Last checked at 18 Oct 2019 18:00
ACQUISITION OF PILOT PLANT AND TECHNOLOGY FOR TAILINGS PROCESSING
EVRAZ plc ("EVRAZ", the "Company" and together with its subsidiaries, the "Group") announces today that it has acquired the pilot plant and technology for tailings processing (the "Transaction").
Transaction Highlights
JCS EVRAZ Vanady Tula ("EVT"), the fully owned subsidiary of the Company, purchased the pilot plant and technology for EVRAZ Kachkanarsky Ore Mining and Processing Plant ("KGOK") tailing processing from LLC Rock Capital Partners ("RCP") for RUB 249,132,000, VAT 20% inclusive (around US$3,8 million). The purchase price was verified by the independent valuation report prepared by LLC American Appraisal.
Background
During 2016 - 2017 RCP, an entity being controlled by major shareholders of EVRAZ, completed and started up the pilot plant for complex processing of tailings. The objective of the pilot plant was to develop a technology of manufacturing the products for chemical industry by acid-using hydrometallurgical processing of the feed.
RCP was developing the technology in the external lab as well as at the pilot production site. Production site was located at the third party plant in Russia, which had provided necessary infrastructure to RCP. In January 2019, the pilot plant was dismantled as the third party had declined to proceed with the experiments.
Main products of the plant were:
·; MgSO4 - used for fertilisers and Mn wash at EVT;
·; Coagulant (aluminum and iron sulfates mix) - widely used at chemical plants including EVT;
·; Complex alloy.
Transaction benefits
Presently, mining and processing of titanium magnetite ores at KGOK recovers only about 20% of the metals contained in ore. The other 80% goes to tailings dumps which accumulated over than 1.5 billion tonnes of tailings with various valuable metals. EVRAZ has an opportunity to enjoy the positive economic effect from its tailings being dumped with the use of the RCP's technology which was developed specifically for processing of KGOK's tailings. The feed for the processing is free of charge for EVRAZ and almost infinite taking into account the amount of KGOK's tailings.
Information on RCP
RCP provide a wide range of services, from performing geological prospecting works to assessing resources, and is known for investing into R&D of mining projects. In its investing activity RCP refer to the actual application of the new science so that a new or better product can begin to take shape. Other mining projects in which RCP participated were gold mining in the Far East of Russia and EU.
Pursuant to UK Listing Authority ("UKLA") Listing Rule 11.1.4R, RCP is classified as a related party of EVRAZ, due to its direct shareholders also being substantial shareholders in the Company. The Transaction constitutes a smaller related party transaction as defined under UKLA Listing Rule 11.1.10R and EVRAZ has accordingly obtained a written confirmation from a sponsor that the terms of the Transaction are fair and reasonable as far as shareholders of EVRAZ are concerned.
For further information:
Media Relations:
London: +44 207 832 8998
Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
London: +44 207 832 8990
Moscow: +7 495 232 1370
ir@evraz.com