and the expertise that the local
EPS, $ 0.49 1.01 0.83 1.54
Profitability management has gained in running the operation. The Large Mill 3, which uses
EBITDA margin
EBIT margin
32%
6%
34%
24%
29%
18%
37%
25%
BIOX technology and was commissioned in summer 2007, is a veritable feat of
Net margin 10% 16% 13% 19% modern engineering. The site faces deteriorating mining conditions as it transitions
Price ratios
P/S 6.1 4.7 4.7 3.6 to processing sulfide ore but will remain a substantial cash center for the company.
EV/EBITDA
P/E
14.0
60.4
9.9
29.4
13.4
35.7
8.8
19.3
The adjacent Blagodatnoye project, one of the most exciting and economically
P/CF 56.6 12.7 18.3 12.5 robust development assets in Russia, is well on track for launch in 2010.
Growth
Revenues 15% 30% -1% 30%
EBITDA -4% 40% -16% 64%
█ Challenging growth pipeline. Polyus Gold has accrued a vast development and
EPS -33% 105% -18% 84% exploration pipeline that presents substantial growth opportunities, but comes with
a tangible execution risk. We think that the company needs to streamline it,
Price performance, % including divesture of exploration assets (though not in the proposed form) and
1 mo 3 mo 6 mo YTD establishment of JVs at the largest projects (Natalka). Natalka may now be further
Common -41.7 -52.6 -45.9 -35.2
Relative to RTS -28.4 -28.7 -28.6 -6.6 increased in scale from 1.3 mln oz to 1.9 mln oz following a feasibility study, though
the market is to continue to discount its valuation heavily until greater production
Price performance, $ and financial visibility is provided.
80

75
80

75
█ Any resolution to shareholder dispute? The shareholder dispute between
70

65
70

65
Onexim Group and Interros that initially provided a strong boost to Polyus Gold’s
60 60 share price ahead of the AGM, is now being increasingly perceived as damaging the
55 55

50 50 management’s ability to focus on operations, thus negatively affecting the share

45

40
45

40
price. As Onexim Group positions are strong, we expect Interros to look to cash out,
35

30
35

30
selling its stake to an Onexim Group-friendly strategic investor.
25 25
Aug '07 Oct '07 Dec '07 Feb '08 Apr '08 Jun '08 Aug '08 █ Valuation updated. We have revisited our valuation of the company, having
Share price Relative to RTS adjusted upward our operating and capital cost assumptions as well as the cost of
Max 75.75 (Jul 24, ’08) Min 29.75 (Aug 27, ’08) capital. We have decreased our target price but increased our recommendation on
Source: Bloomberg, Troika Dialog the stock. However, in view of a deplorable medium-term earnings momentum,
major triggers for the stock will lie in increased visibility of its development projects
and resolution of the shareholder conflict on the corporate actions front.
Mikhail Stiskin Analyst
Mikhail_Stiskin@troika.ru
+7 (495) 933 9839

Sergey Donskoy Analyst

Sergey_Donskoy@troika.ru
+7 (495) 933 9840

Ilya Klenin Assistant Analyst

In accordance with US SEC Regulation AC, important US regulatory disclosures and analyst certification can be found on the last page of this report. www.troika.ru
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Investment case: tangled as ever

We have recently visited Polyus Gold’s major operating mine, Olympiada, which impressed us. The visit
confirmed its status as one of the best gold mining operations in Russia. We also saw the
Blagodatnoye development site, which should come online in 2010.
At this point Polyus Gold is arguably one of the most complicated cases in the global gold mining universe
(and one of the most difficult to value), with its extremely aggressive greenfield project pipeline and
back-end loaded growth. We think that an undisciplined expansion program has led to execution
challenges and that the company needs to take concerted efforts to streamline its development pipeline,
including via divesting exploration assets and establishing JVs at the largest projects (Natalka).

Polyus Gold production 2004
15E, ’000 oz

3,000 120
-
125
- 407
2,500 407
129 172
-
115 172
145 398
2,000
395 172
- 1,343
193 172 1,091
1,500 -
727
193
296
- - - - 158 392
- 172 179 183 193 172
- - - - 172
1,000 246 212 156 142 163 -
172 - 202 202 202
190
-

- - - 138 190
- --27 -

500 854 861 835 858 858 858

820 783 784 803 757 804

0
2004 2005 2006 2007 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E

Olympiada Verninskoye Natalka Zapadnoye

Kuranakh Blagodatnoye Lenzoloto Chertovo Koryto

Source: Company, Troika Dialog estimates

We posit that cost inflation has and will continue to have substantial negative effects not only on
operating costs (which are compounded by worsening mining conditions at Olympiada), but also
on capital costs, which are close to $5 bln. Polyus Gold will have quite deplorable earnings
momentum until the largest projects are launched in 2010-11. Moreover, the shareholder dispute is
being increasingly perceived as damaging to the management’s ability to focus on operations,
negatively impacting the share price, and we now expect Interros to look to cash out, selling its
stake to an Onexim Group-friendly strategic investor.
That said, we believe that the company possesses some extremely attractive large-scale
development assets (Blagodatnoye and Natalka) with robust economics, while Olympiada will
remain a cash center, with production of over 800,000 oz and an enviable costs structure. We also
see unparalleled exploration upside embedded in Polyus Gold’s portfolio, which the market is
ignoring. The company also holds $1.5 bln in cash that is easily overlooked. That said, with most of
its value in the development projects, the value remains particularly dependent on the visibility of
growth projects, and the poor earnings momentum that is forecast over the next four years is
unlikely to positively affect sentiment. We have decreased our target price but increased our
recommendation on the stock on the back of the share price correction and see the investment case
as more of a long-term value story.
The gold price has performed poorly recently on the back of a stronger dollar, falling commodity
prices, seasonally slow demand and jewelry consumption tampered by high bullion prices and an
increasing feed of scrap supplies. We still believe that the medium and long-term environment
remains pro-gold, however, with inflationary concerns across the planet, stagnant mine output, and
robust jewelry demand in emerging markets. We forecast a gold price for 2008 of $921/oz (YTD
the price is around $920/oz and it is currently over $820/oz), $936/oz in 2009 and $968/oz in
2010, and bullion performance remains a risk to our valuation.

2 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Notably, a de-rating of globally commodities has not spared gold equities, including Polyus Gold, most of
which are down some 30% from their 1H08 highs. On the gold market, the ratio of the Philadelphia
Gold & Silver Index (XAU) versus the gold price has peaked, suggesting that gold equities are oversold
relative to the commodity price. We generally remain proponents of a long-term secular bull cycle in
commodities and would pick up the most undervalued equities with a long-haul investment horizon.

Ratio of gold spot price to Philadelphia Gold & Silver

Index (XAU) since 2001

6.5

6.0

5.5

5.0

4.5

4.0

3.5
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08

Source: Bloomberg, Troika Dialog

Olympiada – the flagship asset

Olympiada is the flagship mine of Polyus Gold and the largest gold-mining operation in Russia,
churning out over 800,000 oz annually. The mine is located 500 km north of Krasnoyarsk and is
accessible via a 60 km road from the local district center, Severo-Yeniseysk. We were impressed with
the deposit, not only by its sheer scale, but also by the technological solutions employed at the asset
and the expertise that the local management has gained in running the operation. Olympiada is not
only the largest operating gold asset in Russia, but arguably represents one of the best managed ones,
with a strong team from the former CJSC Polyus, which was sold to Norilsk Nickel in 2004 (it now
forms Polyus Gold along with other assets) and is headed by Vladimir Sovmen.
The Olympiada operation includes a large open-pit mine with total movement in the order of 30 mln m3
of ore and waste annually. The mineralization includes rich oxidized ore grading 10-14 g/tonne, which is
easier to process, as well as sulfide (primary) ore grading 3-4 g/tonne, which is more complex. As the
quantity of oxidized ore at Olympiada has now been depleted due to previous mining, the operation will
have to process more of sulfide material to maintain production volumes.

Olympiada ore body cross section

Source: Company, Troika Dialog

The Olympiada mine comprises two open pits – the East Pit and the West Pit – both of which are
exploited using conventional excavator and truck techniques. Operations are currently focused on
the East Pit, which is the main source of ore production. The East Pit is presently in the midst of a
three-stage development and expansion program to boost ore from 3 mln to 5 mln tonnes through
a phased push-back of the pit walls. The final depth of the mine is expected at 650 m. The West Pit
has been partly developed and is planned to be operational until 2014.

3 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Olympiada open
pit mine

Source: Troika Dialog

There are three operating mills currently tailored for processing different types of ore. Oxidized ore
is processed at Mill No 1, which was built in 1996, has a capacity of 1.5 mln tpy and will now be
expanded to 2.2 mln tpy. The ore is amenable to direct cyanidation and gold is recovered via RIP
(resin-in-pulp) technology. As oxidized ores at Olympiada have been depleted in 2008, the ore will
be fed from the satellite projects – the smaller Olenye and larger Titimukhta deposits.
Refractory sulfide ore is processed at Mill No 2 and 3. Mill No 2 was built in 2001, has a capacity of 3 mln
tpy and employs a bio-oxidation process (BIOX), which oxidizes sulfide minerals by bacterial action,
rendering the minerals amenable to leaching. Innovative BIOX technology increases the gold recovery
rate from sulfide ores by an average of 20-35% compared with conventional methods, and Mill No 2
was the first facility in Russia to utilize this technology.
Mill No 3 was commissioned in summer 2007 and represents a veritable feat of modern engineering.
The plant has a design capacity of 5 mln tpy and is the largest gold mill in Russia and one of the largest
BIOX plants globally. Although the mill has essentially the same flow sheet as Mill No 2, its design has
been altered, incorporating experience gained in with Mill No 2 to further improve the economics. The
enormous plant took just three years to build at a total price tag of $340 mln.

4 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Olympiada mill operations

Source: Troika Dialog

Thus, depletion of oxidized ore reserves will be offset by raising capacity to process sulfide ores to 8
mln tpy, which will keep production stable at 800,000 oz and making the deposit the single most
important asset (by far) in the company’s portfolio until 2012, when production begins at Natalka.
There is a also an impressive 14 mln tonne sulfide ore stockpile at Olympiada to ensure adequate
mill feed to the plants while the mine is being expanded.
We also visited the satellite Titimukhta open-pit mining project, which lies 9 km northwest of
Olympiada and will provide free-milling ore to the plant at Mill No 1 over the seven year mine life
following the depletion of the Olenye deposit. Ore will be mined at a rate of 1.5 mln tpy
commencing in 2008, then ramped up to 2.2 mln tpy and continued until 2015.
Worsening geological conditions at Olympiada – higher tonnage and lower grades due to more reliance
on refractory sulfide ore, an increasing stripping ratio, deepening of the open pit and necessity to haul
the ore from satellites – will obviously substantially impact the asset’s cost profile. Quite importantly, cost
performance will be helped by processing sulfide ore from available stockpiles, mitigating mining costs.

Olympiada total cash costs, 2003
15E, $/oz

600

500

400
300

200

100

0
’03 ’04 ’05 ’06 ’07 ’08E ’09E ’10E ’11E ’12E ’13E ’14E ’15E

Source: Company, Troika Dialog estimates

5 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

According to the local mine management, the deep flanks of Olympiada appear highly prospective and
the company expects that their successful exploration will enable Olympiada’s mine life to be extended.

Krasnoyarsk assets of Polyus Gold

Source: Company, Troika Dialog

The management also remains particularly upbeat on the number of exploration assets in the region,
including Panimba (see map). The deposits are most likely to be mined open-pit and contain free
milling ore, ensuring robust economics. The company plans to leverage its existing infrastructure and
logistics in the region when developing the assets and sees the potential to almost double production
volumes from the current 850,000 oz in the region with possible launch of these prospective deposits.

Blagodatnoye – well on track

The Blagodatnoye project adjacent to Olympiada is, in our eyes, Polyus Gold’s most exciting and
economically robust development asset after the giant (and controversial) Natalka. Located 26 km north
of Olympiada, the project will realize important infrastructural synergies with the company’s flagship
mine. The largest gold asset discovery in the modern history of Russian gold mining and a child of Polyus

6 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Gold’s own exploration efforts since 2000, the project now boasts an impressive 8.1 mln oz of gold at a
robust grade of 2.4 g/tonnes in P&P under JORC and 19.0 mln oz in MI&I resources.
The asset is to be mined using conventional shovel-and-truck open pits. The ore is free milling and is
expected to be processed on-site at the 6 mln tpy mill, with recoveries via gravity concentration,
followed by flotation and cyanide leaching. The recovery rate is expected at around 88.6%.

Blagodatnoye mill under construction

Source: Troika Dialog

The asset is expected to be launched in 2010 and will process 3 mln tonnes that year for 206,000
oz of gold. The project will then be ramped up to 6 mln tonnes of capacity and 412,000 oz of gold
production. We believe that the company is currently well on track with mine development – where
equipment from Olympiada has been relocated – and mill construction. We now move our expected
launch year from 2011 to 2010; more importantly, the local mine management estimates that it
may even be possible to launch the project in end 2009.

7 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Blagodatnoye production (mine life), bars, ’000 oz Blagodatnoye free cash flow versus total cash costs,
2007
15E

500 300 500

400 200 400

300 100 300

200 0 200

100 -100 100

0 -200 0
2011E

2015E
2010E

2012E
2013E
2014E

2016E
2017E

2018E
2019E

2021E

2025E
2020E

2022E
2023E
2024E
’07 ’08E ’09E ’10E ’11E ’12E ’13E ’14E ’15E
Blagodatnoye free cash flow, $ mln
Blagodatnoye total cash costs, $/oz

Source: Company, Troika Dialog estimates Source: Company, Troika Dialog estimates

The project possesses very robust economics, with a low stripping ratio of 2.3 m3/tonne over the
mine life and straightforward processing. We expect total cash costs to average $300-350/oz and
forecast capex of $545 mln. The project NAV stands at a handsome $751 mln and risked equity
value is $962 mln when incorporating 20% development risk and standard P/NAV of 1.6.

Natalka project – even bigger?

Natalka is the undisputable piece de resistance in Polyus Gold’s growth portfolio, one of Russia’s
largest greenfield mining ventures and by far the biggest project in the domestic gold mining
industry. With reserves of 40.8 mln oz (P&P under JORC), making it one of the three largest gold
deposits globally, and expected output of well over 1.0 mln oz, the asset remains one of the key
items in the company’s valuation. We currently expect output of 1.3 mln oz starting in 2012, with a
mind-boggling 40 mln tpy of ore to be open-pit mined and processed, making it largely a volume
operation, as grades stand at a mediocre 1.1 g/tonne. A pre-feasibility study was prepared in the
beginning of 2008 and Polyus Gold is also currently considering expanding the scale of operations
even further, possibly boosting mined tonnage to 60 mln tonnes of ore, churning out 1.9 mln oz of
gold. The feasibility study is to be completed by year end. Polyus Gold has recently constructed a
pilot plant with ore capacity totaling 120,000-130,000 tonnes in order to develop greater
knowledge of the asset and its metallurgy.
Considering the geographic remoteness of the project, which is located in Magadan Region,
electricity supplies have been one of the major challenges for the deposit, and Polyus Gold has
signed an agreement with RusHydro to provide electricity to the Natalka mine. The power will be
supplied by both the existing Kolymskaya hydropower plant and the Ust-Srednekanakaya
hydropower plant currently under construction. The document details preliminary arrangements
regarding the terms of the power supply and specifies the technical solutions of the project, though
no final agreement on the price was reached.
The increase in the project’s potential capacity will remain an upside scenario in our valuation.
However, in view of the amount of skepticism vis-а-vis Natalka in the gold industry and investment
community and the challenges that a project of this scale entails, we expect the market to continue
to discount its valuation quite heavily until greater production and financial visibility is provided
and/or the market has greater certainty in the company’s ability to manage its Herculean pipeline.
We reiterate our call that we would like to see Polyus Gold team up with a gold major to develop the
massive Natalka asset while retaining a 51% stake, enabling it to substantially reduce operating
risks (or at least their perception). Considering the lack of substantial organic growth opportunities
for most gold majors and the rarity of projects of such scale on the global market, there will be no
paucity of contenders for a partnership role in developing the deposit.
Natalka was valued at $1.4 bln for the purpose of the mandatory buy-out now conducted by Polyus
Gold, and considering the usual ultraconservatism of valuations in such cases in Russian corporate
governance we admittedly take some relief in this number.

8 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Now with Chertyvo Koryto

Earlier this year, Polyus Gold completed an audit of mineral resources under JORC standards of its
small-scale asset, Chertyvo Koryto. In P&P categories, the asset is estimated to contain 43.6 mln
tonnes of ore graded at1.83 g/tonne and containing 2.6 mln oz of gold. M&I resources amount to
50.5 mln tonnes of ore at 1.84 g/tonne, or 3.0 mln oz of gold.
The asset is at an advanced exploration stage, located in a remote area of Irkutsk Region, 190 km
from Bodaibo, close to the company’s operating Zapadnoye mine and the Verninskoye
development project. The deposit was acquired in 2004 and Polyus Gold intends to launch it in
2012 with annual production of 130,000 oz. We now think that the asset has sufficient production
and financial visibility to model in, and thus include it in our NAV-based valuation of the company.
We assume that the asset will be launched in 2013, ramping up production to 130,000 oz by
2015. Open-pit mining will be used, with an average strip ratio of 2.1, and the mill will process 2.2
mln tpy of ore at a high recovery rate of 90%.The project contains free milling ores, though the
robustness of its economics will be tempered somewhat by existing infrastructural challenges and
unexciting ore grades.

Chertyvo Koryto production (mine life), bars, ’000 oz Chertyvo Koryto free cash flow versus total cash costs,
2010E
20E

150 120 600

120 80 500

40 400
90
0 300
60
-40 200
30 -80 100

0 -120 0
2015E

’10E ’11E ’12E ’13E ’14E ’15E ’16E ’17E ’18E ’19E ’20E
2012E
2013E
2014E

2016E
2017E
2018E
2019E

2021E

2025E
2020E

2022E
2023E
2024E

2026E
2027E
2028E
2029E
2030E

Chertovo Koryto free cash flow, $ mln

Chertovo Koryto total cash costs, $/oz (r.h. scale)

Source: Company, Troika Dialog estimates Source: Company, Troika Dialog estimates

Capex is estimated at $330 mln, and total cash costs are expected to be in the range of $350-500/oz.
Our estimated equity value for the asset is a modest $98 mln.

Cost inflation – the sword of Damocles

We remain convinced that it is particularly dangerous for any mining company to grow in the
current environment of rampant cost inflation, and thus prefer equities with front-loaded cash flows
and palpable cash generation that can be returned to shareholders. From this standpoint, Polyus
Gold, with its massive greenfield projects, back-end loaded production growth and deteriorating
mining conditions at the flagship Olympiada project, is surely something of a loser.
We believe that the market is still complacent regarding the inflation of costs in the Russian mining
space, with problems spanning from rising costs for steel/cement and consumables to equipment
availability/delivery problems, necessitating advance ordering of equipment with long lead times.
Skilled labor is becoming arguably the most important issue, as mining companies in Russia must
not only match average domestic salary growth, but also retain workers employed in distant regions
with harsh climates and difficult social conditions. We forecast that gold mining will face the most
serious labor issues, as this is currently a rapidly growing sector, unlike base metals, and a number
of large greenfield assets are to be launched in the next five to seven years at distant locations
(Magadan, Amur, Irkutsk, Krasnoyarsk and Chukotka), making hiring needs particularly acute. The
cost problem is further compounded by increasing domestic energy/gas prices, fuel costs and
railroad tariffs, as well as ruble appreciation.

9 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Cost inflation by item

2006 2007 y
o
y
Energy, R/MWth* 579.9 666.9 11.4%
Diesel, $/tonne 560.8 595.3 12.8%
Steel (hot rolled), $/tonne 499.4 563.2 15.0%
Oil (Brent), $/bbl 65.1 72.5 8.0%
Steam coal, $/tonne 25.0 27.0 6.2%
* average level of tariffs approved by energy suppliers to wholesale market
Source: Polyus Gold, Troika Dialog

The cost picture for Polyus Gold is further compounded by deteriorating mining conditions at
Olympiada, which led total cash costs to spike by 24% to $348/oz in 2007 (including excessive
stripping costs). We have now meaningfully upgraded our cost assumptions for the company to
reflect the prevailing inflationary environment.

Polyus Gold average total cash costs, 2004
15E, $/oz

500

400

300

200

100

0
’04 ’05 ’06 ’07 ’08E ’09E ’10E ’11E ’12E ’13E ’14E ’15E

Source: Company, Troika Dialog estimates

We also highlight that cost inflation is an issue not only on the operating line, but also on the capital
cost line, and thus equities with minimal capex requirements will surely be in the most advantageous
position. Polyus Gold has one of the most aggressive production profiles globally, and its colossal
capex has to fully bear the burden of cost inflation. The company recently revised its capex and
production guidance, now expecting output to reach 4.6 mln oz in 2015, up from 1.2 mln oz in
2007, coming at a cost of $5.1 bln, while it previously guided production of 3.9 mln oz in 2015 at a
cost of $3.4 bln. Thus, additional production now costs $1,500/oz, while the previous estimate
was $1,259/oz, a rise of 20%. The increase appears to be relatively mild thus far due to substantial
cost synergies of production expansion at Natalka, but nevertheless the company is forecast to
experience the severe brunt of the cost inflation on the capex line going forward.
We currently model in production of 3.0 mln oz in 2015, coming at a cost of $4.6 bln (expansion
and maintenance capex), or capex of $2,548/oz of additional production, way above the
management’s expectations.

10 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Polyus Gold production 2004
15E, ’000 oz

3,000 120
-
125
- 407
2,500 407
129 172
-
115 172
145 398
2,000
395 172
- 1,343
193 172 1,091
1,500 -
727
193
296
- - - - 158 392
- 172 179 183 193 172
- - - - 172
1,000 246 212 156 142 163 -
172 - 202 202 202
190
-

- - - 138 190
- --27 -

500 854 861 835 858 858 858

820 783 784 803 757 804

0
2004 2005 2006 2007 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E

Olympiada Verninskoye Natalka Zapadnoye

Kuranakh Blagodatnoye Lenzoloto Chertovo Koryto

Source: Company, Troika Dialog estimates

Polyus Gold capex requirements 2008
15E, $ mln

1,000
Olympiada Verninskoye
800
Natalka Zapadnoye
600
Kuranakh Blagodatnoye
400
Lenzoloto Chertovo Koryto
200
Other Exploration
0
’07 ’08E ’09E ’10E ’11E ’12E ’13E ’14E ’15E

Source: Company, Troika Dialog estimates

Divesture of exploration assets

We reiterate our view that the biggest drawback in Polyus Gold’s investment case is the lack of
discipline in its expansion strategy; it now faces a barely manageable growth pipeline. In spite of the
challenges presented by the current development projects, the company has continued to accrue
prospective exploration licenses in Russia, which have now arguably become more of a liability than an
asset on its balance sheet. The company is required to undertake ongoing exploration expenses under
the “use it or lose it” approach employed in Russia with regard to greenfield assets, but, in our view it
lacks the execution capacity to advance and develop these projects in addition to its current pipeline.
Licenses can indeed be acquired very cheaply in Russia, but the paradox is that they do not seem to
add any value to the company at this stage, and the unparallel exploration upside embedded in its
portfolio continues to be completely ignored by the market. Polyus Gold is a unique case globally,
whereby increases in its reserve estimates (which now stand at a staggering 71 mln oz under P&P)
have not reflected positively on its share price.

11 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Polyus Gold exploration assets’ carve out

Source: Company, Troika Dialog

We are thus fully supportive of the idea of divesting the exploration assets to crystallize their value,
which would also enable Polyus Gold to streamline its growth portfolio and focus on its development
properties. That said, the devil is in the details, and we find the management’s proposal of a carve-out
to the current shareholders as unconvincing, as we elaborated in our research “Gold: From the Depths
of Russia” of February 2008. Polyus Gold’s “non-gold-bug” shareholder base does not possess the
risk-reward characteristics to be interested in such a peculiar, risky vehicle as Polyus Exploration. Also,
conducting a carve-out at cost (accumulated exploration expenses) may understate the actual value of
the assets and allow participating shareholders to benefit at the expense of non-participating ones.
Thus, we are of the opinion that the transaction will be conducted as a divesture to all outside
investors, tapping into mining-focused funds globally.
While Interros cannot legally block the carve-out due to the way that it is structured on the
corporate level, the divesture process has been halted, though we expect it to resume once the
shareholder dispute is resolved.

Shareholders’ dispute – the good and the bad of it

The shareholder dispute initially provided a strong boost to the company’s share price ahead of the
AGM on June 26, 2008. However, it is now starting to have a pronounced detrimental effect on the
stock, as the company is increasingly perceived as being in the midst of a conflict, with the
management more concerned about corporate control issues rather than day-to-day operations.

Polyus Gold local share price

80

60

40

20

0
Jan ’07
Feb ’07
Mar ’07
Apr ’07
May ’07
Jun ’07
Jul ’07
Aug ’07
Sep ’07
Oct ’07
Nov ’07
Dec ’07
Jan ’08
Feb ’08
Mar ’08
Apr ’08
May ’08
Jun ’08
Jul ’08
Aug ’08

Source: Bloomberg, Troika Dialog

In 1H08 both Onexim Group and Interros were allegedly buying stock on the open market and
trying to sway the support of the minority shareholder. As we expected, Onexim Group eventually
carried the day and retained control over the miner. We estimate that the stake of two major
shareholders – Onexim Group and Interros – is now close to 30%, though Onexim Group is able to

12 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

control a 6.6% stake through subsidiary Jenington International, which naturally votes in line with
the Onexim Group-appointed management’s recommendations.

Polyus Gold BoD

Previous Polyus Gold BoD New Polyus Gold BoD
Name Affiliation Name Affiliation

Mikhail Prokhorov Onexim Group Mikhail Prokhorov Onexim Group

Ekaterina Salnikova Onexim Group Ekaterina Salnikova Onexim Group
Evgueni Ivanov Onexim Group Evgueni Ivanov Onexim Group
Valeri Rudakov Onexim Group Valeri Rudakov Onexim Group
Sergey Batekhin Interros Evgueni Yarovikov Interros
Pavel Skitovich Interros Andrey Klishas Interros
Kirill Parinov Interros Robert Buchan Independent
Valery Braiko Independent Valery Braiko Independent
Lord Patrick James Gillford Independent Lord Patrick James Gillford Independent
Source: Company, Troika Dialog

At the AGM in June, all four Onexim Group representatives – CEO Evgeny Ivanov, Mikhail
Prokhorov, Valery Rudakov, and Ekaterina Salnikova – retained their seats. Interros lost one seat
and now has two members: Andrei Klishas and Evgeny Yarovikov. Two independent directors were
reelected: Valery Braiko, who is supported by Onexim Group and Lord Patrick Gillford, who has the
backing of Interros. One new independent director, Robert Buchan, who was supported by
independent consultants Risk Metrics and Glass Lewis.
As Interros and Onexim Group have thus far demonstrated a complete lack of will to cooperate on a
range of issues, we believe that Interros has found itself in a troublesome position, as it is currently
subordinated to a minority position in the company. Interros’ financial position is currently
substantially weaker than that of Onexim Group (which has lately received a war chest of around
$12 bln from selling its 25% stake in Norilsk Nickel to UC RUSAL and its 50% stake in KM-Invest to
Interros), limiting its ability to make purchases on the open market.
We would thus expect Interros to look to sell its stake in Polyus Gold, most likely to an outside
strategic investor that will be capable of cooperating with Onexim Group as a controlling
shareholder. We again underline that state-controlled diamond producer ALROSA remains the most
viable contender (possibly using the financial muscle of state-owned banks for the purpose of the
transaction), though the emergence of other investors, including Oleg Deripaska’s Basic Element,
cannot be excluded. Should Interros dispose of its stake through selling to a strategic investor, we
would regard the event as positive.
We think that Onexim Group may also consider selling its stake to a strategic investor along with
Interros, or after Interros disposes of its stake, with ALROSA again emerging as a possible bidder,
though the valuations demanded by the selling party are naturally likely to be in the high range.
The major factor that has depressed Polyus Gold’s share price recently has been growing concern on
the part of the investment community over the management’s ability to concentrate on day-to-day
operations during the ongoing shareholder dispute, especially considering the challenges that the
company faces with its aggressive pipeline. We believe that unless the shareholder dispute is resolved
in some shape or form, the market will continue to apply a discount to the company’s valuation.

Financial picture
As we expected, the picture painted by the company’s 2007 financial results was not rosy at all,
with cost inflation eroding profitability alongside flat production. The generous options expense in
the amount of $133 mln for the year also depressed the headline results.

13 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Polyus Gold 2007 IFRS results, $ mln

2007A 2006 y
o
y 2007E A/E 2H07A 1H07 H
o
H

Revenues 867 753 15% 855 1% 558 309 80%

Gross income 332 311 7% 299 11% 227 105 116%
Gross margin 38% 41% 35% 41% 34%
EBITDA 146 291
50% 146 0% 187 (41) n/m
EBITDA margin 17% 39% 17% 34% n/m
EBITDA, adjusted* 279 291
4% 278 0% 187 92 103%
Adjusted EBITDA margin 32% 39% 33% 34% 30%
Net income 41 1,160
96% 64
36% 135 (94) n/m
Net margin 5% 154% 7% 24% n/m
Net income, adjusted* 88 132
33% 104
16% 95 (7) n/m
Adjusted net margin 10% 18% 12% 17% n/m

Production, ’000 oz 1,215 1,215 0%

Realized price, $/oz 706 612 15%
Total cash costs, $/oz 348 284 22% 347 0%
* adjusted for management options program expense and income from investments
Source: Company, Troika Dialog estimates

We have revisited our valuation of Polyus Gold, adjusting both our operating and capital costs
assumptions upward. We have also increased the probability discount for Natalka from 25% to
35%, as we believe that this more appropriately reflects the risks of this massive project, which is
still in the feasibility stage, though we would look to adjust this discount as the visibility of project
improves. We also now add to our valuation the Chertyvo Koryto project and have brought the
Blagodatnoye launch date forward from 2011 to 2010.
We have increased our cost of equity from 11.0% to 12.0% (the sum of a risk-free rate of 7.4%
and equity-risk premium of 4.6%) to account for the higher corporate governance risks at the
company due to the shareholder conflict and a broader de-rating of Russian equities.

Polyus Gold estimate changes, $ mln

2008E 2009E 2010E
New Old Diff New Old Diff New Old Diff

Revenues 1,131.3 1,135.0 0% 1,125.3 1,087.9 3% 1,468.3 1,312.2 12%

EBITDA 389.9 439.2 -11% 329.1 340.2 -3% 541.1 461.5 17%
EBITDA margin 34% 39% 29% 31% 37% 35%
Net income 233.4 296.2 -21% 182.7 189.5 -4% 307.3 252.0 22%
Net margin 21% 26% 16% 17% 21% 19%
Source: Troika Dialog estimates

Olympiada and Natalka are the key constituents in the company’s NAV.

Polyus Gold projects' value, $ mln

NAV Probability Risked Polyus Gold Risked P/NAV Equity
of the project of success NAV share attributable NAV
$ mln $ mln $ mln $ mln
Olympiada 2,019 100% 2,019 100% 2,019 1.60 3,230
Verninskoye 298 80% 238 100% 238 1.60 381
Natalka 2,047 65% 1,331 93% 1,331 1.60 2,129
Zapadnoye 45 100% 45 100% 45 1.60 72
Kuranakh 317 100% 317 99% 317 1.60 508
Blagodatnoye 751 80% 601 100% 601 1.60 962
Lenzoloto 129 100% 129 68% 129 1.60 207
Chertovo Koryto 87 70% 61 100% 61 1.60 98
Nezdaninskoye 278*
Total 7,865
* using a target multiple of $150/oz of reserves
Source: Polyus Gold, Troika Dialog estimates

14 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Polyus Gold valuation, $ mln

$ mln $ per share $ per ADR

Olympiada 3,230 18.1 9.1

Verninskoye 381 2.1 1.1
Natalka 2,129 12.0 6.0
Zapadnoye 72 0.4 0.2
Kuranakh 508 2.9 1.4
Blagodatnoe 962 5.4 2.7
Lenzoloto 207 1.2 0.6
Chertovo Koryto 98 0.5 0.3
Nezdaninskoye 278 1.6 0.8
Total value of projects 7,865 44.2 22.1

Less: corporate SG&A (1,100) (6.2) (3.1)

Fundamental value of assets 6,765 38.0 19.0
Less: net debt (1,500) (8.4) (4.2)
Fundamental equity value 8,265 46.4 23.2
Source: Polyus Gold, Troika Dialog estimates

We decrease our target price from $55.80 to $46.42 per share ($27.90 to $23.21 per ADR), but
upgrade our recommendation to BUY. We now view the stock as more of a long-term value story
with appealing greenfield projects and exploration upside, though fail to see short-term catalysts in
view of poor earnings momentum and the ongoing shareholder dispute. We would recommend
Polymetal and Peter Hambro Mining as the best vehicles to play the underlying precious metals
market in Russia at present, as both possess an enviable project pipeline, strong record of execution
and solid cash generation.

15 TROIKA DIALOG
16

AUGUST 28, 2008

Gold companies peer group
Ticker Country Share price Mcap EV EV/S EV/EBITDA P/E EV/production EV/reserves EV/resources
$ $ mln $ mln ’07 ’08E ’09E ’10E ’07 ’08E ’09E ’10E ’07 ’08E ’09E ’10E in ’08, $/oz $/oz* $/oz**

CIS Gold Miners

Polyus Gold PLZL LI Russia 29.75 5,297 3,850 4.5 3.4 3.9 3.2 14.0 9.9 13.4 8.8 60.4 29.4 35.7 19.3 3,125 56 27
KazakhGold KZG LI Kazakhstan 15.11 765 780 4.4 2.7 1.6 1.6 10.8 4.3 2.6 2.6 34.7 9.2 4.1 5.4 2,032 58 30
Peter Hambro Mining POG LN Russia 17.08 1,386 1,642 7.7 5.3 2.7 1.9 13.5 8.4 4.0 2.6 42.9 20.0 11.1 5.0 4,865 819 203
Highland Gold Mining HGM LN Russia 2.06 670 552 2.8 3.1 3.1 2.7 10.2 7.0 5.9 5.6 36.6 13.0 9.2 10.4 2,833 148 39
Polymetal PMTL LI Russia 5.64 1,777 1,927 6.2 3.6 2.9 2.6 61.7 6.6 5.1 4.7 neg 11.1 8.3 7.6 3,286 160 127
High River Gold Mine HRG CN Canada 0.75 230 450 4.0 2.0 1.3 1.4 23.9 6.9 3.1 3.3 neg 12.5 4.0 4.2 1,278 185 129
Centerra Gold CG CN Canada 3.95 854 789 2.1 1.1 0.9 1.0 7.9 2.3 1.7 1.7 21.3 4.0 2.8 2.7 989 113 62
Average 4.8 3.3 2.5 2.2 21.2 6.9 5.6 4.7 32.2 11.3 7.8 6.6 2,849 224 90
Median 4.4 3.1 2.7 1.9 13.5 6.9 4.0 3.3 34.7 11.1 8.3 5.4 2,833 148 62

Senior Gold Miners

Newmont Mining NEM US United States 44.20 20,185 23,970 4.3 3.6 3.2 3.1 16.2 8.3 7.1 6.8 neg 16.4 14.4 13.7 4,566 277 228
AngloGold Ashanti ANG SJ South Africa 26.65 9,345 11,172 3.5 3.5 2.3 2.2 9.9 15.6 5.8 5.9 neg neg 11.3 11.3 2,234 153 54
Gold Fields GFI SJ South Africa 9.14 5,968 6,572 2.6 2.2 1.7 1.6 6.6 5.5 4.2 3.8 21.1 15.1 8.3 7.7 1,546 72 28
Barrick Gold ABX CN Canada 34.49 30,070 31,225 4.9 3.7 3.4 3.7 10.2 7.5 6.8 7.7 17.4 13.9 11.9 13.2 4,074 251 178
Harmony Gold Mining HAR SJ South Africa 8.56 3,451 3,937 3.3 3.3 2.2 1.9 18.4 16.2 5.7 4.8 42.8 92.8 8.9 7.4 2,362 73 14
Kinross Gold K CN Canada 16.52 10,161 10,037 9.2 6.1 4.4 4.5 28.2 14.1 7.9 8.1 56.9 24.0 12.0 14.2 5,187 215 174
Newcrest Mining NCM AU Australia 22.58 10,237 13,971 9.5 6.8 6.7 6.3 28.9 n/a 13.7 11.4 60.8 23.9 21.4 16.9 7,552 421 253
Goldcorp GG US Canada 33.52 24,175 23,034 10.4 8.7 6.9 6.4 21.4 17.8 13.1 12.3 54.9 42.7 28.1 25.6 9,005 531 324
Minas Buenaventura BVN PE Peru 22.05 6,061 6,299 8.0 6.8 6.6 6.5 15.8 13.7 12.5 15.8 16.9 9.4 9.0 10.7 5,096 474 299
Average 6.2 5.0 4.2 4.0 17.3 12.3 8.5 8.5 38.7 29.8 13.9 13.4 4,625 274 172
Median 4.9 3.7 3.4 3.7 16.2 13.9 7.1 7.7 42.8 20.2 11.9 13.2 4,566 251 178

Intermediate Gold Miners

Agnico-Eagle Mines AEM CN Canada 56.63 8,138 7,652 16.6 15.0 8.5 5.6 38.4 35.3 16.5 9.8 53.8 83.0 34.8 20.4 24,216 458 403

POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Eldorado Gold ELD CN Canada 7.91 2,734 2,585 13.7 8.3 6.0 5.4 38.3 13.9 9.8 8.9 77.2 25.0 15.1 13.1 8,420 338 248
IAMGold IMG CN Canada 6.34 1,874 1,779 2.6 2.1 2.3 3.1 9.4 5.3 6.1 7.8 32.9 14.0 11.0 14.4 1,924 223 79
Lihir Gold LGL AU Australia 2.00 4,368 5,005 10.3 6.8 4.6 4.5 31.7 13.5 8.2 7.4 47.1 20.5 12.4 10.9 6,416 218 143
Western Goldfields WGI CN United States 1.72 235 282 60.4 2.3 2.1 1.9 neg 5.7 4.8 3.8 neg 10.5 5.3 4.7 1,763 102 66
Randgold Resources RRS LN South Africa 43.73 3,333 3,079 10.5 8.5 7.8 5.5 39.0 23.3 19.9 11.9 85.0 46.6 40.0 21.3 7,014 396 288
Yamana Gold YRI CN Canada 10.75 7,511 7,590 10.2 4.9 3.7 3.3 19.6 8.1 5.8 5.3 47.8 16.3 9.7 9.6 6,432 424 247
Jaguar Mining JAG CN Canada 6.78 436 446 9.1 4.2 2.2 1.5 neg 9.6 4.2 2.8 neg 51.6 9.1 5.9 3,778 442 155
Northgate Minerals NGX CN Canada 1.61 411 372 1.1 0.7 0.8 1.3 5.5 1.8 1.7 2.2 10.4 4.4 4.8 8.7 1,008 202 36
Alamos Gold AGI CN Canada 5.70 544 504 6.8 3.9 3.3 2.9 26.5 7.3 5.4 5.2 >100 18.6 11.1 8.7 3,731 240 146
Average 14.1 5.7 4.1 3.5 26.0 12.4 8.2 6.5 50.6 29.0 15.4 11.8 6,470 304 181
Median 10.2 4.5 3.5 3.2 29.1 8.8 5.9 6.3 47.8 19.5 11.1 10.2 5,097 289 151
* proven and probable reserves or B+C1 reserves under GKZ standards
** M&I resources inclusive of reserves or B+C1+C2 resources under GKZ standards
Note: Reserves, resources and production are in gold equivalent.
Source: Companies, Bloomberg, I/B/E/S, Thomson, Troika Dialog estimates
TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Ownership structure Polyus Gold IFRS financials, $ mln

2007 2008E 2009E 2010E 2011E 2012E 2013E
INCOME STATEMENT
Revenues 867 1,131 1,125 1,468 1,673 2,404 2,631
COGS (535) (670) (710) (850) (995) (1,252) (1,324)
Onexim
Gross income 332 461 415 619 678 1,152 1,306
30.0%
Gross margin 38.3% 40.7% 36.9% 42.1% 40.5% 47.9% 49.7%
Other
40.0% SG&A (262) (161) (183) (216) (244) (294) (323)
EBITDA 146 390 329 541 611 1,072 1,229
Adjusted EBITDA 279 390 329 541 611 1,072 1,229
EBITDA margin 32.2% 34.5% 29.2% 36.9% 36.5% 44.6% 46.7%
DD&A (92) (118) (127) (171) (210) (248) (282)
EBIT 54 272 202 371 400 823 947
Interest income (7) (3) (3) (3) (4) (5) (7)
Interros Forex gain – – – – – – –
30.0%
Other gains 10 – – – – – –
Pre-tax income 118 340 244 411 413 866 993
Income tax (71) (102) (59) (99) (99) (208) (238)
Minority interest (6) (4) (3) (5) (5) (11) (13)
Exceptionals – – – – – – –
Net income 41 233 183 307 308 647 742
Adjusted net income 88 180 148 274 296 611 702
Net margin 10.1% 15.9% 13.2% 18.6% 17.7% 25.4% 26.7%
EPS, $ 0.23 1.31 1.03 1.73 1.73 3.63 4.17
Adjusted EPS, $ 0.49 1.01 0.83 1.54 1.66 3.43 3.94
BALANCE SHEET
Assets
Cash and equivalents 1,497 1,527 944 577 326 502 968
Receivables 40 52 51 67 77 110 120
Inventories 232 291 308 368 432 543 574
Other current assets 133 174 173 225 257 369 403
Total current assets 1,902 2,043 1,476 1,238 1,091 1,523 2,066
Total non-current assests 1,797 2,073 2,820 3,448 3,994 4,430 4,694
Total assets 3,699 4,116 4,295 4,686 5,085 5,953 6,761
Liabilities
Short-term borrowings 21 27 27 35 40 58 63
Payables 22 27 29 34 40 51 54
Other current liabilities 156 167 166 192 221 277 292
Total current liabilities 198 221 222 262 302 385 409
Long-term borrowings – – – – – – –
Other non-current liabilities 265 439 444 512 562 700 742
Total non-current liabilities 265 439 444 512 562 700 742
Total liabilities 463 660 666 774 864 1,086 1,151
Minority interest 47 34 24 – – – –
Equity 3,189 3,422 3,605 3,912 4,221 4,868 5,610
Total liabilities and equity 3,699 4,116 4,295 4,686 5,085 5,953 6,761
Net debt/(cash) (1,476) (1,500) (917) (542) (286) (444) (905)
CASH FLOW STATEMENT
Net income 41 233 183 307 308 647 742
Minority interest (6) (4) (3) (5) (5) (11) (13)
DD&A (92) (118) (127) (171) (210) (248) (282)
Working capital change (64) (65) (15) (70) (67) (134) (39)
Other assets change 24 131 (4) 17 48 81 22
Operating cash flow 94 417 290 424 500 843 1,008
Maintenance capex (480) (389) (873) (793) (753) (673) (543)
Expansionary capex – – – – – – –
Other investments (1) (4) 0 (6) (3) (12) (4)
Investing cash flow (481) (393) (873) (799) (757) (685) (547)
Change in debt 6 6 (0) 8 5 18 5
Dividends paid (21) (45) (37) (68) (74) (153) (175)
Share issues/(purchases) 194 – – – – – –
Other 1 – – – – – –
Financing cash flow 201 6 (0) 8 5 18 5
Forex effects – – – – – – –
Net change in cash (187) 30 (584) (366) (251) 176 466
RATIOS
P/E 60.4 29.4 35.7 19.3 17.9 8.7 7.5
EV/EBITDA 14.0 9.9 13.4 8.8 8.2 4.5 3.6
P/BV 1.7 1.5 1.5 1.4 1.3 1.1 0.9
ROE 2.8% 5.3% 4.1% 7.0% 7.0% 12.5% 12.5%
ROIC 2.6% 5.1% 4.0% 6.9% 6.9% 12.3% 12.3%
Dividend per share, $ 0.12 0.25 0.21 0.38 0.42 0.86 0.99
Dividend yield 0.4% 0.9% 0.7% 1.3% 1.4% 2.9% 3.3%
P/S 6.1 4.7 4.7 3.6 3.2 2.2 2.0
P/CF 56.6 12.7 18.3 12.5 10.6 6.3 5.3
Revenue growth 15% 30% -1% 30% 14% 44% 9%
EBITDA growth -4% 40% -16% 64% 13% 76% 15%
EPS growth -33% 105% -18% 84% 8% 107% 15%
Source: Company, Troika Dialog estimates

17 TROIKA DIALOG
AUGUST 28, 2008 POLYUS GOLD – OLYMPIADA SITE VISIT, INVESTMENT CASE REVISITED

Disclosure appendix
Important US Regulatory Disclosures

An affiliate of Troika Dialog USA makes a market in the securities of Polyus Gold.

The research analysts, strategists, or research associates principally responsible for the
preparation of this research report have received compensation based upon various factors,
including quality of research, investor client feedback, stock picking, competitive factors, firm
revenues and overall investment banking revenues.

Analyst certification
The following analyst(s) hereby certify that the views expressed in this research report accurately
reflect such research analyst’s personal views about the subject securities and issuers and that no
part of his or her compensation was, is, or will be directly or indirectly related to the specific
recommendations or views contained in the research report: Sergey Donskoy, Ilya Klenin,
Mikhail Stiskin.

18 TROIKA DIALOG
Senior Management

Chairman of Board of Directors and CEO, Head of Investment Banking

Troika Dialog Group Ruben Vardanian and Global Markets Jacques Der Megreditchian

Chief Economist,
Managing Director Evgeny Gavrilenkov

Research Department +7 (495) 258 0511

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Strategy Transport
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23, Malaya Morskaya Street Fax +7 (846) 273 3328
St Petersburg, 190000, Russia
Phone +7 (812) 380 6850 Ufa
Fax +7 (812) 380 6851 KPD Business Center
132/3, Prospect Oktyabrya, 8th floor
Ekaterinburg
Ufa, 450069, Russia
Office 201, Ekaterinburg World Trade Center Phone +7 (347) 292 2026
44, Kuibyshev Street Fax +7 (347) 279 8881
Ekaterinburg, 620026, Russia
Phone/fax +7 (343) 310 7000 Vladivostok
6, Mordovtseva Street
Irkutsk
Vladivostok, 690091, Russia
19, Lenina Street Phone +7 (4232) 49 9925
Irkutsk, 664003, Russia Fax +7 (4232) 49 9926
Phone/fax +7 (3952) 56 36 36
Troika Dialog USA, Inc.
Kazan
Carnegie Hall Tower
“Suvar Plaza” Office Center 152 West 57th Street, 44th Floor
6, Spartakovskaya street New York, NY 10019
Kazan, 420107, Tatarstan, Russia Phone +1 (212) 300 9600
Phone/fax +7 (843) 526 5522 Fax +1 (212) 300 9601
Nizhni Novgorod Troika Dialog UK
22/4, Minina Street 85 Fleet Street, 4th Floor
Nizhni Novgorod, 603155, Russia London, EC4Y 1AE
Phone +7 (8312) 19 7796 Phone +44 (20) 7583 3257
Fax +7 (8312) 19 7798 Fax +44 (20) 7822 0779
Novosibirsk Troika Dialog Ukraine
1, Dimitrova Prospekt 6, Rylskyi Pereulok, 6th floor
Novosibirsk 630004, Russia Kyiv 01025, Ukraine
Phone +7 (383) 210 5502 Phone +380 (44) 207 3780
Fax +7 (383) 210 5503 Fax +380 (44) 207 3784
Internet
http://www.troika.ru wap.troika.ru

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