October 11, 2006 — Evraz Group S.A. (LSE: EVR), one of the leading vertically integrated steel production and mining businesses with operations mainly in Russia, announces that its subsidiary, Kachkanarsky Ore Mining and Processing Enterprise «Vanady» (KGOK), has today been proclaimed the winner in an auction to buy a licence to develop the Sobstvenno-Kachkanarskoye magnetite and titanium deposit in Central Ural. KGOK offered 220.5 million rubles (approximately $8.2 million) for the licence at the auction
The Sobstvenno-Kachkanarskoye deposit is located in the Sverdlovsk Region next to the Gusevogorskoye ore deposit and has reserves of 3.3 billion tonnes of ore with estimated iron content of 16%. The licence for developing the deposit is valid for a period of 25 years.
At present KGOK processes iron ore from the Gusevogorskoye ore deposit. In 2005 KGOK mined around 46 million tonnes of ore and produced 8.6 million tonnes of concentrate.
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