Strukov's next move25 Mar 2021 18:30
Take over IRC
Here's an article from Investors Chronical
Russian miners are being hoovered up
Alex Hamer March 24, 2021
Miners with assets in Russia’s far east are getting picked off the London Stock Exchange like teenagers in a horror film. First was Highland Gold Mining last year, then the offer came in for Kaz Minerals (KAZ) – which has the Baimskaya copper project in Russia’s Chukotka region – and now Trans-Siberian Gold (TSG) shareholders are being offered 118p a share for their holdings in the company.
Vladislav Sviblov, who also took over Highland, will pay just over £100m for the 40,000 ounce (oz) a year gold miner, and has already sewn up over 50 per cent of the shares through an agreement with Trans-Siberian’s major shareholder UFG Asset Management and two directors who have worked for UFG.
Trans-Siberian's low free float means it has never had high trading volumes, but this deal signals a trend that shareholders need to keep an eye on. London has a fraction of the mining stocks listed elsewhere, although they are better quality overall than Toronto’s venture exchange chancers and Australia’s lifestyle explorers.
There is a link between these deals aside from the geography: Russia’s second largest bank, VTB. While it would seem obvious such a large institution would work with plenty of mining companies, these deals are being done through its London office.
Who could be next?
With the gold price well adrift of last year's highs, one mid-tier London-listed gold miner is trading a third lower than in September. This company also operates in Russia’s east and has a few familiar faces involved: Petropavlovsk (POG).
Petropavlovsk is now run by former Highland boss Denis Alexandrov, who took over in December. Sviblov was a minor shareholder until last year, but the obvious buyer is fellow gold miner Uzhuralzoloto Group of Companies (UGC), which was instrumental in rolling the board last year and has an existing relationship with VTB.
VTB’s involvement in London's previous mining transactions was critical. It served as adviser for Sviblov’s company Fortiana when he bought Highland and for the Trans-Siberian offer, and lent the Kaz buyers $3.5bn.
The two key London-based bankers behind the recent deals did not respond to a question on whether they are currently working with UGC.
There are some factors that make Petropavlovsk less likely a target than Highland or Trans-Siberian, however. It has a few more combative shareholders, as seen in the fight over the board last year, where UGC and combined 12 per cent shareholders Everest Alliance and Slevin voted out previously resurrected chief executive Pavel Maslovskiy.
The company also carries a one-third stake in iron ore mining group IRC (HK:1029), which it has been unable to offload. The miner also added a Moscow listing recently, although this process began under the previous management. A smaller company like the private GV Gold could be an easier target,
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