SCR AND GROUP OF COMPANIES GEOPROMINING SIGNED AN AGREEMENT ON STRATEGIC COOPERATION

ARKA
Dec 1, 2009

YEREVAN, December 1. /ARKA/. South-Caucasian Railway and group of
companies GeoProMining signed an agreement on strategic cooperation
and partnership on Tuesday.

The agreement includes regulation of interrelations of parties related
to organization of transport service within the group of GeoProMining
on transportation of gold mines from Sotk subsoil to Ararat processing
plant on mutually beneficial conditions.

"We emphasize the importance of service and considered the program of
our cooperation targeted at the increase of transportation volumes",
said Shevket Shaydullin, General Director of CJSC "SCR".

"On the basis of the agreement, a working group was established
which will deal with technical issues directed at the minimization
of expenses. We expect fruitful and long-term cooperation", he said.

Investments of SCR in the frames of the agreement will be 523
million rubles in 2010-2011. Roman Khudoliy, President of the Group
of Companies GeoProMining said that the signed agreement showed that
large companies can develop mutually beneficial cooperation.

"We plan to increase the volume of gold mining and depend on the
railway and transportation. Railway company is interested in assisting
the infrastructure via transportation", said Khudoliy. The agreement
consists of general principles of interrelation of parties targeted at
the quality increase of transport service and improvement of transport
expenses of organization of transportation in agreed terms.

GeoProMining and SCR conduct negotiations for the increase of
transportation volumes from Sotk subsoil to Ararat processing plant.

It is planned that SCR will create opportunities for
Sotk-Vardenis-Hrazdan-Ararat direction for transportation of 1,5-2
million tons annually.

CJSC "South Caucasian Railway" is 100% affiliate of Open JSC "Russian
Railway". CJSC "Armenian railway" was transferred under concession
management of CJSC "SCR" according to Concession Agreement signed
on February 13, 2008. The terms of concession management is for 30
years with the right of prolongation for another 10 years.

The group of companies GeoProMining is international private company
with diversified resource base of metals established in 2001. The
production includes gold in the form of alloy "dore", as well as
copper molybdenum concentrates. The group deals with mining of metals
in the territory of Russia, Armenia and Georgi.