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What is it about gold mining in Russia that attracts mysterious cliques of individuals who are keen on skullduggery, do you think? More than half of Petropavlovsk’s board, including the CEO, CFO and chairman designate, have been ejected at AGM by the votes of four shareholder groups. POG has responded by bring in a new temporary board of old lags under Peter Hambro, POG’s founder and yo-yo chairman, and is asking the Takeover Panel to investigate possible collusion. All of this follows Konstantin Strukov’s Uzhuralzoloto Group of Companies buying into POG in February. Here’s house broker Peel Hunt:
The volte face by the UGC board members (from supporting the existing board in late May) and then delivery of a proxy vote against has the feel of a boardroom coup aimed at giving UGC control over POG’s assets, with only a 20% shareholding and without compensating shareholders, let alone offering a premium for control. In our minds, it highlights the strategic value of the POX hub in opening-up otherwise unprocessable Russian refractory deposits.?.?.?.?
Given the operational track record following the commissioning of the POX hub, the increased focus on improving its (already solid) ESG scorecard, and the strong share price response to both over the past six-to-nine months, we suspect the majority of POG shareholders would be happy with the board as was, and happy with Pavel Maslovskiy at the helm of the group. As such, these shareholders deserve the ability to vote at an AGM in possession of the full facts and with a strong light shone on recent events. Indeed, by number the proxy votes received ahead of the AGM reinforce this view.
In reality, we feel this is a coup aimed at securing control of the one refractory ore processing hub in Russia that has spare capacity, a highly strategic asset given the large number of refractory ore deposits in country. The route taken, without offering payment, let alone a control premium, smacks of a coup and will tarnish the reputation of all companies operating in Russia in investors’ eyes, in our view.
Not all Russian companies are same. look at Polymetal in FTSE100 , they operate in Russia too. POG always had prolems , nothing new there.
We have a much better management here at HGM than POG in my view.
Polymetal is a large cap miner and less susceptible to these actions occurring, i agree that POG has always had problems and HGM has better management. I am not trying to downgrade HGM as i am a shareholder, just thought this was food for thought with mid and low cap miners operating in Russia.
Kind regards Biggles.
Well this company is not that small either. it's valued over a billion in the US dollars or £860m and produces around 300,000 ounces of gold annually. It's one of the top gold producers listed at the London Stock Exchange.