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Company Information for Petropavlovsk PLC

AIM-POG

www.petropavlovsk.net

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Company Statement

Petropavlovsk plc is a London-listed mining and exploration company with its principal assets located in Russia. The Group is focused on the acquisition, exploration, development and production of mineral deposits with a current focus on its precious metal deposits and, in future, the development of its iron ore assets as and when the iron ore and project finance markets recover.

The Group has a number of production and exploration assets across Russia with its principal operations located in the Amur, a region in the Russian Far East that borders China.

The Group currently produces gold from its own mines and from a number of joint ventures. In 2009, the Group produced 486,800 oz of gold, making it the third largest gold producer in Russia.

Current Operations

Gold

The Amur Region is home to the Group's primary operations and a large proportion of its development assets. The region has a good transport system, based on two of Russia's key railroads, and good access to low cost electricity from two large hydroelectric plants - providing a sound base for gold production.

Pokrovskiy - Overview
The Pokrovskiy mine is one of the largest producing gold mines (by annual production value) in the Amur Region and has been in operation for ten years, with the first gold having been recovered from the mine in 1999. The Pokrovskiy mine is currently one of the key producing assets of the Group.

The mine has a well developed infrastructure, including electricity supply, water supply and a road network. It also has a heating plant, laboratory, accommodation, a canteen and offices.

Access to the Pokrovskiy mine is either by air service from Blagoveschensk to Zeya (88 km from the mine) or by the Trans-Siberian Railway from Khabarovsk (18 hours) to Tygda (10 km from the mine). The car journey from the regional capital Blagoveschensk to the mine takes approximately 7 hours.

Pioneer - Overview
The Pioneer mine is located in the Amur Region, approximately 35km from the Pokrovskiy mine. The Pioneer licence was acquired by Pokrovskiy Rudnik in 2001 and since then an extensive exploration programme has been carried out at this deposit. As a result of this, Pioneer's first stage production facility came into production in April 2008.

After the successful ramping up of the first milling line at Pioneer and having exceeded the Company's production forecast for the deposit in 2008, the second milling line is under construction and due for commissioning in the second half of 2009. It is expected that the mill will ramp up to 3.2 million tonnes of annual capacity by the end of 2009. The construction of the third line is also ongoing and it is expected to be commissioned in the second half of 2010. It is expected that the plant will achieve its full designed capacity of 5.4 million tonnes of oxide material in 2011 and will be converted in 2014 to treat refractory material.

On 1 October 2008 Peter Hambro Mining Plc was proud to receive the MINEX Annual Industry Award for "Developer of the Year" in recognition of its successful exploration, development and launch of the Pioneer mine.

Malomir - Introduction
Malomir is at an advanced stage of development. The geological exploration work carried out at the Malomir licence area indicated that it consists of three separate deposits: the Malomir deposit, the Ozhidaemoye deposit and the Quartzitovoye deposit.

In 2008, the discovery of high-grade non-refractory ore at the Quartzitovoye deposit caused the Company to review its development plans for Malomir to allow this area to be explored further during the remainder of 2008 and early 2009. This discovery has significantly changed the economics of Malomir. The structure and mineralisation of the Quartzitovoye deposit are now fairly well understood and exploration will continue for further similar high-grade zones in the Malomir licence area.

The Company's revised plans, reflecting the new results from Quartzitovoye, provide for Malomir to be commissioned in the second half of 2010 with expected production in that year of between 136,000 oz and 181,000 oz. This production is expected to increase to 187,000 oz in 2011 and between 193,000 oz and 240,000 oz in 2012. The Malomir mine is proposed to be mined by the open pit method and brought into production in the same "modular" fashion that the Group used to develop Pokrovskiy and is currently using at Pioneer. This gradual phasing in of production lines allows for optimal capital expenditure as revenues from the first line's production (from Quartzitovoye) can be used to expand the plant.

Preparations for the commencement of production at Malomir were undertaken in 2008, with all pre-design work being completed as well as the delivery of mining equipment. Construction of the accommodation camp began and the necessary permits for the construction of the plant, roads, tailings and pit were received. A 110 kw power line and an electricity substation are currently under construction, with all equipment and components in place. A pre-feasibility study, including a preliminary open pit design, has been completed by ZAO Peter Hambro MIning Engineering, an indirect subsidiary of the Company, and is expected to be approved by GKZ (the Russian State Commission for Reserves and Resources) by the end of 2009.

Tokur - Introduction
The Tokur licence area, which covers 4.8 km2, is located just 70 km away from Malomir. It was acquired by Group in 2003 and has since become an important base for the Group in this part of the Amur Region; with infrastructure from previous operations at the Tokur underground mine still in place and laboratory and mineral processing facilities on-site. This fully accredited laboratory at Tokur was built by the Group in order to assay samples from Tokur, Malomir and Albyn, as well as other assets in the Amur Region. Further work is ongoing to develop a regional test plant for gravitational, flotation and cyanidation metallurgical work for the Pioneer, Malomir and Albyn assets.

The presence of gold mineralisation in this part of the Amur Region has been known since 1901. Since then, there have been alluvial operations close to the Albyn licence area and Tokur itself was also subject to underground mining during the Soviet period to a depth of 400 m, producing 35 tonnes of gold. Many specialists have remained in the area, residing in settlements such as Zlatoustovsk, which is the nearest settlement to Albyn. It has a 35 kv electric powerline, a small airfield and an all-seasons road connecting it to the Baikal Amur railway.

Osipkan
The licence area lies just a few kilometres to the south of Tokur, in the north-east of the Amur Region, with very similar geology: a monotonous series of green schists of Paleozoic age. In 2008, the results of geochemical and geophysical surveys carried out in 2007 by the Company were confirmed by four trenches across the south central area where a tectonic zone has been discovered at the contact of Paleozoic green slates with sandstones and siltstones. The thickness of this zone is 300 to 350 metres, and lateral extent 2.7km. From assay data of channel samples in this zone, 20 ore intervals of thickness from 1 to 11.2 metres have been found. Gold grades vary from 0.9 to 8.82g/t. The length of the orebodies has not been determined. According to the characteristics found here, the Company's geologists expect the discovery of a major gold deposit. From geological indicators this zone is similar to the Glavniy fault zone of the Tokur deposit located 10 to 11km to the north.

Albyn - Introduction
The Albyn deposit is located approximately 45km south east of Tokur and approximately 485km from Pokrovskiy, in the Selemdzhinskiy area of the Amur Region along the bank of the river Kharga. Since 1901, gold mineralisation has been known to exist in this area and it was worked until 1955 for gold and scheelite (tungsten). Mineralisation is in quartz veins similar to those at Tokur.

Ore at Albyn contains large particles of visible gold, making assay testing, and as a result exploration works, challenging. However, Albyn ores are very easily treatable. Metallurgical studies have shown the following: by gravity separation it is possible to recover between 79.3 per cent. and 95.2 per cent., by sorption cyanidation between 92.0 per cent. and 97.3 per cent. and by heap-leaching between 50.3 per cent. and 89.1 per cent. This has led the Company to plan to construct a 1.5 mtpa resin in pulp (RIP) plant for gravity separation at Albyn. It is intended to commission this plant in 2011/2012 with initial output of 50,000 oz ramping up to 100,000 oz in the following year.

Iron ore

Principal Iron Ore Assets
The Group's principal iron ore assets are Kuranakh, Garinskoye, the Garinskoye Flanks and its interest in Bolshoi Seym which are located in the Amur Region, K&S and Kosteningskoye which are located in the EAO and the titanium sponge joint venture which is located in Jianlong in China.

Kuranakh
LLC Olekminsky Rudnik, a wholly owned subsidiary of the Company, holds the licence for the exploration and development of the Kuranakh ilmenite and titanomagnetite deposit in the north west of the Amur Region.

The licence covers an area of 85km2 and was explored extensively both during the Soviet era and subsequently by the Group.
Kuranakh - Highlights 2008

First sales of iron ore pre-concentrate achieved
Crushing and screening plant operational
Initial development of open pit completed
Progress on construction of beneficiation plant and infrastructure

K & S
The licences over the two deposits were granted to LLC Rubicon (now known as KS GOK) in February 2006 and have a term of 20 years, which is extendable with the consent of the licensing authority. In April 2006, Aricom acquired an option to purchase 50% of LLC Rubicon which holds the licences to develop the Kimkanskoye and Sutarskoye (K&S) iron ore deposits. In June 2006, Aricom acquired the 50% interest in K&S not subject to the option.

Garinskoye
In October 2006 Rosnedra (the Russian Federal Subsoil Service) initiated a tender for the licence to mine iron ore on the Garinskoye deposit. The supporting documentation estimated that the deposit contained iron ore reserves and resources of 388.8 million tonnes in the Russian categories A, B, and C with an average grade of 41.3%. Of the A, B and C1 category reserves, 39% (82.5 million tonnes) were defined as ‘rich ore' and contained an average grade in excess of 50% Fe.

Garinskoye - Highlights 2008

Completion of initial exploration drilling
Completion of Public Enquiry

Bolshoi Seym - Background
In February 2006, Aricom entered into a heads of agreement with Timia, a company related to Interros, which is the major shareholder in OJSC Norilsk Nickel. The heads of agreement related to the establishment of a new holding company for LLC Uralmining ("Uralmining"), the company that owns the licence to develop the Bolshoi Seym deposit. The holding company is 49% owned by Aricom and 51% owned by Timia with Aricom appointing the General Director of Uralmining.

Kostenginskoye and Garinskoye Flanks

Background
In March 2008, Aricom acquired options to purchase two licences close to the existing K&S and Garinskoye projects. The options were acquired from two Cypriot companies, which indirectly held the licences, with two cash payments of US$22.5 million paid at the time of the announcement. Subsequently, in September, the options were exercised and a further payment was made consisting of the allotment and issue of 10,937,500 (21,875,000 in total) ordinary shares of £0.001 each in the capital of Aricom credited as fully paid to the sellers.

Kostenginskoye
The Kostenginskoye licence covers an area located approximately 25km to the south of the Group's K&S project. This will provide significant natural expansion potential to the existing project at K&S.

To date, preliminary site surveying and aerial magnetometer surveys have taken place at Kostenginskoye. The programme for the exploration of the deposit was developed by the Group and approved by the local (Khabarovsky region) authorities and commenced in Q1 2009. It includes:

Bore hole drilling
- a) exploration - 39,585m;
- b) technological - 4,780m;
- c) hydro geological - 2,800m;
- d) sterilisation - 500m;
Trenching - 159,600m³;
Geomagnetic surveying - 12.5km²; and
Sampling - 17,641 samples.

Garinskoye Flanks
The Garinskoye Flanks licence covers an area of 3,530km² immediately surrounding the Group's current Garinskoye licence. The Group is preparing and reviewing the exploration programme.

Titanium Sponge Plant
In order to capture additional profit margins available in the processing of ilmenite to be produced by Kuranakh, in June 2006 Aricom signed a Memorandum of Understanding with Chinalco, the largest nonferrous metal company in China and the owner of China's largest titanium metal processing plant, for the design and development of a titanium sponge production plant in China.

Titanium sponge - Highlights 2008

Creation of the Joint Venture with Chinalco
Completion of preliminary design of processing plant and equipment
Start of works at project site in Jiamusi
Tenders launched for plant and machinery

Geographical Spread

The Group's principal assets are located in the Amur Region in the Russian Far East and it has offices in London, Moscow and Blagoveschensk (Amur Region) with the head office in London. In addition the Group is active (itself or through joint ventures) in other areas of Russia including the Evreyskaya Avtonomnaya Oblast (EAO) and the Yamal, Buryatia, Magadan, Chita, Irkutsk and Sakha regions. The Group's gold operations are focussed on its Pokrovskiy and Pioneer producing mines, Malomir (a development project), and its exploration projects at the Pokrovskiy Satellite Deposits area and the Albyn, Tokur and Osipkan deposits, all of which are in the Amur Region, and the Novogodnee Monto and Petropavlovskoye deposits in the Yamal Region. Its primary iron ore assets are Kuranakh and Garinskoye in the Amur Region and the Kimkanskoye and Sutarskoye iron ore deposits (K&S) in the EAO.

Board of Directors and Key Management

Peter Hambro	Chairman
Dr. Pavel Maslovskiy	Chief Executive
Brian Egan	Chief Financial Officer
Peter Hill-Wood	Senior Non-Executive Director
Graham Birch	Non-Executive Director
Sir Malcolm Field	Non-Executive Director
General the Lord Guthrie of Craigiebank	Non-Executive Director
Sir Roderic Lyne	Non-Executive Director
Charles McVeigh	Non-Executive Director

Company Address

11, Grosvenor Place
London, United Kingdom SW1X 7HH


Telephone:	44 (0) 20 7201 8900
Facsimile:	+44 (0) 20 7201 8901
Email:	corporate[at]petropavlovsk.com
Website:	http://www.petropavlovsk.net

Additional Address/Key Contact

Investor Relations contact -
Director of External Communications
Alya Samokhvalova
Phone: +44 (0)20 7201 8900
Fax: +44 (0)20 7201 8901
E-mail: contact@peterhambro.com

Capital

Current Issued Share Capital: 182,079,767 Ordinary shares of £0.01 each

Annual General Meeting

25 June

Year End

31 December

Nominated Brokers

JPMorgan Cazenove Limited
20 Moorgate
London EC2R 6DA

Canaccord Adams Limited
Cardinal Place
7th Floor
80 Victoria Street
London SW1E 5JL

Nominated Advisors

JPMorgan Cazenove Limited
20 Moorgate
London EC2R 6DA

Major Shareholders

Shareholder	Number of shares	% of issued share capital
BlackRock Inc*	23,320,341	12.81%
Pavel Maslovskiy & Associates	16,763,657	9.21%
Peter Hambro & Associates	10,615,863	5.83%
Vanguard Precious Metals and Mining Fund	8,782,994	4.82%
JPMorgan Asset Management	8,259,509	4.54%
Lansdowne Partners Ltd	7,722,738	4.24%
Baring Asset Management Limited	7,057,059	3.88%
Standard Life Investments Limited	6,627,647	3.64%
Capital Research Management Company	6,047,130	3.32%
Legal & General Group Plc	5,917,178	3.25%

Most Recent Statement

26/08/10 - Half Yearly Report
22/06/10 - 2010 Half Year Trading Update
11/06/10 - Director/PDMR Shareholding
20/05/10 - Annual General Meeting
06/05/10 - 1st Quarter Results
22/04/10 - Annual Information Update

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