Management Board of KOSTANAI MINERALS JSC ascertains investors it follows going-concern

/KASE, February 22, 05/ - TuranAlem Securities JSC (Almaty), the underwriter and financial consultant of KOSTANAI MINERALS (Kostanai, Zhetikara, the Plant), with bonds traded under official "A" listing category list of Kazakhstan Stock Exchange (KASE), forwarded an official letter to the Management Board of the Plant asking to comment on Kostanai oblast prosecutor's claims as well as winds about the Plant heading for bankruptcy. According to TuranAlem Securities JSC in January of the current year, National information agency Kazinfrom informed the prosecutor's office of Kostanai oblast announced it would initiate a complex check of subsurface users and authorized government bodies responsible for resource using control functions. Accordign to the release of the prosecutor, a special attention will be paid to rational and safe usage of resources by enterprises, as well as environmental factors. Outward seeming this became a reason for a panic spread among investors. In his reply, Mr Zhussupouv, KOSTANAI MINERALS JSC Chairman, informs that within a period from February 7 to March 8 2005 in compliance with the task of Kostanai oblast prosecutors office, as well as with the Resolution of the prosecutor of Zhetikara region of Kostanai oblast the unplanned check for compliance with subsurface using legislation is being held. The activities of KOSTANAI MINERALS JSC and regulating bodies are subject for check. Specialists from Kostanai department for geology and subsurface using inspection under the Northern Kazakhstan territorial geology department, Zhitikara regional committee on managing land resources of Kostanai oblast territorial department for environment securing, bodies of sanitary -epidemic supervision and other regulating bodies are attracted. The letter says that the Plant provided a report on compliance with all license- related issue in 2004 without any delay to Northern Kazakhstan territorial geology and subsurface using department which also approved the plan for introducing mining work for 2005 without any notices. Besides, same regulating bodies annually inspect the activities of KOSTANAI MINERALS JSC. Within last 2 years no single violation was recorded nor fines were imposed for violation of legislation on subsurface using and environment safety", the latter says. According to the letter KOSTANAI MINERALS JSC successfully finished its manufacturing program for 2004. Over 203 th tones of fosil linen, hitting 10 year time highs. All units are functioning properly and in 2005 the Plant obliged to manufacture and market 210 th of fosil linen. In January 2005 the Plant produced 16,172 tonnes. Mr Zhussupouv also noted during the prescheduled general meeting of the Plant on January 31, 2005 shareholders decided to boost liabilities by KZT40 m and issue 400 th common shares. "Existing shareholders expressed their intentions to buy shares", the latter says. The enterprise is initiating a number of programmes aimed to promote technical upgrade, R&D ideas and ehancing the overall effectiveness and efficiency. Mr Zhusupouv does not see any reasons for any investors discomfort with respect to the business of the Plant. [2005-02-22]