Amur Region
A small portion of the Omchak Joint Venture's production in 2006 came from new assets located in the Amur Region and acquired only in the middle of 2005: OOO Zeyazoloto and OOO Noviye Tekhnologii.  Direct alluvial gold extraction has taken place on three deposits with total gold recovered of 3,745 oz.  Geological exploration work during the year covered three licence areas, with 1,309m of drilling to confirm and increase reserves. 

Chita Region
Omchak holds exploration licences for three deposits in the Chita Region: Verkhne-Aliinskiy, Bukhtinskiy and Kuliinskiy.  Geological exploration work was started on the Verkhne-Aliinskiy area in October 2006 with 4,700m of core drilling.  Gold grades of up to 166 g/t and silver up to 209 g/t have been found in ore intersections in 49 drill holes. 
On both the Bukhtinskiy and Kuliinskiy areas, initial project documentation has been prepared, and baseline environmental studies have been completed. 

Verkhne-Alliinskiy
The Verkhne-Allinskiy gold property is the combined exploration and mining licence with estimated gold reserves and resources of 669,000oz and silver reserves and resources of 890,000oz.  Geological exploration work was started on the Verkhne-Aliinskiy area in October 2006 with 4,700m of core drilling.  Gold grades of up to 166 g/t and silver up to 209 g/t have been found in ore intersections in 49 drill holes. 
The deposit is located 30km east of the town of Baley in the Chita Oblast with which it is connected by road.  The nearest railroad station is located c.50km from the deposit.  The licence area covers 15.6km² with mining contemplated to a maximum depth of 450m.  The deposit was discovered in 1980 and preliminary exploration was carried out in 1984-5.  The deposit comprises of steeply dipping quartz-sulphide veins and mineralised zones. Three principal zones of potential economic interest have been explored by trenching and drilling holes to a depth of 400m.  Underground exploration, by audits and crosscuts, has been carried out on two of the zones.  Gold grades at the deposit vary from 0.8 to 332 g/t.  The ore zones open at depth.  According to laboratory testing a recovery rate of 95.9% gold and 91.4% silver is expected.  Exploration works carried out in 2006 resulted in 51 core holes with an overall volume of 4,745.5m drilled at the deposit.  500 core samples were taken and analysed.  As a result of these works, the Zhila 2 ore body was identified and followed to a depth of 150m.  The established intersections of the ore body have the following parameters: 0.4m with 12.6g/t of gold, horizontal thickness - 0.4m containing 8.6g/t of gold, horizontal thickness - 0.7m containing 9.5g/t. 

Kuliinskiy and Bukhtinskiy
Acquired in 2005, these gold properties are hard rock deposits, suitable for open pit and underground development, and are accessible by existing roads and nearby major railways.  Gold mineralisation at the Kuliinskiy ore field was established in 1966-67 and has since been studied at depth.  An appraisal of both sites will be conducted in 2006 with further geological and geophysical research commencing in 2007, resulting in an eventual re-estimation of reserves and resources.
One of the three ore occurrences at the Kuliinskiy ore field is estimated to contain gold reserves of c.11,285 oz at 6.2 g/t in Russian category C2, P1 resources of c.1.125 million oz at 12g/t and P2 resources of c.0.965 million oz at 10g/t.  Geological exploration is scheduled to commence in July 2007 at the Kuliinskiy ore field and mining by the end of the year.  It is planned to carry out 15,000m³ of trenching and collect more than 200 drill samples. 
For the Bukhtinskiy ore field, P2 resources estimated to a depth of 100m at 0.804 million oz with average grades of 10g/t.  At the flanks of the Bukhtinskiy prospective area, aerial geophysical exploration is being carried out as well as a geochemical survey.  Ore samples and mineralogical samples are being analysed. 

Republic of Sakha (Yakutia)
In 2005 ZAO Omchak obtained the licence through a 100% subsidiary OOO "Uduma" in the Republic of Sakha (Yakutia) for the production of gold from a shallow alluvial deposit.  The depth of the gold bearing layer is 1.0-6.0m and the gold grade of the sands ranges between 0.5-1.5 g/m³.  In July 2006 pilot-scale alluvial gold extraction at one washing plant was started.  By the end of the season 38,300m³ of gold bearing sands had been washed and enriched and 1,170 oz of gold extracted.  100,000m³ of trenching is planned for 2007 for further conversion of resources into mineable reserves.