Addendum to Vallex Group's press release from 02.02.2018

In its previous press release Teghout CJSC (hereinafter referred to as the “Company”) stated that due to the discontinuation of concentrates production it had to terminate employment contracts of nearly all of its employees. Termination notifications have been already provided to such employees.

Taking into consideration the importance if these issues, as well as in response to numerous requests we have received from the mass media, we deem it appropriate to disseminate the following clarifications:

As of 31 January 2018 the Company had 1190 employees, 1032 out of which received termination notifications to become effective in two months. Nevertheless, the Company makes its best efforts to provide employment to the core of its highly qualified personnel as it took tremendous efforts to recruit, train and maintain those specialists. This will allow us to smoothly and expeditiously restart our production upon resolving pending issues and subsequently rehire most of our fired employees.

After expiration of the two-month notification period the Company will be left with about 300 employees, who will be tasked with ensuring protection and safety of the Company’s assets and territory. They will also look after the equipment requiring special care and maintenance.

The Company will maintain the employment of its personnel who proved their professional qualifications. Therefore, a considerable number of the fired employees, based on their background and professional qualifications (around 200 people), will receive employment opportunities in other companies of Vallex Group.

We are confident that should the circumstances allow within a short period of time the Company will rehire most of its employees.