Project for construction of Ozernoe Mining and Processing Plant for the production of Zinc, Lead and Gold concentrates.

Republic of Buryatia, the Russian Federation

(Summary of Bankable Feasibility Study)

January, 2010

Ozernoe deposit (Zn, Pb, Au) is owned by Metropol Group of Companies (MBC Corporation). Located inBuryatia, 180 km north from Transsib railway; in the vicinity of main consumers in China. The JORC IndicatedResource totals 157 Mt of ore. The deposit is one of the best in reserves, ore quality and logistics.

The construction of Ozernoe mining and processing plant is being planned to mine no less than 6,0 mtpaof ore and to produce 740 thousand tons of Zn concentrate, 110 thousand tons of Pb concentrate and 2,5tons of ‘Dore’ alloy.By production volume Ozernoe deposit could move up to the 6th or 7th place in the rank of the worldproducers.Commissioning – year 2012, reaching production capacity – year 2013.

The first infrastructural facilities have been built and commissioned: a shift camp, a core storage facility,local roads, cellular telecom system, satellite Internet, power lines.These secure advancement of the construction of the mining and processing plant.

A Technical Project for deposit stripping has been approved. Stripping and blasting work commenced.Mine construction is ongoing, with commissioning in 2010. Tenders for the delivery of a mining equipment,complete process plant equipment and power plant have been prepared.

A Bankable Feasibility Study has been developed. An approval is received from the Ministry of Industryand one of the leading banks of Russia. The discussions with the largest banks of China, Japan and USA onthe project financing are in progress.

Project status

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Location of the Republic of Buryatia in Eurasia

Distance by rail:

Moscow - 6100 kmVladivostok (sea port) - 3400 kmChelyabinsk (customer in Russia) - 4300 kmUst-Kamenogorsk(customer in Kazakhstan) - 3300 kmBeijing(customers in China) - 2900 km

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Assets of «METROPOL» Group managed by MBC Corporation. Transport infrastructure of Buryatia.

1. Ozernoelead-zinc deposit

157 mln tons of ore (JORC)(Zn – 8,16 mln tons, Pb – 1,6 mlntons, Ag – 4,5 thous.tons)

4. Ermakovskoeberyllium deposit

1,4 mln tons of ore(Be content – 1,0%)

3. Nazarovskoegold-sulfide-zinc deposit

6 mln tons of ore(Zn – 0,5 mln tons, Au – 11 tons)

5. Talinskoebrown coal deposit

13 mln tons of coal

2.Kholodninskoelead-zinc deposit

178 mln tons of ore (JORC)(Zn – 10 mln tons, Pb – 1,42 mln tons)

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Location - 160 km north from Mogzon rail station of Transsib, 30 km from federal road Ulan-Ude - Chita, 60 km from regional center - Sosnovo-Ozerskoye settlement.

Ozernoe ore deposit is one of the world’s largest deposits

Reserves and resources,

accounted by the State balance of

Natural resources of RF:

Resources as per JORC

В+С1- 104, 96 Mt of ore

Lead - 1,31 Mt 1,25 %;

Zinc - 6,90Mt 6,57 %;

Silver - 3942 t 37,6 g/t;

С2 - 23,2 Mt of ore

Lead - 0,2 Mt 0,89 %;

Zinc - 1,14 Mt 4,89 %;

Silver - 571 t 25,5 g/t.

Resource potential

Gold - 25 t

Indicated Resource:

157 Mt of ore*

Zinc – 5,2 %

Lead – 1%

*Resource classification by

AMC Consultants (UK), 2006.

Valid till: 15 June 2024

Mining License

5

As per grade and volume, Ozernoe is comparable to the world’s largest zinc deposits

Grade and volume comparison with other similar foreign projects

Red Dog

Lanping

Shalkya

Rampura-Agucha

Century

Mount Isa

McArthur River

VazanteAngouran

Antamina

Ozernoe

0

5

10

15

20

25

30

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32

Gra

de

, %

Reserve + Resource, Mt

Project Owner

Mount Isa Xstrata

Red Dog Teck ComincoMcArthur

River Xstrata

Lanping BHP Billiton

Rampura-Agucha Hindustan Zinc

Shalkya Shalkya

Ozernoe MBC

Century OZ minerals

AntaminaXstrata/BHP/Teck Cominco

Vazante CMMAngouran Anzex Resources

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Strategic objective – construction of “Ozerny GOK” mining and processing planton the basis of polymetallic ores reserves of Ozernoe and Nazarovskoe deposits

Mining method – open pit

Operations startup – 2012

Mining rate – 6,0 mtpa of ore in total .

Annual average concentrate production:

- Zinc concentrate - 740 thousand tons

- Lead concentrate - 110 thousand tons

Annual average metal production in Dore alloy:

- Silver - 100 tons

- Gold - 1,24 tons*

* including Reserve of С2 category and Resource of Р1 category

GOK Life time – 25 years

Designed output capacity of Ozerny GOK:

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Source: Company data, broker reports 8

Planned production volumes of MBC will bring the company into line of the world’s largest zinc producers

Zinc producers (zinc in concentrate)

627578 572 561

509

390 368328

288210 191

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200

300

400

500

600

700

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Thousand tonnes / year

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Sales breakdown

Pricing scenarios Proceeds,

mln $/year*

Conservative forecast

Zn – 1350 $/t;

Pb – 1300 $/t;

Ag – 13 $/oz;

Au – 950 $/oz

600

Current prices

Zn – 2000 $/t;

Pb – 2000 $/t;

Ag – 18 $/oz;

Au – 1129 $/oz

880

Probable forecast

Zn – 2500 $/t;

Pb – 2500 $/t;

Ag – 20 $/oz;

Au – 1200 $/oz

1 211

Russia

Kazakhstan

China50%

30%

20%

9

* Zinc price is calculated as exchange metal price (Zn,Pb)exclusive of ‘treatment charge’. Nominal values (consideringmacroeconimic indexes growth rate) have been used

Main construction projects

Facility Features

Open cast mine 650 million tons of rocks to be moved

Processing plant Production rate – no less than 6 mtpa of ore

Tailings and Pyrite storage Total volume – 111 million tons

Site infrastructure Site area – 35 sq.km

Power line (linking to “Buryatenergo” – local grid)

110 kV, 25 MW

Power plant 60 MW

Automotive and rail roads 161 km

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Long-term work plan

Key stages Start time of activity

Stripping

Mine commissioning

Commencement of Processing Plant construction

Commissioning of Mining and Processing Plant

Production ramp-up to designed mining rate

III Q, 2009

III Q, 2010

I Q, 2011

I Q, 2012

III Q, 2013

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Design and TEO activities

Technical Project of Ozernoe Mining and Processing Plant construction (in Russian format)

Sibtsvetmetniiproekt

Krasnoyarsk, Russia

2010

Technical Project “Stripping and pilot mining of Ozernoe deposit”

PiterGorProject

St.Petersburg, Russia

2009

Sections of International BFS Hatch

Perth, Australia

2008

Business plan for Construction of Ozernoe power plant

SibVNIPIenergoprom

Irkutsk, Russia

2007

TEO (project) of construction of rail road Mogzon-Ozernoe

Vostsibtransproekt

Irkutsk, Russia

2007

Strategic options and business plan of MBC Corporation

Roland Berger

Moscow office, Russia

2007

Pre-Feasibility Study AMC Consultants

Maidenhead, UK

2006

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Isinga Lake

Gunda Lake

Khorga Lake

Site layout1. Open pit, processing plant2. Power line 110 kV3. Power plant 60 MW4. Road and rail to Mogzon station5. Tailings storage facility6. Pyrite storage facility7. Warehouses, auxiliary 8. Water pipe-line9. Shift camp

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*

* Work on adjusting the site layout is ongoing

Mining – open pit

Life of mine – 18 years.

A mining transportation system using dump trucks and putting wastes into outside dump is adopted

Preparation for rocks excavation is to be carried out with drilling and blasting

Total volume of material to be moved – 650 mln tons

Open pit parameters at the end of development:- in plan: 2675 х 900 m;- depth: 340 m.

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*

* Work on optimization and designing is ongoing

Process flow sheet. Processing plant. Schematic process flow diagram.

Thickening and

filtration of Pb

concentrate

Crushing

Separation Grinding

Reverse water treatment

Reagent storage

and preparation

Flotation

Reverse water

recovery and return

Lump waste to dumps

Stockpiling and

shipment of Pb

concentrate[Pb]

Tails transportation

and disposal to

tailings storage facility

Ore

Min 6 mtpa

Chemical composition:

Zn = 3,3-6,1%

Pb = 0,6-1,2%

Fe = 23-30%

S = 20-30%

Au = 0,1 g/t

Ag = 18-56 g/t

Mineral composition:

Sphalerite – 4,7-5,1%

Galenite – 0,6-0,9%

Pyrite – 25-40%

Thickening and

filtration of Zn

concentrate

Stockpiling and

shipment of Zn

concentrate[Zn]

Ore stockpile

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*Other processing options are also under consideration

*

Built infrastructure

Shift camp Core storage facility and geologists’ camp

Power line 10kV Telecom, Internet

Roads, Holoy river bridge

Core storage

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Completed work on mine construction

Forest removal is completed on an area of 85 ha.

Top soil removal and stripping was completed at the open-pit area cleared from the forest. 127 000 м3 of top soil have been removed to stockpile and of 273 000 м3 of overburden - to waste dumps.

In October this year 60 000 м3 of rocks have been blasted. 854 holes (4300 meters) drilled, 35 tons of explosives used.

Waste dumps and top soil stockpile have been set up.

On-site roads - 10 km have been built.

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Preparation for project financing - TEO Investment

Content of TEO Investment:

• General information, source of information, project

summary, project description, basic design principals.

• Information about major project participants.

• Proposed strategy for developing the deposit and a

plan of administrative and technical measures to be

completed during the project.

• Project engineering support.

• Commodity description, market review. Sales Plan,

marketing strategy.

• Cost-effectiveness analysis, capital investments,

depreciation.

• Tax proceeds.

• Cost effectiveness indicators.

* TEO Investment has passed a preliminary examination of one of the leading Russian banks, obtained a positive appraisal from Ministry of Industry and Trade of the Russian Federation, a detailed due diligence is in process.

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Required capital investments (CAPEX)*

DescriptionTotal costs,

thous. $

% from total capital

investments

Open cast mine71 202 7.47%

Processing plant332 901 34.90%

Tailings and Pyrite storage facilities29 279 3.07%

Site infrastructure112 184 11.76%

Power line (“Buryatenergo” – local grid) 18 679 1.96%

Power plant 119 367 12.52%

Automotive and rail roads270 123 28.32%

Total:953 604 100,00%

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* Work on CAPEX adjustment is ongoing

Title Units Conservative forecast Current prices Probable forecast

NPV thousand USD 545 925 2 730 593 3 032 547

Volume of investments (CAPEX)

thousand USD 953 735 953 735 953 735

DR % 10% 10% 10%

IRR % 15,97% 34,94% 36,95%

PI 3,37 8,37 9,05

DPI 1,59 3,82 4,13

PP years 6,96 5,19 5,07

DPBP years 9,30 5,87 5,07

Financial indicators *

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* Work on adjusting financial indicators is ongoing

CAPEX equals to 900 mln. $

Net Present Value dependence on Zn price variationFrom 1350 $/tonne with $500/tonne step

(defined on three different Discount Rate levels)

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Key Results Achieved in 2009

1. We have proceeded to the important stage - commencement of the deposit development and construction of mining and processing enterprise. Proper foundation has been set up for fulfillment of the license requirements, and in particular: commissioning of mine construction with a capacity of 1mtpa of ore;

2. We have set up the work for designing of mining and processing enterprise and off site infrastructure, prepared international tender procedure for complete delivery of mining equipment, processing plant and thermal power station. This will provide foundation for fulfillment of the license requirements in future and enable us to optimize expenses for the construction of mining and processing plant (GOK) with a capacity of no less than 6 mtpa of ore;

3. We have arranged the work for arranging external financing: ‘TEO Investment for Construction of Ozernoe Mining and Processing Plant’ was prepared and approved; the negations with Russian and foreign financial and industrial companies and individuals are being conducted and will be continued. The basis was created for the involvement of outside funds next year in the amount of 1 billion USD;

1. We have carried out re-organization and optimization of the company management including manpower and other operating costs. This allowed us to increase efficiency in the Corporation activity, to move on to direct management of operating company – Ozernoe Mining and Processing Plant (Ozerny GOK) to provide further resource accumulation and employ highly qualified personnel;

2. We have settled relations with Lundin Mining (their share was repurchased) and Hatch (the contract for BFS development is closed). This allowed us to independently conduct negotiations on the involvement of outside funds and holding international tender procedures.

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Primary objectives for 2010

• prepare and issue for appraisal a technical project of Ozernoe Mining and Processing plant with acapacity of no less than 6,0 mtpa of ore with a General designer JSC ‘Sibtsvetmetniiproekt’; completesite investigation work for the construction of the process plant, tailings and pyrite storage facilities,power plant, automotive and rail roads;

• comply with a principal condition of the license agreement for 2010 – commission mining enterprisewith a capacity of 1 mtpa of ore in Q2;

• attain an objective of arranging external financing for Ozernoe mining and processing plant in therequired amount, by means of sale of shares, debt or project finance, and crediting of equipmentdeliveries;

• carry out tenders and prepare proposals for delivery and construction of the main facilities ofOzernoe mining and processing plant; firstly – for the process plant, power plant, mining equipment.

• set up direct management on the part of MBC Corporation (Managing company) with respect to JSC‘Ozernoe mining and processing plant’, form the organizational structure with the required personnel,initiate the incorporation of the ‘integrated customer’ system.

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Information on upcoming Requests for ProposalMining fleet Processing plant Power plant

In stages, from 500 000 t to 8 million tons per year: Modular plant design: 4 streams at 2 mtpa throughput each (or2 streams at 4 mtpa each, or a single plant at 8 mtpathroughput), to produce concentrates containing min. 53% ofZn and min. 50% of Pb. “Turnkey” delivery.

Modular design: 2 modules 30 MW each. Fired by local brown coal. “Turnkey” delivery.

500 000 t 1 mil. t 8 mil. t

Drill rigExcavatorBulldozerLoaderDump truck

5441

16

9662

31

1510103

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DATES FOR DELIVERY / COMMISSIONING:

Stage I – III Q, 2010Stage II – IV Q, 2011Stage III – II Q, 2012

Commissioning schedule: first module (stream) - no later than 12 months from the date of pre-payment of the contract. Follow-on schedule to be offered by the supplier.

First module – II Q, 2012

Second module – II Q, 2013

FINANCING:

Pre-payment of 20-30%. Supplier’s proposal on the funding of the contract is expected.

ASSUMED TENDER DATES:

•Circulation of primary documents - December 2009• Pre-qualification - March 2010 • Selection of the tender winner - April 2010• Supply contract - May 2010

• Circulation of primary documents - December 2009• Pre-qualification - March 2010 • Selection of the tender winner - April 2010• Supply contract - June 2010

• Circulation of primary documents -December 2009• Pre-qualification - March 2010 • Selection of the tender winner - April 2010• Supply contract - June 2010

TECHNICAL CONSULTANTS:

Hatch, AMC Consultants, NBL Gold Hatch, Moscow Institute of Steel and Alloys (MISiS), NBL Gold Hatch, E4 Group

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Project management team

Mikhail Slipenchuk – Chairman of

Board of Directors of MBC Corporation, General Director of IFC “METROPOL”.

Ilya Okhtyrsky –General Director of MBC Corporation, Deputy General Director of IFC “METROPOL”.General management, project financing.

Sergey Garichev –Deputy General Director of MBC Corporation. FEED, design, TEO and BFS development, production setup, operative planning.

Dmitry Novikov –Chief Engineer of MBC Corporation. Design and engineering in Russian format, supervising site activities.

Ilgizar Fakhrutdinov –Director of Ozernoe Mining and Processing plant (Ozerny GOK)Management of activity on site.

Public Relations DirectorTatiana Rovenskaya - rovenskaya@metropol.ru

MBC Corporation

Russia, Moscow 119049, 13th Donskaya street

Tel/Fax: +7 (495) 221 71 21info@mbc-corp.comwww.mbc-corp.com

Alexander Perfiliev–Deputy Technical director of “MBC Resources”. BFS development and contracts with overseas companies.

MBC Corporation

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