Many experts expect the dollar's decline twice

Vitaly Natanovich how do you assess the state of the mining of precious metals in Russia and abroad? Gold mining in the world has been declining for the past 10 years. This is due, primarily, the gradual depletion of stocks in major producing regions - South Africa, USA and Australia. If not for production growth in China and since 2008 in Russia, the decline would have been more intense. However, in 2005-2007 in Russia was also observed decline in gold production. What has changed in the past year? The observed increase in Russian gold-mining - it is primarily the effect of start of Russia's largest deposits of the Dome of the Chukotka. I think the trend will continue in 2009. In the medium term, given the ongoing investment of major players in the construction of new production and refining capacity, I also look forward to a positive trend. While the various segments of the Russian gold will behave differently. Due to the deteriorating situation with borrowed money decrease of placer mining. Reduce production in small enterprises, built in the period of cheap money and irrational response from the various investors. At the same time will increase the volume of the big companies who have easier access to capital and adequate technical competence to organize complex projects. As a result, the balance of production in Russia in 2009 will be positive. Can I somehow replace the "go to pot" field in the main producing regions? This is a strategic task of the Russian miners, just a window of opportunity which we must maximize. In the world there are only two large region with significant prospects for a substantial increase in gold production - the Russian Federation and Sub-Saharan Africa, excluding South Africa. However, the development of production in Africa is associated with greater risks: political instability, a complete lack of infrastructure and tough deficit of skilled labor. Russia has the same, if not the best geological potential. But we have, for all its shortcomings, the investment climate is much more stable. With the infrastructure in many places difficult, but at least there is the backbone of transport routes and energy. Which greatly simplifies the task of development of deposits. Therefore, Russian companies have an excellent opportunity to increase production. In the five-year term, our goal should be at least second position in gold producer in the world. A first position will remain for China? Despite the fact that China came in first place, he has a bad security resource base, many small fields. Therefore, if the Chinese have not yet reached peak production, it will happen in the next two to three years. Moreover, peak rates will be slightly above current levels. To what extent does the global financial crisis has affected the extraction of precious metals? The main problem was the complexity of the financing. In particular, this affected the development and exploration projects on the horizon of 3-5 years will lead to further depletion of the finished resource base. That is, the lack of investment in exploration and early stage development projects are translated into a lack of objects that are ready to launch. And because the existing fields in nature have a declining production profile, it would reduce production in the world and, consequently, improve the pricing of metals. In this case felt "Polymetal"? Short-term effect was a sharp drop in share price - investors left with mass markets in developing countries, including those from Russia. But the paper "Polymetal" its pre-crisis value is restored and even exceeded. Crisis is upon us as a whole had a positive impact. Because one of its consequence - the possibility of acquiring assets that became available after their owners fell into some financial difficulties or have decided that to develop non-core business does not make sense. We acquired the deposit Goltsovoye, Quartz Hill of the May and in Russia, as well as Varvarinskoye in Kazakhstan. And what about the mining of silver, platinum and palladium? Platinum and palladium are not fully investment metals - the lion's share of their consumption is on the industry, primarily automotive industry, where they are used as catalysts. That is why the platinum group metals relatively undervalued? Absolutely. If you look at the so-called gold-platinum ratio, ie the ratio of prices of these metals, many years, it has traditionally been a 0.5, that is half the price of gold, platinum. After the crisis began, everything changed - in December of 2008, there was even a couple of days when gold was worth more. Despite the fact that platinum is then bounced off the bottom, it is still the gold is now trading 0,75-0,8 instead of 0,5. That is much undervalued, and how this situation will last, depends on the pace of recovery in demand for cars. In Russia, demand falls, the world market - too. So in the short term, no good with either platinum or palladium with will not occur. And with the silver? Silver - an interesting metal. If gold investment demand, including jewelry industry, accounts for 90% of world production, while the platinum group - 20-25%, while the silver ratio of 50 to 50, it is somewhere in the middle. Besides the market of this metal is much less liquid, than the gold market - in terms of money trading volumes two orders of magnitude smaller. Historically, silver has been very closely correlated with the gold. And during the crisis, this correlation is survived, but with one important caveat - the volatility of the value of silver is always a lot more. So when gold went down - silver collapsed. When gold went back up, silver in terms of growth it is much "jumped." I believe that in the medium term, any movement in the price of gold will be a multiplier reflected in the value of silver. Silver's not facing the decline in production due to exhaustion of deposits ... Reserves of silver, very much. About 60% is produced as a byproduct in the manufacture of non-ferrous metals - zinc, copper and lead. Accordingly, paradoxically, the deepening financial crisis for the silver is positive in terms of the proposal. On the one hand, demand is reduced, but on the other - decreases the production of zinc and copper, and hence the silver. Therefore, despite the fact that reserves of silver seems to be a lot, I would not have predicted the growth of production. Simply because, at least in China and Australia, many businesses are closed - some temporarily, others permanently. Most likely, in 2009 we will have to wait for a slight decrease in silver production, and in the medium term it will be very tightly correlated with changes in the production of zinc and to a lesser extent - of copper. The extent to which investments in precious metals are able to protect private investors and businesses from the depreciation of capital? Investments in precious metals to protect investors against the risk of global inflation and the devaluation of the world's currencies. Many experts expect the dollar's decline by half. Not the fact that it happens, but such a scenario is possible. In this case, we would like to focus investor attention on the fact that real protection against devaluation of savings is a physical possession of the metals. "Metal" bank accounts, I personally investments in precious metals not think so. It is possible that the explosive increase in gold prices, the bank where you opened metallschet will not be able to give you gold - simply can not buy it, so as not to be desired amount. In addition to these accounts are not subject to the safeguards of the state. So I definitely recommend it to everybody to keep a portion of their capital in the form of ingots or coins. During the year the value of shares of Polymetal on the RTS and MICEX stock exchanges has increased in price by almost 35%. In this case, the price of securities of other Russian public companies that produce precious metals fell. Why did it happen? On the world market, many players also showed very substantial growth of prices for comparison with the pre-crisis level. Look at Kinross Gold, on the Rand Gold, on the Eldorado. Paper some of them grew up during the year twice. Therefore, Polymetal is unique among Russian companies, but nothing stands out from the world's miners. What are the strengths and weaknesses are in Polymetal? I would point out the weak liquidity of our shares. This is a serious problem on which we work - actively meet with investors, we plan to increase free-float of the company. Disadvantages also include the structure of debt - we have $ 300 million in debt and they are all short. As for strengths, then "Polymetal" of all Russian players, the strongest pipeline, ie, "growth tube" - a set of assets that would soon begin to enter into a stage production. Are under construction and commissioning of the project, which will work for many years, consistently and continuously to generate cash flow. The second advantage - the most extensive experience among the Russian players on the design, construction and commissioning of production facilities: we developed about ten fields. Another competitive advantage of our company - the level of corporate governance, which I think is the best compared to its competitors. What are the opportunities for business growth are on the market today? The main growth opportunity for us - the implementation of already announced plans. That is, build a new facility at the field Albazino, restoration of production at the Kubaka gold recovery plant, involving the testing of fields and hills Birkachan Quartz, building on a recently acquired The May field. Is nearing completion of an increase in capacity at Dukat. In addition, we continue to closely monitor the possible purchase of new assets. I am confident that it will be 6-9 months, people are finally coming to himself, will finance long-term investments and no longer cheap to buy. What is special about risk management in your industry? Is fundamental geological risk. Therefore, the most important - is the ability to critically evaluate the resource base of existing and new fields. Without proper examination of everything else becomes meaningless. This is probably the key skill. And in our company, this control is the most important - on the basis of operational data for use and additional drilling, we annually re-evaluate the resource and reserve base. The risk of construction also greatly affects the business of mining companies, because the quality and relevance of the design decisions for a particular field - is a huge source of uncertainty. We have our own Research and Development Center, and the risks of making wrong decisions and managed very effectively with specialists, which will further exploit the mine. As for the more traditional risks and costs for gold or silver - I think this should just live. This is how the presence of harmful substances in the air. Impractical, and perhaps even unwise to attempt such macroeconomic risks to manage. Much more efficient and more useful to concentrate on internal problems that are specific to the company. How much will it cost a major precious metals by the end of 2009? Gold and silver will trade fairly close to current levels: 950 $ / XAU and 15 $ / XAG. These are average values ??without volatility. Platinum and palladium will fall to 1100 $ / XPT and 210 $ / XPD. I have the intuitive feeling that the acute phase and the bottom of the crisis behind us, but the recovery will go slower than expectations, which are now reflected in the prices of commodities. Demand for cars will recover very slowly. Therefore, platinum and palladium will long be underestimated. I believe that the scenario of global inflation will sooner or later materialize. But while the effect is not visible, and therefore the gold and silver outlook neutral. This inflationary effect on distant 1,5-2 years. The sharp rise in gold and silver may occur in about 2011.