Omolon Gold Mining Inc.

MIGA signed a reinsurance agreement with the Overseas Private Investment Corporation (OPIC) to help provide adequate coverage for a project already insured by OPIC. The coverage will reinsure OPIC for Kinam Gold Inc.'s $60 million equity investment in a gold and silver mine in the Magadan region of Russia. OPIC has provided $67.5 million and the European Bank for Reconstruction and Development has provided $62.5 million in loan financing for the project. MIGA's gross exposure will be $27.4 million, up to $11 million of it to be reinsured under a quota share reinsurance treaty. The reinsurance will cover OPIC against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project enterprise, Omolon Gold Mining Inc., will reinvigorate Russia's declining mining industry by providing 15 percent of the country's gold production 400,000-450,000 ounces a year. The project will help to alleviate poverty by creating about 350 jobs in the region. Approximately 50 percent of goods and services will be procured locally, and businesses near the plant are expected to provide labor and construction materials, maintenance, catering, and transportation that will help generate local income and employment.