Russia's gold major Polymetal looks to sell its problem assets

By Rhod Mackenzie

The Russian goldminer Polymetal which is the country's second largest precious metals producer and ranked in the world's top ten in terms of its reserves and production is not considering the possibility of any partial sale of its Russian assets but one buyer for all of them, according to a statement by the head of the company, Vitaly Nesis.
The company has already received a number of proposals for the purchase of the assets, but Nesis refused to disclose the names on the list of the interested parties.

At the same time, according to the head of the company, if the Russian part of the business is sold to foreign investors, the process will be delayed due to the need to seek and gain approval of any transaction with the authorities. "We have some time, not very much, but we do have time, so that any deal does not turn into an emergency, so that the shareholders of Polymetal International get a reasonable, comensurate amount of money for the Russian assets. It is clear that if you look at the situation dispassionately, there is no hope for a 2021 valuation. There will be some kind of discount, but it will have to be measured as in percentages, not in terms of large amounts" he noted.

Earlier, the chairman of the Union of Gold Miners of Russia, Sergei Kashuba, said that Polymetal would not be able to sell its Russian assets within the next 6-9 months. According to him, any deal will require the approval of both the Russian authorities and the US OFAC. In addition, if a deal is concluded with Chinese companies, it will be necessary to conclude intergovernmental agreements, which means that any deal could take several years.

Polymetal International plc now domiciled in Kazahstan and listed on the KSE. it specialises in the mining of gold and silver. It was forced to give up its listing on the London Stock Exchange due to the sanctions imposed on Russia and is now looking to divest its Russian assets

The company operates mines in Russia and Kazakhstan. In Russia, the company owns the Dukat and Omolon centres (Magadan Region), the Amur MMC, the Svetloye and Albazino deposits (Khabarovsk Territory), Mayskoye (Chukotka Autonomous Okrug), Vorontsovskoye (Sverdlovsk Region) and Nezhdaninskoye (Yakutia). In Kazakhstan, it is implementing the Kyzyl project (East Kazakhstan region) and developing the Varvara field (Kostanay region). In 2022, it produced 1.71 million ounces of gold equivalent (+2% y-o-y).
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