Ann: Activities Update , page-2

Extract from Polymetals (ASX: PLY) ASX Quarterly Report dated 25 January 2012

“During the Quarter the Drew Hill Exploration Joint Venture participants entered into separate farm-in agreements with each of Olary Iron Limited (OIL) and Havilah Resources (ASX: HAV) (Other Parties) for the exploration of iron ore within exploration tenements EL 4199, EL 4533 and EL 4200. Under the terms of the agreements, both OIL and HAV must meet minimum expenditure requirements at which time they may elect to designate an area of interest on the tenements within which to explore further (the Project Area).

Further expenditure commitments will earn an entitlement to lodge a mineral claim over any iron ore Resource identified within the Project Area with any such mineral claim application to be in the names of the exploration company (OIL or HAV) and the Polymetals/Exco Joint Venture.

The Other Parties will continue to sole fund all expenditure on their projects until such time as a mining lease is granted to them pursuant to a mineral claim lodged. The entitlements to lodge a mineral claim expire on 30 November 2018.

The agreements are restricted to mineral rights for iron ore, a commodity which is not Polymetals’ strategic focus but may present value to the Company should the Other Parties’ exploration program be successful. Additionally, the Company benefits from reduced tenement expenditure commitments which will be attended to by the Other Parties.”

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