The adjusted Budget for 2006

Friday, 14 July, 2006

The Management Board of KGHM Polska Miedź S.A. wishes to announce that on 14 July 2006, the Supervisory Board of KGHM Polska Miedź S.A. approved the adjusted Budget for 2006 and the Technical-Economic Plan for 2006-2010.

The adjusted Budget assumes the achievement in 2006 of revenues from the sale of products, goods for resale and materials of PLN 10 196 mln and net profit of

PLN 3 383 mln. This means an increase in the projected amounts as announced in the current report 6/2006 of 30 January 2006, respectively, by 26% and 84%.

The main reason for increasing the expected financial results is better copper and silver prices by 38% both projected for the year 2006.

The main assumptions to the adjusted forecast:

 1. Macroeconomic factors

  • average annual electrolytic copper prices -   5 800 USD/t,
  • average annual metallic silver prices  - 11.00 USD/troz  (354 USD/kg),
  • average annual exchange rate - 3.15 PLN/USD

2. Internal factors:

  • electrolytic copper production - 550 thousand  tonnes,
  • metallic silver production -  1 156 tonnes,
  • total unit cost of electrolytic copper production - 8 880  PLN/t,
  • expenditure for the purchase and  construction of fixed assets - PLN  858 mln

The decrease in the electrolytic copper production by 15 thousand tonnes as compared to the forecast given in the current report of 30 January 2006 results mainly from lower production of electrolytic copper from imported concentrates.

The decrease of the planned capital expenditure  in  2006 by PLN 74 mln results mainly from the change of the time-table for the  „Hydrotransport of concentrates” project and excluding from the projections spendings related to the  “Modernization of pyrometallurgy in Głogów Smelter” (except for project preparation costs).

The plan for the following years is a long term projection to be verified with subsequent annual budgets. It provides for positive financial results in the years 2007 -2010 in the amount allowing for secure operations of the Company and realisation of planned investments.

Legal basis: art. 56 sec. 5 of the Act dated 29 July 2005 on public offerings and conditions governing the introduction of financial instruments to organised trading, and on public companies (Journal of Laws Nr 184, item 1539)