Mineral Reserves and Resources Statement

Data for Norilsk Nickel’s mineral resources and ore reserves as of December 31, 2007, are based on the results of an independent technical audit performed by Micon International Co Ltd (Micon) between March and October 2008. The audit was conducted in accordance with the principles of the Joint Ore Reserves Committee (JORC) Code of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia, at all of the deposits on the Taimyr and Kola peninsulas as well as in Australia, Botswana and South Africa.

Russia

The technical audit of Norilsk Nickel’s Russian entities is based on the operating results for 2007. Micon audited the reserves and resources of all ore types at the Group’s deposits on the Taimyr (Polar Division) and Kola (Kola MMC) peninsulas.

The proved and probable reserves of the Taimyr and Kola Peninsulas contain ca. 5.8 million tonnes of nickel, ca. 8.7 million tonnes of copper and more than 80 million ounces of platinum group metals (PGMs). In addition the measured and indicated mineral resources contain more than 10 million tonnes of nickel, more than 16 million tonnes of copper, and around 190 million ounces of PGMs.

Approximately 280,500 tonnes of nickel and 492,000 tonnes of copper in ore were mined at the Taimyr peninsula deposits in 2008, while underground exploration work increased the proved and probable reserves by 270,200 tonnes of nickel and by 334334334,200 tonnes of copper. Approximately 70% of this increase came from advance exploration work at the Severny-2 rich-ore field of the Oktyabrsky deposit.

Deposits on the Taimyr Peninsula (Norilsk-1, aTalnakh and Oktyabrsky) offer a vast potential and should help to maintain reserves at the required level through exploration efforts at both the current operations and the unexploited deposits. The reserves of rich and cuprous ore from current mines will be replaced mainly with inferred resources on the flanks until rich-ore fields and disseminated-ore horizons are brought online. The work to open new rich-ore fields at Talnakh will substantially increase the quantity and quality of the indicated balanced reserves in the near future.

As for the Kola Peninsula, the main objective is to conduct a detailed exploration of the deep horizons at the existing Zhdanovskoe deposit, audit its reserves using the new industry approach, and develop it as part of the Severny-Gluboky deposit. At the beginning of 2008, after mining, exploring and re-evaluating the resources at Zhdanovskoe, Micon confirmed the proved and probable reserves at 106.8 million tonnes. All of the ore is concentrated in a well-developed block, with a cut-off grade of 0.5% of nickel and located at a depth of up to 44440 meters.

The only changes to the reserves in 2008 at the existing deposits on the Kola Peninsula were due to mining and operating losses. The proved and probable reserves decreased by 50,800 tonnes of nickel and 21,800 tonnes of copper.

The reserve deposits at the Pechengsk ore field contain ca. 148.1 million tonnes of nickel resources. Final exploration activities and operations will be launched there as soon as this becomes economically viable.

When copper and nickel ore are added up, the Kola Peninsula deposits have approximately 500 million tonnes of measured and indicated resources and more than 220 million tonnes of inferred resources. This will enable Kola MMC to sustain output over the medium term. If deemed necessary, the current exploration activities will be carried out on a permanent basis.


Minerals resources and ore reserves of Taimyr and Kola peninsula as of December 31, 2007


Region / Category Ore type Ore Tonnage
000't
Metal Grade Contained Metal
Ni
%
Cu
%
Pd
g/t
Pt
g/t
Au
g/t
6PGM
g/t
Ni
000't
Cu
000't
Pd
Pt
Au
6PGM
000' ounces

Taimyr Peninsula

Proved ore reserves
Talnakh ore field
Rich
44,626
2.86
3.98
7.04
1.49
0.23
8.99
1,276
1,775
10,104
2,133
328
12,898
Cuprous
22,133
1.13
4.58
10.80
2.57
0.66
13.52
251
1,014
7,687
1,829
471
7,374
Disseminated
29,576
0.49
0.89
3.97
1.45
0.25
5.63
144
263
3,772
1,383
237
5,354
Total Talnakh ore field - combined ore types
96,335
1.73
3.17
6.96
1.73
0.33
9.01
1,671
3,052
21,563
5,346
1 036
27,876
Norilsk-1 deposit (Disseminated ore)
39,622
0.34
0.49
4.27
1.75
0.19
6.30
137
196
5,439
2,232
240
8,031
Probable ore reserves
Talnakh ore field
Rich
96,304
2.60
2.89
5.07
1.00
0.16
6.58
2,506
2,781
15,694
3,088
498
20,347
Cuprous
62,163
0.81
3.52
7.50
1.94
0.60
9.65
506
2,190
14,983
3,876
1,190
19,287
Disseminated
1,926
0.41
0.66
2.25
0.68
0.21
3.13
8
13
139
42
13
194
Total Talnakh ore field - combined ore types
160,393
1.88
3.11
5.98
1.36
0.33
7.72
3,020
4,984
30,816
7,006
1,701
39,828
Norilsk-1 deposit (Disseminated ore)
23,598
0.28
0.37
4.32
1.78
0.19
6.42
66
86
3,279
1,349
147
4,875
Total proved and probable ore reserves
319,948
1.53
2.60
5.94
1.55
0.30
7.84
4,892
8,318
61,098
15,932
3,124
80,610
Measured and indicated mineral resources
Talnakh ore field
Rich
20,470
4.23
5.83
12.95
2.54
0.51
15.90
866
1,194
8,524
1,673
336
10,469
Cuprous
351
0.71
1.94
4.46
1.21
0.34
6.12
3
7
50
14
4
69
Disseminated
1,367,103
0.52
1.03
2.89
0.84
0.19
3.91
7 064
14,146
127,118
36,738
8,239
171,572
Total Talnakh ore field - combined ore types
1,387,924
0.57
1.11
3.04
0.86
0.19
4.08
7 933
15,347
135,692
38,429
8,579
182,110
Norilsk-1 deposit (Disseminated ore)
25,525
0.33
0.45
4.21
1.66
0.15
6.26
85
115
3,452
1,359
127
5,132
Total measured and indicated mineral resources
1,413,449
0.57
1.09
3.06
0.88
0.19
4.12
8 018
15,462
139,144
39,783
8,705
187,243
Total inferred mineral resources
471,845
0.90
1.85
4.44
1.13
0.26
5.81
4 232
8,737
67,344
17,199
4,019
88,148

Region / Category Ore type Ore Tonnage
000't
Metal Grade Contained Metal
Ni
%
Cu
%
Pd
g/t
Pt
g/t
Au
g/t
6PGM
g/t
Ni
000't
Cu
000't
Pd
Pt
Au
6PGM
000' ounces

Kola Peninsula (Disseminated ore)

Proved ore reserves (Operating mines)
68,923
0.66
0.31
0.04
0.03
0.01
0.07
458
213
78
57
23
145
Probable ore reserves (Operating mines)
59,378
0.75
0.36
0.04
0.03
0.01
0.09
446
215
75
68
25
156
Total proved and probable ore reserves
128,301
0.70
0.33
0.04
0.03
0.01
0.07
904
428
153
125
48
301
Measured and indicated mineral resources
Operating mines
348,988
0.50
0.21
0.04
0.02
0.01
0.06
1,730
729
431
208
77
655
Undeveloped deposits
148,094
0.59
0.30
0.05
0.03
0.02
0.09
877
445
215
136
92
387
Total measured and indicated mineral resources
497,082
0.52
0.24
0.04
0.02
0.01
0.06
2,607
1,174
646
344
169
1,042
Total inferred mineral resources
220,648
   0.51
   0.24
   0.04
   0.02
   0.01
   0.06
 1,134
   522
   283
   159
    74
   461


Notes:
(1) The mineral resources and ore reserves of the deposits of the Taimyr and Kola peninsulas were classified according to the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), developed by the Australasian Joint Ore Reserves Committee (JORC), created by the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia.
(2) The reserves were classified in accordance with the JORC principles by the following competent person: Stanley C Bartlett, PGeo, Managing Director of Micon International Co Limited.
(3) The reserves are based on the current detailed mine production plan for 2007-20 and the base-case conceptual mine plan covering the life of a mine. The life of a mine is based on economically mineable ore in the A, B and C1 Russian categories at the end of a given calendar year.
(4) Subtotal and total figures may differ to the sum of individual numbers due to rounding. Certain values may in some instances vary slightly from previously published values.
(5) The six PGMs are platinum, palladium, rhodium, ruthenium, osmium and iridium. Hereafter in the annual report the troy ounces used as a weight measure for PGM.
(6) Proved and probable ore reserves are not included in mineral resources.
(7) Ore losses applied ranged from 1.6% to 20% and dilution from 6% to 15%. Mining dilution was assumed to have a nil grade.



Stillwater Mining  


Data on the ore reserves of Stillwater Mining Company as of December 31, 2008, is provided in accordance with Industry Guide No. 7, as approved by the US Securities and Exchange Commission.

The ore reserves of Stillwater Mining Company are located in the J-M Reef deposit in the Beartooth Mountain Range in the central and southern areas of the US state of Montana.

As of December 31, 2008, Stillwater Mining Company’s proved reserves totaled approximately 4.98 million tons of ore, with average palladium and platinum contents of 0.5757 ounces per ton1, giving a total of 2.83 million ounces of palladium and platinum . The tonnage of proved ore reserves increased by 3.7% compared to prior year.

Meanwhile, the probable reserves totaled approximately 3333.2 million tons1 of ore, with average palladium and platinum contents of 0.5353 ounces per ton1, giving a total of 17.6363 million ounces of palladium and platinum. The tonnage of probable reserves was down 5.6767% compared with prior year.

Stillwater Mining Company’s proved and probable ore reserves changed compared to prior year due to the following reasons:

  • an increase in proved ore reserves following the exploration drilling;
  • a decrease in proved ore reserves due to mining;
  • a decrease in probable ore reserves due to a partial reclassification to the proved ore reserves category;
  • an increase in ore reserves due to the exploration of the resource base; and
  • a change in volume of ore reserves due to an adjustment of reserve estimates and amendments to the mining plan.

 

Ore reserves of the J-M Reef deposit (Montana) as of December 31, 2008

 
Ore
Volume
(‘000 tons)
Metal grade
(Pd+Pt)
(oz/ton)
Metal content
(Pd+Pt)
(‘000 oz)
Stillwater mine      
Proved reserves
2,911
0.65
1,898
Probable reserves
14,030
0.64
8,911
Total for Stillwater mine
16,941
0.64
10,809
East Boulder mine
Proved reserves
2,066
0.45
935
Probable reserves
19,202
0.45
8,717
Total for East Boulder mine
21,268
0.45
9,652
Total for Stillwater Mining Company
Proved reserves
4,977
0.57
2,833
Probable reserves
33,232
0.53
17,628
Total proved and probable reserves
38,232
0.54
20,461 (5)


Notes:
(1) Ton (or short ton) is the weight measure used in US reporting. It equals 907.18 kg.
(2)Expressed as palladium plus platinum in-situ ounces at a ratio of around 3.5555 parts Pd to 1 part Pt.
(3) In calculating ore reserves, Stillwater Mining Company has used the trailing 12-quarter combined average PGM market price of US$566566566.91 per ounce, which consists of US$34342.21 per ounce for palladium and US$1,34340.93 per ounce for platinum.
(4) Subtotal and total figures may differ to the sum of individual numbers due to rounding. Certain values may in some instances vary slightly from previously published values.
(5) Average mining and processing losses of around 17.3% must be deducted to arrive at the estimated recoverable ounces.
(6) Ore and metal reserves figures are in accordance with the results of the reserve audit performed by Behre Dolbear & Company Inc. on December 31, 2008.


NORILSK NICKEL INTERNATIONAL

In 2008, Micon conducted an audit of the Group’s overseas assets in South Africa and Western Australia.

 

Minerals resources and ore reserves of NN international as of December 31, 2007

Region / Category
Ore tonnage
Metal Grade
Contained Metal
000’t
Ni
Cu
%
6 PGM
g/t
Ni
000’t 
Cu
000’t
6 PGM
000’ ounces
Australia
Lake Johnston
Proved and probable ore reserves
4,000
1.26
50
Measured and indicated mineral resources
6,228
1.65
133
Inferred mineral resources
2,665
1.64
44
Black  Swan
Measured and indicated mineral resources
5,971
0.72
43
Silver    Swan
Measured and indicated mineral resources
86
10.9
9
Cawse
Proved and probable ore reserves
8,834
0.79
69
Measured and indicated mineral resources
44,825
0.71
320
Mineralised stockpile
3,788
0.67
25
Waterloo
Proved and probable ore reserves
99
2.93
3
Measured and indicated mineral resources
57.5
4.58
3
Mineralised stockpile
753.9
1.39
11
Honeymoon  Well
Proved and probable ore reserves
124,400
0.65
809
Measured and indicated mineral resources
49,100
0.76
373
Inferred mineral resources
11,900
0.68
81
Áîòñâàíà
Selkirk
Measured and indicated mineral resources
124,000
0.23
0.27
0.57
285
335
Phoenix
Probable ore reserves
95,200
0.28
0.21
267
200
2,272
Measured and indicated mineral resources
98,000
0.28
0.21
274
206
Inferred mineral resources
2,500
0.28
0.23
7
6
ÞÀÐ
Nkomati 
Proved and probable ore reserves
166,809
0.33
0.12
0.83
551
201
4,405
Measured and indicated mineral resources
234,343
0.38
0.15
0.93
890
352
7,007

 

Definition of mineral resources and ore reserves as per the JORC Code

A “Mineral Resource” is a concentration or an occurrence of material of intrinsic economic interest, in or on the earth’s crust in such form, quality and quantity that there are reasonable prospects for its eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided in order of increasing geological confidence into Inferred, Indicated and Measured categories.

An “Inferred Mineral Resource” is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has an assumed, but not verified, geological and/or grade continuity. It is based on information, gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, which is limited or of uncertain quality and reliability.

In geological terms, this mainly corresponds to the C2 category of the Russian classification system.

An “Indicated Mineral Resource” is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

In geological terms, this mainly corresponds to the C1 category of the Russian classification system.

A “Measured Mineral Resource” is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and/or grade continuity.

In geological terms, this mainly corresponds to the A+B categories of the Russian classification system.

An “Ore Reserve” is the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are subdivided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.

A “Probable Ore Reserve” is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

In geological terms, this mainly corresponds to the C1 category of the Russian classification system.

A “Proved Ore Reserve” is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

In geological terms, this mainly corresponds to the A+B categories of the Russian classification system.


Hydrocarbons reserves

Norilsk Nickel currently extracts hydrocarbons (natural gas and gas condensate) at the Pelyatka deposit, owned by a subsidiary of the Company – Taimyrgaz. In addition, OJSC Norislgazprom, an associated company of the Group, exctracts the hydrocarbons on three other deposits:

  • Severo-Soleninskoye;
  • Yuzhno-Soleninskoye; and
  • Messoyakhskoye.

The gas produced is sold to Norilskenergo, a branch of Norilsk Nickel, as a raw material for heat and power generation and for the Company’s production needs.

The Pelyatka deposit is the largest of all gas condensate deposits that Norilsk Nickel is currently developing. The construction and improvement of deposit facilities is currently underway, which includes more than 200 complex technological facilities at various stages in the production chain, from gas and gas condensate extraction to its preparation for shipment to customers. The development occupies more than 22 hectares of land and has more than 180 kilometers of gas and gas product pipelines.

The following activities were performed in 2008 at the Pelyatka deposit:

  • the gas condensate reserves were re-evaluated;
  • the Rosnedra (“State Reserves Committee”) commission approved the technical plan for developing the Pelyatka gas condensate deposit;
  • two exploration wells were drilled; and
  • geophysical exploration and blasting was carried out at two wells;
  • repairs were carried out at three wells;
  • seismic exploration was conducted at than 195 kilometers.

The following activities are planned to be performed in 2009 at the Pelyatka gas condensate deposit:

  • repairs of ten wells; and
  • in-depth appraisal work to determine the characteristics of gas condensate fields at Pelyatka.

The total production volume by Taimyrgaz in 2008 was 1,14646 million cubic meters of natural gas and 49,000 tonnes of gas condensate.


Gas and Gas condensate reserves as of December 31, 2008

Deposit Reserves (À+Â+Ñ1)
Gas
(bln m)
Condensate
(‘000 tonnes)
Ethane
(‘000 tonnes)
Propane
(‘000 tonnes)
Butane
(‘000 tonnes)
Pelyatka 
239 
12,431 
12,177 
7,690 
4,723


Gas and Gas condensate production

Volume
2008
2007
2006
Natural gas (million m3)
1,146 
898 
664 
Gas condensate (‘000 tonnes)
49
35
32