4 Jun 2008 17:14
For immediate releaseMoscow, June 4, 2008
Management of Polyus Gold considered offer of Onexim Holding
OJSC Polyus Gold (RTS, MICEX and LSE - PLZL) (the Company), Russia’s leading gold producer, today announces that, the Company’s management had considered the offer received from Onexim Holding Limited to purchase 12,476,401 ordinary shares of the Company. The reasoned stance of the management on Onexim’s offer was prepared and sent to the members of the Board.
Particularly, the reasoned stance sent to all the members of the Board of Polyus Gold says the following:
The offer on Onexim Holding Limited is similar to the offer received on 21.05.2008 from Kazimir Partners, in terms of the price of the offers. The differences between the offers are: 1) Onexim's offer covers the whole stake in the Company held by Jenington International Inc.; 2) Onexim's offer doesn't include a request for voting rights on the Company's AGM on 26.06.2008;
As of 01.01.2008 OJSC Polyus Gold had $1.4 billion of cash, which have been placed at a conservative interest rate, in accordance with the Treasury policy approved by the Board;
According to the strategy, approved by the Board of Polyus Gold, as well as according to the updated Company's model, the Company will not require additional funds until 2010, when financing Natalka mine and other projects might require substantial investments. Only after 2010 the management is planning to raise additional money through debt financing, and consider the possibility to sell the Jenington's stake in the Company. In the event of continued growth of gold priced the decision to sell the stake may be postponed even further.
The gold price rally having started at the end of last year means further operating cash flow increase. In the event the gold price stays above $850 per oz, the debt financing will be not required before 2010. Therefore, in the event the Jenington's stake is sold, the raised money will not be used before 2011.
We think that the sale of the stake in the company belonging to Jenington International Inc., will create excessive cash (over $2.3 billion) at the end of 2008 - beginning of 2009. In addition to that, the early sale of the stake will lead to the loss of shareholders value
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Polyus Gold is the largest gold producer in Russia. Headquartered in Moscow, Polyus Gold's operating mines and development/exploration projects are located in five major gold mining regions of Russia - Krasnoyarsk, Irkutsk, Magadan, Amur regions and the Republic of Sakha (Yakutia). The company produced 1.2 m oz of gold in 2007.
For further information please contact
For investors:
Alexey V. Chernushkin, Director, CM and IR
Evguenia V.Buydina, IR manager
+7(495) 641-3377
+7(495) 785-4031
ir@polyusgold.com
For press:
Victoria V. Vergelskaya, PR Director Elena D. Evstigneeva, Media Relations +7 (495) 641-3365 +7 (495) 544-5496
pr@polyusgold.com