FOR IMMEDIATE RELEASE

23 July 2010

KazakhGold Group Limited

KazakhGold Refunds $32 million VAT to the Republic of Kazakhstan Budget

KazakhGold Group Limited is pleased to announce that its subsidiary  AO "GMK "Kazakhaltyn" has today  voluntarily refunded VAT worth 4.667.039.475 tenge (around $32 mln) to the Republic of Kazakhstan budget. The  funds were provided by the controlling shareholder of KazakhGold Group Limited - Russia's largest gold producer "Polyus Gold".

The VAT was previously illegally refunded out of the state budget by the former management of the enterprise during 2007-2009 based on fictitious contracts. These contracts served as the basis for illegal payments  out of the Company and the Kazakhstan economy.

At present, the illegal actions of the former management of KazakhGold are subject to legal proceedings at the High Court in London.

The management of KazakhGold Group Limited previously stated their willingness to return these illegally obtained funds to the Kazakhstan budget and to invest in the Republic of Kazakhstan economy.

Enquiries:

Alexey V. Chernushkin, Director, CM and IR

Evguenia V.Buydina, IR manager

+44 (0) 208 528 1450

+44 (0) 208 528 1020

 ir@kazakhgold.com 

Anton A. Arens, PR Director

+44 (0) 208 528 1450

+44 (0) 208 528 1020

 anton.arens@kazakhgold.com