Combination of subsidiaries

Wednesday, 05 October, 2005

The Management Board of KGHM Polska Miedź S.A. announces that on 30 September 2005 the Regional Court for Wrocław-Fabryczna in Wrocław, Section IX (Economic) of the National Court of Registration registered the combination of the companies KGHM Metale S.A. and DSI S.A. The combination was carried out pursuant to art 492 par.1 pt 1 of the Polish Partnerships and Companies Code, i.e. in the form of a transfer of all of the assets of the acquiree, i.e. DSI S.A. to the acquirer, i.e. KGHM Metale S.A.

Following the merger of these entities the company will operate under the name of KGHM Metale DSI S.A.

As a result of the merger of these companies, the share capital of the acquirer was increased by PLN 64 000.0 thousand through the issuance of 6 400 000 registered shares with a face value of PLN 10.00 each. The issue price of these new shares is equal to their face value.

All of the shares in the increased share capital of KGHM Metale DSI S.A. were acquired by KGHM Polska Miedź S.A., which until now had owned 100% of the shares of KGHM Metale S.A. and 77.46% of the shares of DSI S.A.

The carrying amount of the shares of DSI S.A. in the accounts of KGHM Polska Miedź S.A. prior to registration of the combination of these companies amounted to PLN 118 638.2 thousand.

The basis for calculation of the capital increase was the shares exchange ratio of 1: 5.2145, i.e. for 1 share in the equity of DSI S.A., KGHM Polska Miedź S.A. received 5.2145 shares of KGHM Metale S.A. In exchange for 1 227 337 shares of DSI S.A. at PLN 99.00 each, KGHM Polska Miedź S.A. received 6 400 000 shares of the company KGHM Metale S.A. at 10.00 each.

The share capital of KGHM Metale DSI S.A. following registration of this combination amounts to PLN 223 373.7 thousand and is divided into 22 337 373 shares at PLN 10.00 each.

The total number of votes arising from all issued shares is 22 337 373.

KGHM Polska Miedź S.A. owns 100% of the shares of KGHM Metale DSI S.A.