KGHM POLSKA MIEDŹ SA Signing a Shareholders Agreement with respect to the project for preparation and building of a nuclear power plant

The Management Board of KGHM Polska Miedź S.A., in reference to currentreport no. 39/2013 dated 31 December 2013 regarding the continuation of work on the project to prepare and build a nuclear power plant in Poland, announces that a Shareholders Agreement was signed on 3 September 2014 between KGHM Polska Miedź S.A., Polska Grupa Energetyczna S.A. ("PGE"), TAURON Polska Energia S.A. and ENEA S.A., according to which KGHM Polska Miedź S.A., TAURON Polska Energia S.A. and ENEA S.A., as Business Partners, will acquire from PGE a total of 30% of the shares, on the basis of a separate agreement (each Business Partner will acquire 10% of the shares) in the special purpose company ̶ PGE EJ 1 sp. z o.o. This company is responsible for the preparation and execution of the investment to build and operate the first Polish nuclear power plant with a capacity of approx. 3000 MWe ("the Project"). According to the agreement assumptions, the PGE Group will be the Project Leader and the company PGE EJ 1 sp. z o.o. will be the power plant's operator. Purchase of the shares of PGE EJ 1 sp. z o.o. by the Business Partners is contingent on the approval of the President of the Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów) for the concentration. An application concerning this matter has been submitted by the parties to the Shareholders Agreement on 1 August 2014.

According to the Shareholders Agreement, the parties are obliged,proportionally to their interest, to fund activities for project preparation for the years 2014-2016 during the initial phase of the Project ("Initial Phase"). The Initial Phase's objective is to determine such elements as potential partners, including the strategic partner, technology suppliers, EPC (Engineering, Procurement, Construction) contractors, nuclear fuel suppliers and acquiring funds for the Project, as well as preparing PGE EJ 1 sp. z o.o. organisationally and in terms of the skills required for its role as the nuclear power plant's future operator, responsible for its safe and efficient operation ("Integrated Proceedings"). According to the Shareholders Agreement, KGHM's expenditures during the Initial Phase will not exceed approx. PLN 107 million and will cover contributions in the increased share capital of PGE EJ 1 sp. z o.o.

The parties to the Shareholders Agreement expect that subsequentdecisions concerning the Project, including a decision on the further participation of each Party (including KGHM Polska Miedź S.A.) in the next stage of the Project, will be made after the end of the Initial Phase, directly before the conclusion of the Integrated Proceedings.

Participation of KGHM Polska Miedź S.A. in the Project provides anopportunity to secure long-term energy supply for the core business of KGHM under competitive conditions.

Legal basis: Art. 56 sec. 5 of the Act dated 29 July 2005 on publicofferings and conditions governing theintroduction of financial instruments to organised trading, and on public companies (unified text: Journal of Laws 2013.1382).

More information on page: biznes.pap.pl

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