PJSC Polyus (MOEX — PLZL) (“Polyus”, or the “Company”), Russia’s largest gold producer, announces that a 100% subsidiary of the Company, JSC Polyus, has signed an agreement for the sale of its 82.34% stake in a joint venture entity with Polymetal holding 100% of JSC South-Verkhoyansk Mining Company (“SVMC”). SVMC holds the mining and exploration license for the Nezhdaninskoye gold deposit (“Property”) in Yakutia, Russia. The stake will be sold for a total consideration of $158 million to a company beneficially controlled by Mr. Ivan Kulakov, a former managing director of Highland Gold Mining.
The consideration will be paid in two installments, with $100 million paid upon completion of the stake transfer and the remaining contingent part of $58 million — once the project meets certain operational and financial criteria.
Completion of the transaction will be subject to obtaining all necessary corporate and regulatory approvals.
Polyus and Polymetal entered into the joint venture in December 2015. Polymetal is acting as the managing partner of the joint venture, responsible for the development, engineering and construction management of the Property.
Pavel Grachev, Chief Executive Officer of Polyus, commented:
“The successful completion of the deal will enable Polyus to focus management and financial resources on its current pipeline of large-scale open-pit projects and achieving our production target of at least 2.7 moz by 2020.”
Polyus (www.polyus.com) is the largest gold producer in Russia and one of the top 10 gold miners globally by ounces produced. The Company also holds the fourth largest mineral resources base in the world.
Polyus group’s principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Sakha Republic (Yakutia).
In 2016, the Company confirmed its status of one of the lowest-cost gold producers globally.
Victor Drozdov, Director Investor Relations
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Victoria Vasilyeva, Director Public Relations
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Forward looking statement
This announcement may contain “forward-looking statements” concerning Polyus and/or Polyus group. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “continue”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.