14 Mar 2018 07:00
Release time | IMMEDIATE |
Date | 14 March 2018 |
Polymetal International plc
Polymetal signs agreement for the sale of its stake in Dolinnoye
Polymetal International plc (LSE, MOEX: POLY; ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") have entered into a binding agreement to sell its 50% stake in the Dolinnoye gold property to JSC AK Altynalmas ("Altynalmas").
TRANSACTION DETAILS
Currently, Polymetal holds a 50% stake in the Dolinnoye property with the remaining 50% owned by Dolfinflip Co Limited ("Dolfinflip"). Under the agreement, Polymetal and Dolfinflip (together the "Sellers") each agree to transfer their respective 50% interests in "Aktogai Mys" LLC ("Aktogay Mys"), the licence and contract holder for the Dolinnoye gold property, to Altynalmas. The consideration receivable by each of the sellers shall be equal to 50% of US$ 33.5 million, subject to certain working capital adjustments. The transaction is expected to close in Q2 2018 and is subject to statutory approvals and other customary conditions.
INFORMATION ON THE PROPERTY
The Dolinnoye deposit is located in the Aktogay district of the Karaganda region in the Republic of Kazakhstan. JORC-compliant ore reserves (on 100% basis) comprise 5.1 Mt at 2.4 g/t gold for 0.4 Moz of gold contained. Additional mineral resources (on 100% basis) are estimated at 11.7 Mt at 2.6 g/t for 1.0 Moz of gold contained.
Polymetal's stake in Dolinnoye was acquired in a series of transactions in 2015-2016 with a view to establishing it as one of a number of ore sources for the Varvara processing hub. Mining commenced in 2017 with 4 Koz of gold produced at Varvara from Dolinnoye ore. All production activities were ceased in late 2017 as negotiations with Altynalmas continued to advance. The Group's production and cost guidance are not expected to be impacted by the transaction.
The consideration represents US$ 85 per ounce of gold reserve and US$ 24 per ounce of gold resource (inclusive of reserves), broadly in line with global averages for assets of this size.
"Dolinnoye became manifestly non-core after Komar fully supplanted it as a source of ore for Varvara", said Vitaly Nesis, Group CEO of Polymetal, "We will continue to consider other steps to optimize our asset portfolio to focus on high-margin long-life assets".
Notes: Reserve and resource estimate prepared by Polymetal as at 01.01.2018 on the basis of an initial reserve and resource estimate prepared by CSA as at 28.07.2016. Price: Au = US$1,200/oz.
Enquiries
| Media | Investor Relations | ||
FTI Consulting Leonid Fink Viktor Pomichal | +44 20 3727 1000 | Polymetal Evgenia Onuschenko Maryana Nesis Michael Vasiliev | ir@polymetalinternational.com +44 20 7016 9505 (UK)
+7 812 334 3666 (Russia) |
| Joint Corporate Brokers | |||
Morgan Stanley Andrew Foster Richard Brown Panmure Gordon Adam James James Stearns | +44 20 7425 8000
+44 20 7886 2500 | RBC Europe Limited Tristan Lovegrove Marcus Jackson | +44 20 7653 4000 |
FORWARD-LOOKING STATEMENTS
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED