Download 2004 Annual Report - Polymetal

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Gennady N. Larionov,Head of DesignDepartmentAlexander S. Aleksanin,Deputy ManagingDirectorBoris V. Aksenov,Head of TechnologicalResearchDepartmentVorontsovskoye depositdeveloping [constructing] Stage IIof the [a] mining and metallurgyfacility at the Vorontsovskoyedeposit;designing [constructing] an orepreparation facility for pro−cessing primary ore using thecarbon−in−pulp method. Projectdesign was carried out simul−taneously with construction.Design technology, previouslyadopted by the company, de−creased the construction timeof the ore enrichment facility byone year and allowed for miningand processing 600,000 addi−tional tons of primary ore;designing a project for reconstructing [pairing] a facility thatwill improve repair work qual−ity and minimize non−productioncosts;technological study of processing off−balance oxidized ore atthe Vorontsovskoye deposit,which allowed additional produc−tion of metal from off[non]−bal−anced ore in 2004;modelling of heap leaching fromtwo layers of rock. This modelprovided initial data to designtwo−level stacks without usingany additional premises for thispurpose. It also allowed for ad−ditional gold leaching from previ−ously used stacks with minimalproduction costs;In the past year, the companybegan working with third−partyclients. Today, it is the leadingcompany in Russia for designing[and constructing] solid mineralresource projects.Mikhailovsky GOK(Ore Enrichment Works; MGOK)In 2004, the company designedthe flotation shop of the crush−ing and enrichment facility at theMikhailovsky GOK (one of Russia’sleading iron ore processing com−panies). The project increasediron content in the concentrateto 70% and reduced silicon oxidesto less than 3%. This was the firsttime that this technology wasused at a Russian production facil−ity.50 Year Oktyabryadeposit (Kazakhstan)During 2004, Polymetal Engineer−ing estimated the efficiency of ex−ploration efforts at the 50 YearOktyabrya copper pyrite deposit(Kazakhstan).The project was completed in acondensed time period and the cli−ent was kept well−informed aboutintermediate progress [results.This allowed for optimizing miningoperations, in relation to currentproduction costs, determiningthe optimal production capacity ofthe facility for processing ore intocopper concentrates and select−ing appropriate mining and trans−portation equipment. The projectreport contained detailed infor−mation and well−formulated sug−gestions that allowed the clientto optimally structure its financialresources, quickly prepare andsign contracts for designing andconstructing the enrichment fa−cility and purchasing mining andtransportation equipment.Syrybmet depositIn 2004, the company studied thecapacity of tin ore at the Syryb−met deposit to create ore−dress−ing technology. The company pre−pared specifications for designingthe plant at the deposit with aproduction capacity of 1,000,000tpa of ore.The professionalism of scientistsat Polymetal Engineering enablesthe company to carry out complexdesign and technological studiesin the areas of precious, ferrousand nonferrous metals. In addi−tion to the previously mentionedprojects, in 2004, the companyconducted more than 70 studiesaimed at developing technologies,expanding companies’ ore re−serves, upgrading existing tech−nologies and finding new reagentsand processes.36 Polymetal annual report 2004
GlobalpositioningIn 2004, world silver productionwas 634.4 mln. oz. (a 4% increasecompared with 2003). The mostsignificant contribution to growingglobal production came from pri−mary silver production mines thatincreased their production by 23.2mln. oz.Top 10 world silver producers, 2004 (mln oz.)CountryProductionMexico 99,2Peru 98,4Australia 71,9China 63,8Poland 43,8Chile 42,8Canada 40,6USA 40,2Russia 37,9Kazakhstan 20,6Source: GFMS, Silver InstituteAccording to 2004 results,Polymetal demonstrated themost rapid production growthamong leading silver producers.In 2004, Polymetal accounted for2.7% of global silver production.In Russia, silver productionreached 37.9 mln. oz., including21.4 mln. oz. from primary produc−tion. Polymetal remained Russia’sleading silver producer and ac−counted for 81% of the country’stotal primary production.Top 10 world silver producers, 2004 (mln. oz.)Company Country ProductionBHP Billiton Australia 49,7Industrias Penoles Mexico 44,5KGHM Polska Miedz Poland 43,2Grupo Mexico Mexico 19,4Kazakhmys Kazakhstan 17,7Polymetal Россия 17,3Barrick Gold Canada 17,3Rio Tinto plc. Great Britain 14,8Coeur d’Alene Mines USA 14,1Cia de Minas Buenaventure Peru 12,8Source: GFMS, Silver InstituteIn 2004, the Dukat and Lunnoye deposits strengthened their positions among the top 10 global silver produc−tion deposits.Global positioning37
Page 1 and 2: Annual report2004St. Petrsburg1
Page 3 and 4: Annual Report2004St. Petersburg3
Page 5 and 6: FinancialhighlightIndicator Meas. u
Page 7 and 8: 2004Key eventsFebruarynew managemen
Page 9 and 10: koye gold mine. This cost increasec
Page 11 and 12: MineralResourcesVladimir T. Ryabukh
Page 13 and 14: Igor V. Venatovsky,First Deputy CEO
Page 15 and 16: Sergey A. Cherkashin,CFOSalesFinanc
Page 17 and 18: Denis G. Pavlov,Head of TreasuryDep
Page 19 and 20: At the Dukat and Lunnoye depos−it
Page 21 and 22: ProductionfacilitiesoverviewProduct
Page 23 and 24: Victor R. Wulfert,Managing Director
Page 25 and 26: Victor R. Wulfert,Managing Director
Page 27 and 28: Andrey V. Novikov,Managing Director
Page 29 and 30: Sergey G. Antipin,Managing Director
Page 31 and 32: Vorontsovskoye(Northern Urals Gold,
Page 33 and 34: Alexander V. Bulavin,Head of Licens
Page 35: Dukat depositconducting a feasibili
Page 39 and 40: CorporategovernancePolymetal follow
Page 41 and 42: Hazardous facilities at the deposit
Page 43 and 44: Personnel at mining facilitiesCompa
Page 45 and 46: Upgrading skillsIn 2004, the compan
Page 47 and 48: ManagementVitaly NESISCEOMr. Nesis
Page 49 and 50: ZAOPricewaterhouseCoopers AuditSred
Page 51 and 52: JSC “ISPA “POLYMETAL”STATEMEN
Page 53 and 54: JSC “ISPA “POLYMETAL”CONSOLID
Page 55 and 56: The Group’s 100% interest in avar
Page 57 and 58: Deferred developmentexpendituresIn
Page 59 and 60: NOTE 3Variable Interest EntityStart
Page 61 and 62: Investments mainly represent or−d
Page 63 and 64: Loans from NIKoil Bank in total ofU
Page 65 and 66: Future payments under capital lease
Page 67 and 68: Note 24Income TaxThe income tax exp
Page 69 and 70: In accordance with FAS 141, thecont
Page 71 and 72: NOTE 30Subsequent eventsBank loan r
Page 73 and 74: Vorontsovskoye (Northern Urals Gold
Page 75 and 76: Dukat and Lunnoye (Magadan Silver,
Page 77 and 78: 1) Per ounce of gold produced or so

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