RE: Risk of Investing HERE - Honest Opinion required!!28 Mar 2022 14:50
Two-thirds of Polymetal’s assets are in Russia along with its management team, which is based in St Petersburg. The remainder of its business is in Kazakhstan where it operates two mines that produced more than 550,000 ounces of gold equivalent last year and generates enough cash to cover its dividend.
Last year it produced nearly 1.7mn ounces of gold. At the end of December the company had $1.8bn of net debt and no borrowings maturing this year. At present 39 per cent of the debt is with European banks, which may need to be refinanced at higher costs with Russian, Kazakh or Chinese banks, according to Berenberg.
When the company published annual results at the start of the month, Polymetal’s chief executive said its management team had not had time to consider the merits of a demerger because they had been “so busy fighting fires”.
“Management is definitely committed to evaluating the potential benefits and costs of such an approach,” he said.
Shares in Polymetal were up almost 40 per cent on Monday at 248p, valuing the company at £1bn, on hopes of a peace deal in Ukraine. Before the war the company was worth £5bn.