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Export Development Canada: 

Export Development Canada Russian Mining and Metals: March 2004

Slide2: 

Russian Market Assessment Russia is a market of growing importance for EDC Russia's progress in transforming its economy to an open market system makes it increasingly attractive to Canadian suppliers and investors, especially in light of Russia's natural synergies with Canada. Given its G-8 status, its improved economic fundamentals and its long-term trade potential, Russia is one of DFAIT's priority markets. Russia is now rated just below investment grade by Standard & Poor's and at investment grade by Moody’s. Reform progress has been made on protection of shareholders' rights, tax code, labour code, business deregulation, and land code.

Slide3: 

EDC Strategy: Russia Mining & Metals Awakening the Giant EDC recognises that Russia is a changing market - it is clearly not the same as it was 5 years ago EDC is currently engaging Russian mining and metals majors on a broad scale EDC also recognises that mid-tier Russian companies represent an important, growing segment of the market Reaching this market segment will require risk sharing with financial partners “on the ground” in Russia

Slide4: 

New Rules of the Game Russian mining and metals majors have a new paradigm: Moving towards better corporate governance and transparency to gain easier access to international capital markets No longer focused solely on asset acquisition – now increasingly focused on production efficiency EDC’s “take” on the Russian mining and metals sector Relationships and local presence are key to your success in Russia There is a huge potential for sales in the market Competition: Everyone is trying to sell equipment in Russia You need to sell everything: service, relationships and products EDC Strategy: Russia Mining & Metals

Slide5: 

Candidates for Direct EDC Financing EDC views the mining and metals industry as a whole in Russia and hopes to do significant business with major, creditworthy players EDC is re-engaging Russian companies to determine their appetite for financial facilities covering a wide-range of Canadian procurement, both present and future Individual Russian companies with which EDC is developing relationships include: EDC Strategy: Russia Mining & Metals

Slide6: 

Partnering with other lenders and financing intermediaries EDC is looking towards new solutions such as capital leasing New structures in conjunction with other financial institutions are designed to mitigate risks to Canadian exporters and investors dealing with Russian companies Potential EDC financial partners in Russia include: EDC Strategy: Russia Mining & Metals

Slide7: 

Mobilising EDC finance in Russia What does EDC need from Canadian exporters and investors? EDC needs Canadian companies to engage us, and to make us aware of your plans in Russia To build a credible “Canadian Benefits Case” EDC needs to know what you are doing in Russia, what you have done, and what are your corporate objectives Register your intent with us so we can go back to Russian counterparties with this knowledge Next steps … EDC wants to “raise the bar” of its game in the Russian mining and metals sector by developing new opportunities for direct and indirect financing, leasing, limited-recourse project financing and political risk insurance to project lenders and sponsors

Slide8: 

EDC’s Team – Russia Mining & Metals Ottawa Headquarters: Medium and Long-Term Financial Services Mining Team: Ms Leslie Kenway, Mr Jim McIntyre, Mr Paul Hemsing Political Risk Insurance: Mr Norm Kimber Project Finance: Mr Doug Macaulay Ottawa Headquarters: International Markets Russian Federation and Central Asia: Mr John Kur Regional Offices Across Canada

Slide9: 

EDC Mining Team Considerable commodity knowledge and expertise with gold and silver, copper and zinc, nickel, aluminum and diamonds Products Offered Priority Markets

EDC Business Volume (1996-2002): 

EDC Business Volume (1996-2002) Canadian Dollars (Billions)

2002 Business Volume by Region: 

2002 Business Volume by Region

EDC Mining Strategy - Russia: 

EDC Mining Strategy - Russia Bonding Bid Bonding Advance Payment Bonding Performance/Warranty Bonding Contract Insurance Contract cancellation insurance Specific transaction insurance (non-payment) Political Risk Insurance (PRI) Mitigates expropriation, currency transfer & inconvertibility, political violence risk Corporate / Project Finance Financing to international buyers Flexible credit structures (term loans, lines of credits) Long-term view

Selected EDC Mining TransactionsCorporate & Project Finance: 

Selected EDC Mining Transactions Corporate & Project Finance CANADA Potash Corp USD 50.0 million Participant Revolving Term Facility CANADA Cameco Corp CDN 40.0 million Senior Lender Revolving Term Facility MEXICO Grupo Mexico USD 40.0 million Lender Revolving Line of Credit RUSSIA Alrosa Co. Ltd. USD15.0 million Lender Line of Credit CANADA Diavik Lead Arranger USD 38,000,000 KYRGYZ REPUBLIC Kumtor Co-Arranger ECA USD 50.0 million PRI Equity Arranger TANZANIA Bulyanhulu Lead PRI Insurer & Arranger USD 100.0 million PERU Antamina ECA Arranger USD 135.0 million PRI Co-Lead Arranger USD 335.0 million

Slide14: 

ALROSA Line of Credit Facility USD 15.0 million Signed December 2003 Supports Canadian Exports Application Process is Seamless for Exporters Contact Paul Hemsing at 613-597-8659 or email phemsing@edc.ca

Export Development Canada: 

Export Development Canada Russian Mining and Metals: March 2004