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Alliance News


TOP NEWS: Polymetal Acquires Option To Buy 100% Of Nezhda Gold Deposit

Mon, 17th Jul 2017 10:04


LONDON (Alliance News) - Polymetal International PLC on Monday said it has agreed to buy an additional 7% stake in the Nezhdaninskoye gold deposit joint venture in Russia from its partner Ivan Kulakov, while also acquiring an option to buy the remaining 75.3% still owned by Kulakov.

Polymetal bought the 7% stake for USD8.0 million in cash, increasing its interest in the joint venture to 24.7%, after a "highly encouraging" resource estimate was recorded at Nezhda.

The call option to buy out the remaining 75.3% still held by Kulakov's investment vehicle Pallavicino Holdings Ltd, will comprise a premium of USD12.0 million in cash payable upfront, plus USD100 per ounce of attributable gold reserves.

The total consideration shall not be less than USD105.0 million and not more than USD180.0 million. USD10.0 million will be paid in cash and the remaining amount in shares.

The call option is exercisable between February 1 and June 1, 2018, entirely at Polymetal's discretion. Should Polymetal decide not to proceed with the exercise of the call option, it will have a put option to sell its 24.7% stake to Pallavicino Holdings at a notional cost of EUR1,000.

"Exploration at Nezhda confirmed a very large high-grade property with substantial open-pit potential. The asset fits perfectly with Polymetal's core competencies in refractory ore processing and remote asset development. We are very pleased that the new terms of the agreement on Nezhda give us significant decision-making flexibility and offer Polymetal a clear path to consolidating full ownership in this highly prospective asset," Chief Executive Vitaly Nesis said.

Shares in Polymetal were trading up 1.3% at 901.00 pence on Monday morning.

By Karolina Kaminska; karolinakaminska@alliancenews.com; @KarolinaAllNews

Copyright 2017 Alliance News Limited. All Rights Reserved.

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