Company Presentation (by Andre Kolesin, Vice Chairman of the Council, Finance) “CEO Meets Investor 2010” NASDAQ OMX Rīga, Latvia 10-December-2010

2 CONTENTS INTRODUCTION – JSC “LIEPĀJAS METALURGS” (LM) ORGANISATION STRUCTURE EXISTING PRODUCTION PROCESS MODERNIZATION PROGRAM SOCIO-ECONOMIC SIGNIFICANCE OF LM IN THE REPUBLIC OF LATVIA

3 LM is a manufacturer of rolled steel products based in Liepaja, Latvia. ( LM was founded in 1882 as a wire and nail factory. About 2300 employees currently work at LM. LM was privatized in 1995 and in 1996 the Company was successfully shaped into a Joint-Stock enterprise. LM is a Joint Stock Company, whose shares are quoted and publicly traded on the Riga Stock Exchange (NASDAQ-OMX). The Company’s records are openly available on the Stock Exchange web site since the year of LM is the only steel mill in the Baltic region. Company’s main product (99% of revenues) – construction reinforcement bar (rebar). INTRODUCTION – JSC “LIEPĀJAS METALURGS” (LM) 10-December-2010

CompanyLM shares in % IndustryTurnover 2009 ( €’ 000) Liepājas osta LM (Liepaja ’ s Port LM) 95Stevedoring services, cargo, ship broker service, ship agency 23’000 The Company handles over 30 % of the total cargo turnover at the ice-free Liepaja Port. The port has six berths with a maximum draft of 9.5 metres and a maximum length of 225 metres. Medical Center of JSC “ Liepājas Metalurgs ” 100Medical Services 1 ’ 500 Rūķis LM 100Construction materials production, waste and crushed slag processing 1 ’ December-2010 MAIN COMPANIES INCLUDED IN CONSOLIDATION GROUP OF LM:

10-December ORGANISATION STRUCTURE:

Key Managers of the Company: PositionName, surnameEducationTime worked in the company Chairman of the Council (Supervisory Board) Sergejs Zaharjins Higher (engineer – mechanic) 37 years Chairman of the Board (Management Board) Valerijs Terentjevs Higher (engineer – mechanic) 40 years Board Member (Supplies) Iļja Segals Higher (engineer – mechanic) 14 years Board Member and Managing Director Leons PtičkinsHigher (economist)18 years Chief Engineer (Technical Director) Egils Kup š isHigher (engineer – mechanic) 18 years Chief EconomistBenita ImbovicaHigher (economist)43 years Vice Chairman of the Council (Sales) Alex ZaharinHigher (BA Finance / BA IT, USA) 7 years Vice Chairman of the Council, Finance Andrew KolesinHigher (MBA, BA Economics, BS Accounting – all USA) 5 years 10-December

7 EXISTING PRODUCTION PROCESS On December 9, 1965, a new steel melting shop with three open heath furnaces was commissioned. In October 1968, the first million tons of rolled products was manufactured, and in April 1970, the first continuous casting machine (vertical caster) was put into operation. LM presently operates three Open-Hearth Furnaces (OHFs) feeding a billet caster which in turn supplies two Rolling Mills (RMs). A new continuous billet caster was installed in 2006 by Siemens VAI to replace the old Vertical Casters. The LM operation presently consists of: · 3 x 170 tonne Siemens-Martin Open-Hearth Furnaces; · 2 x eight strand Vertical Billet Casters (one is in process being demolished); 1 x four-strand curved mould Continuous Billet Caster (installed in 2006). · 1 x 350/250 Rebar & Wire-rod Rolling Mill; · 1 x 350 Rebar Rolling Mills. 10-December-2010

8 The existing three Open-Heart Furnace (Martin Furnaces) meltshop’s annual capacity is ~ 555’000 t of billet (semi- finished product) which are taken to the Rolling Mills for further production. Two Rolling Mills produce combined about 670’000 t per year of rebar (finished product). As a result, LM buys ~ 140K t of billet elsewhere (chiefly in Belarus) in order to keep its Rolling Mills producing at their full capacity. Mill 250 / ’ 000 t/y 290 ’ 000 t/y finished products 10-December-2010

9 Open Hearth Furnaces Electric Arc Furnace Existing Rolling Mills 550,000 tonnes PURCHASED SCRAP 520,000 tonnes 900,000 tonnes 865,000 tonnes 670,000 tonnes Billet Sales 172,000 tonnes Billet Purchase 140,000 tonnes LM’S MODERNIZATION Existing versus Future: Ladle Furnace 10-December-2010

10 THE MODERNIZATION PROGRAM THE START - August 26, 2004 opened up a new era for LM, when the factory’s full scale modernization of the steelmaking process began. A contract to build a modern continuous steel casting machine was signed in co-operation with Austrian-Italian partners. Phase 1 of the modernization program (completed) - financed by the Company’s own resources: 10-December-2010

11 10-December-2010 Phase 2 of the Modernization Program (chronology): - The investment involves replacement of the steelmaking operation - replacement of the three existing open-heart furnaces (OHF) with latest technology electric arc furnace (EAF) and ladle furnace (LF). - The Government of the Republic of Latvia (“Saeima”) at the State Budget approval session in November 2008, voted in favor of the State Guarantee for the needs of financing of the LM’s modernization program to be included in the State Budget for The EPC Turnkey Supply Contracts were signed by LM with STG Group S.p.A. (STG) (Italy) and in June 2009 for the total value of € 81 million. - The European Commission formally approved the State Guarantee of the Republic of Latvia for the financing needs of LM’s modernization program on December 15, The Financing (loan) Agreement was signed by and between LM and UniCredit MedioCredito Centrale S.p.A. (UniCredit) (Italy) on December 29, 2009 for the total value of € 85.6 million. - The State Guarantee was signed by and between UniCredit and Ministry of Finance of the Republic of Latvia on December 30, 2009 (on the last day possible) for the same amount as financing. - The EPC Turnkey Supply Contract entered into full force and effect on June 17, The Financing entered into full force and effect on June 30, THE MODERNIZATION PROGRAM

12 Legal Structure: SOVEREIGN RISK COVER COMMERCIAL RISK COVER 10-December-2010 THE MODERNIZATION PROGRAM EPC Supply Contract (“turn-key”) Long-Term Financing Agreement

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14 SOCIO-ECONOMIC SIGNIFICANCE OF LM IN THE REPUBLIC OF LATVIA (1) LM is the Top-10 largest enterprise in Latvia by net sales. Among the production enterprises included on the TOP 500 list the Company is ranked as No. 1 (2009) LM is one of the largest exporters in Latvia. The Company was recognized as the biggest Latvian exporter in 2008 and was granted the LR Ministry of Economics „Award for Export and Innovation 2008” as well as the title „Export Champion 2008” LM is producing over 5% of the total Latvia’s national export LM employs 6.2% of economically active population of the City of Liepaja, and 7.1% of gainfully employed residents of Liepaja 10-December-2010

15 SOCIO-ECONOMIC SIGNIFICANCE OF LM IN THE REPUBLIC OF LATVIA (2) LM is the largest tax payer in the region Kurzeme, attributing close to 20% of the City of Liepaja’s annual budget 10-December-2010

THANK YOU! 10-December-2010