20th December 2011
Dr. Pavel Maslovskiy Becomes a Senator
Petropavlovsk PLC is proud to announce that its Chief Executive Officer, Dr. Pavel Maslovskiy, having been elected a member of the Amur Region Duma (the regional parliament of the Amur Region) on 4th December 2011, has in turn been nominated by this body to be a Senator and Member of the Federation Council of Russia (Upper House of the Russian Parliament). The Petropavlovsk Board of Directors, the managers and the employees are delighted to congratulate Senator Maslovskiy on his appointments which recognise the important role both he and the Company he created have played in the development of the Amur Region's economy over the past 18 years.
As a consequence of this appointment, Senator Maslovskiy has advised the Board that in order to take up his parliamentary responsibilities he will have to relinquish, for so long as he holds this office, his Petropavlovsk directorship and resign from his longstanding role as Chief Executive Officer. Under Russian law, Senators are prohibited from holding a business office that is remunerated or which has a management as opposed to an advisory role and there are restrictions on the ownership of business assets where conflicts of interest occur. Senator Maslovskiy will similarly retire from the board of IRC Ltd, a publicly quoted Hong Kong subsidiary company, which is developing the Group's iron ore business.
Accordingly, in order to retain the benefit of Senator Maslovskiy's knowledge and experience, the Board has conferred on him the title of Honorary President. In this capacity, which will not be remunerated, Senator Maslovskiy will be able to advise the new CEO and also attend but not vote at meetings of the Board.
Consequent upon Senator Maslovskiy's transition to the role of Honorary President, the following changes to the Management and Board of Petropavlovsk PLC will be made.
New Chief Executive
Mr. Sergey Ermolenko, aged 58, a shareholder and General Director of Management Company Petropavlovsk (the Group's main operating company in Russia) since its inception, becomes Chief Executive Officer and a member of the Board and the Executive Committee with immediate effect. Mr. Ermolenko was, with Senator Maslovskiy, Dr. Nikolai Vlasov, Mr. Valery Alekseev and Mr. Peter Hambro, one of the original five members of the Group's founding management team and has been Dr. Maslovskiy's most important operational deputy.
Mr. Ermolenko has held top managerial positions with the Group since its inception in 1994. In his previous capacity as Director of Pokrovskiy Rudnik, he was responsible for bringing the Pokrovskiy mine into production. He was appointed General Director of Management Company Petropavlovsk in 2004, and in this capacity has led the expansion of the Group into a multi-mine operator.
Mr. Ermolenko began his mining career in 1974 as an underground miner and shift boss in the Tokur mine, Amur region, working his way up to Head of Operations for the Tokur Mine. Sergey Ermolenko's role is predominantly Moscow and Blagoveshensk based and, as a limited English speaker, he will rely on his senior team and particularly Deputy CEO, Martin Smith to help with communications with investors.
New Deputy Chief Executive and Technical Director
Mr. Martin Smith, aged 56, presently the Group's Technical Director, has been associated with the Group for more than 16 years and has been appointed Deputy Chief Executive. Mr. Smith, stationed at the Group's Far East head office in Blagoveshensk, will become Deputy CEO to Sergey Ermolenko. He has been with the Group since 1994, when he joined the management team on secondment from Kier International. In 2006, he joined Aricom PLC as a Technical Director and, following Aricom's merger with the Group in 2009, Mr. Smith became Group Head of Technical Services and was appointed Technical Director in January 2011. Mr. Smith has over 30 years' experience in the global natural resources industry, commencing his career as a mining engineer at Anglo American Corporation, South Africa and later leading projects for Kier International, Costain Mining and Shell International.
Commenting on the announcement, the Chairman, Mr. Peter Hambro, said:
"It is a great honour for the Company that Pavel's achievements have been publicly recognised and we are all delighted for him personally. As his business partner of many years, I offer him my heartfelt congratulations on something that is richly deserved.
I am naturally sad that his new parliamentary role prevents him from continuing his executive tasks but we have an understanding that he will be available to me and to all the team in an advisory capacity as Honorary President. Should circumstances change in the future I hope that Pavel will consider a resumption of his executive duties with the Group.
In Sergey Ermolenko, who was one of the very earliest of Petropavlovsk's executives and my friend since 1994, we have a very capable new CEO who knows the business inside out and who is already fully up to speed with the Company's strategy and operations.
Since he was one of my earliest advisers, I am delighted that Martin Smith, who helped me with the technical issues that arose as we started to grow the Company, will be Sergey Ermolenko's Deputy CEO. I am sure that his knowledge of the Group's operations, which is derived from his position as Technical Director stationed in Russia's Far East, and his experience of extractive industries in other parts of the world will assist our shareholders in the understanding of the Group's operations.
The Group will issue its Interim Management Statement, covering, inter alia, its production for the 2011 and indications of its forecast for 2012, on 27th January 2012 as planned."
Senator Maslovskiy commented:
"As a founder of the business and its long-time CEO I will, of course, miss the day-to-day management of its operations. However, I have every confidence in Sergey Ermolenko, who has been my right hand through all these years and in Martin Smith who will be his Deputy. Though not an executive I will, of course, remain available to them to share my experience. It is my intention to retain a substantial interest in the Company through the discretionary trusts of which I am a potential beneficiary and which will continue to own Petropavlovsk shares."
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