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Creating success in rapidly changing environment

GV Gold viewpoint on Russian gold mining industry

Roman SchetinskyDirector, Perspective development

March 2011CERBA CONFERRENCE

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Disclaimer

The information in this presentation contains forward-looking statements.

Forward-looking statements include statements regarding plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

All information regarding reserves and resources is given under the GKZ (State Reserves Committee) Code and JORC Code, CIM-compliant estimate prepared in accordance with the NI 43-101 requirements (2007).

The information and opinions contained in this presentation are provided as of March 2011 and are subject to change without notice.

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Russian Gold Mining Industry Today

The Industry has already seen its most significant developments:– The majors are known

– Consolidation is mainly over

– New capacities are already in place

Overall stability of the industry. Major Mining houses secured their long-term production plans.

TOP-5 produce about 55% of gold, the following next TOP 15 companies – another 25% (TOP-20 ~80%). Remaining 400 totally produce 20%.

Growth in gold production comes from hardrock assets. Alluvial mining will continue to decrease.

Visible step up in the past (Y2009). What trend is following, up or down?

Key Highlights Russian Gold mining breakdown

52 6279 81 86 83 85 86

110125 123

7980

80 77 73 69 62 59

5453 52131

159 158 159 152 147 145

164178 175

142

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

(т)

Hardrock Alluvial

55%

25%

20%

Leading 5:- Polyus Gold- Kinross

(Kupol)- Petropavlovsk- Polymetal- Severstal

The next TOP 15 companies

Remaining ~ 400 companies

Sources: Russian Goldminers Union, Company sources

Historical alluvial and hardrock production

Sources: Russian Goldminers Union, Company sources

(t)

44

0100200300400500600700800900

1000110012001300

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Growth Opportunities

Possibilities of organic growth are limited in Russia There are no deposits with reserves on state balance

(except probably Sukhoi Log) Exploration in new areas has almost stopped Hard to name properties in “real” pre-production

stage. Many of them are frozen with no intention to be developed

Profits from M&A deals are in favor to capital investments in new projects:

Opportunities to acquire mid-tier producers in Russia Going abroad is a new tendency. Joint ventures in

CIS countries and/or far located parts of the World Efficiency of merging with new companies could be

significantly higher than investing in developing mining projects

High gold prices secure financial stability for companies’ development programs.

Current environment creates opportunities for investments in new projects, targeting to increase overall gold production.

How long will it last? Surely not forever.

Companies try to follow two main approaches: organic growth or M&A strategies.

Cash margins are rapidly increasing

($/oz) The average price in 2010 has risen by 25% to 1224 USD/oz

Gold price

Average Cash costs

Source: Company sources

Development and growth strategies

Organic growth M&A approach

Growth in cash margins

55

300

400

500

600

700

800

900

Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13

Cash margins sharp fall

($/oz)

Source: Virtual Metals, Company sources

Challenges and Threats

Rapid cash costs increase in Russia up to the same level as in the rest of the World.

Quality of the deposits in production stage is constantly decreasing.

High grade ores depletion. Capital expenditures overrun in the most of the

new projects. Mining analysts predict gold price to step down

and reach 1200 USD\oz in 2013 and 1150 USD\oz in 2014.

We believe the 900 USD\oz scenario in a short term could be realistic.

Many projects will shut down, causing production to reduce. This will strongly reflect gold price.

World constraints Gold price forecast

Source: Apeco, Company Sources

Investing current cash margins into new projects will allow to secure companies

mid-term production plans and hardly to raise it

400

600

800

1000

1200

1400

1600

1800

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Long-term range 850 - 1050 USD/oz

Timeframe for investments

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GV Gold in Russian Goldmining Industry

8th place in Russian goldmining industry

Current production - 125 koz AU p.a. (2010)

Mineral Resource and Exploration Potential – 13.44 Moz Au

Stable position in the Industry

Balanced portfolio of assets

Corporate governance principles

Sustainable development

2 Producing assets

2 Development / Pre-production assets

7 Exploration projects

Annual and interim IFRS reporting since 2003

Audited reserves under international reserve audit classifications in place

Dividend policy implemented

Two international independent non-executive board members

Compliance with Health and Safety policies is strictly monitored

Compliance with all Russian environmental requirements

2010 Revenue – 156 mln USD (E) 2010 EBITDA – 86 mln USD (E) 2010 EBITDA Margin – 55% (E) 2010 Total Cash Costs – 479 USD/oz (E)

Strong financial performance

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GV Gold Assets Portfolio

Producing/ Expansion – Kuranakh alluvials

Development / Pre-production– Open pit mining and hard rock ore

processing at Kuranakh

Exploration– Chudnoye deposit– Further license acquisitions

Yakutia Region Producing / Expansion

– Golets Vysochaishy Development/Pre-production

– Ykanskoye– Ozherelie

Exploration– Khomolho ore fields– Ugakhan– Leprindo– Further license acquisitions

Irkutsk RegionKomi Region

MarakanLeprindo Khomolkho

Golets

KuranakhChudnoye

Production

Moscow rep office Bodaibo office

MOSCOW

Exploration and development

Bodaibo

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Golets VysochaishyGroup’s Development Loco

Key Highlights

Located in Bodaibo area, Irkutsk region. Significant growth potential with limited

development risk. Total Resources 2.8 Moz Au, inclusive P&P

reserves of 2.3 Moz Au. Two processing mills operating,

launch of the third plant with annual capacity of 3.5 mpta in August 2011.

Total processing capacity will reach 4.8 mpta in 2012.

All principal Capital Expenditures have already been acrued.

Production highlights:– 116 koz Au (2010)– 150 koz Au (2011E)– 260 koz Au (2012E)

Current resource base secures production till 2020.

Production has a real chance to boost after 2020.

The company is planning to take part in developing Sukhoi Log (located 30 km South

of Golets Vysochaishy), using current facilities to process ores from the well-known

giant deposit

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Marakan project Efficient Capital Expenditures

Ykanskoye is the next milestone in the Irkutsk project development.

Located to the West of Golets Vysochaishy. Current Resource base – 250 Koz Au,

average grade 3 g/t. In the end of 2010 a pilot processing plant

was launched with capacity of 200 ktpa. Plans to double processing capacities

up to 400 ktpa by 2015. Production plans:

– 15 koz Au (2012E)– 30 koz Au (2015E)

Ongoing intense exploration to increase current resource base.

Ykanskoye deposit Ozherelie deposit

Currently in advanced exploration stage with aggressive exploration plans for 2010 – 2013.

Mineral Resource and Exploration potential 1.2 Moz Au.

Plans to convert not less than 1 Moz Au into Reserves by 2013.

By 2015, production capacity of 100 koz Au p.a.

Plant at Ykanskoye

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KuranakhUnlocking the Value

Kuranakh is Russia’s largest placer gold deposit.

Located in the Southern part of Yakutia with well developed infrastructure.

GV gold acquired the 51% stake in Kuranakh in 2008

– Option to acquire the remaining 49% Total Resources of 5.3 Moz Au, inclusive

P&P reserves of 3.5 Moz Au.

New deep digging dredge launch in August 2011.

Expected to switch to open pit mining with a significant increase in production.

Production plans:– 20 koz Au (2011E)– 30 koz Au (2012E)

By 2015 production will reach 100 koz Au p.a.

Key highlights

Development program:

New dredges installation in 2011 and 2013

Installation of the new hardrock processing plant, with a designed annual capacity of

2.0 mtpa, launch by 2015

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Komi project – Chudnoye depositSource of Additional Future Growth

Relatively new mining region, with high prospective opportunities for greenfield projects.

A convenient geographic location in the European part of Russia with a developed infrastructure.

Ore bodies are represented with a stockwork of gold-bearing fuchsite veinlets in the faulted zone– High grades (4-9 g/t) with non-uniform

distribution Available for open-pit development

– Gold is recoverable via gravity GV Gold plans to continue intense

exploration to grow the current resource base.

Key highlights

Geological map of the licence area and schematic longitudinal geological section

Mineral Resource and Exploration Potential (JORC) – 1 Moz Au

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Asset

Ore Reserves

(000'oz)

Mineral Resources

(000'oz) Exploration Potential

(000'oz)

Total

(000'oz)Proven & Probable Measured

and Indicated

Inferred

Irkutsk Project

Golets Vysochaishy 2.3 2.9 2.9

Khomolkho Ore Field 1.2 1.2

Ugakhan 0.5 0.5

Ykanskoe Deposit 0.2 0.5 0.7

Ozherelie Deposit 0.1 1.3 1.4

Leprindo 0.04 0.4 0.44

Yakutia Project

Kuranakh 3.6 5.1 0.2 5.3

Komi Project

Chudnoe 0.4 0.6 1.0

Total Mineral Resource Base 13.44

GV Gold Mineral Resource Base

Exploration is the key building block of GV Gold’s operating strategy

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M&A Deals – Affordable Opportunities for Future Growth

All aspects of a potential project are carefully considered Ability to use Company’s know-how and previous experience is highly desirable Ability to start processing with potential for gradual production ramp-up

Priority given to high grade ores Environmentally friendly and economically effective processing technologies are preferred

Geography

Infrastructure Adequate transport links and access to power grid Availability of qualified labour force

Technical aspects and mineral reserve base

Open pit mining with low strip ratio (<10 t/t) Ore reserves of at least 0.5 Moz Au and substantial growth potential Suitability for highly efficient mining equipment

Ore processing

Economic requirements

Cash margins of at least 30% Mid-size initial capital expenditure Possibility to start production in 3-5 years

Time required to start/ complete the project

Preference given to the regions of GV Gold presence

- GV Gold has a stable gold mining business

- Development programs for current projects are clear

- Strong financial performance secures possibilities for large scale investments

- Ready for further expansion

The Projects we are looking for:

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Bodaibo Office:17, Berezovaya St.

666902, Bodaibo,Irkutsk Region,

Russian Federation

Tel/fax: + 7 (39561) 5-71-20

+7 (495) 748-13-04

Moscow Office:8/8, B. Spasoglinishevskiy Per., Office#4101000, Moscow,Russian Federation

Tel: +7 (495) 623-39-63 +7 (495) 623-38-36Fax: +7 (495) 623-44-13

www.gvgold.ru

Thank you for your attention