PJSC Polyus (LSE, MOEX: PLZL) (Polyus, or the Company), the largest gold producer in Russia, intends to exercise its right to accelerate the buy-out of LLC RT Business Development (RT) participation interest in SL Gold Limited Liability Company (SL Gold), the holder of the Sukhoi Log deposit license, and consolidate SL Gold, increasing its participation interest from 78% to 100% for a total consideration of approximately $128.2 million.
SL Gold shareholder structure
In December 2016, JSC Polyus Krasnoyarsk, a 100% subsidiary of the Company, which held 51% in SL Gold, entered into a number of cash option agreements with RT to acquire a 23.9% stake in SL Gold for a total consideration of approximately $ 138.9 million to be exercised during 2017–2022. In 2017-2020, Polyus acquired a 13.2% stake in SL Gold for a total consideration of approximately $76.4 million under cash option agreements. The outstanding instalments amount to approximately $62.5 million for a 10.7% participation interest in SL Gold.
In July 2017, JSC Polyus Krasnoyarsk entered into a number of option agreements with RT to acquire an additional 25.1% participation interest in SL Gold for a total consideration of approximately $145.9 million, payable in Polyus’ shares during 2017-2022. In 2017-2020, Polyus acquired a 13.8% stake in SL Gold for a total consideration of $80.3 million, which were paid in Polyus’ shares. The outstanding instalments amount to $65.7 million for an 11.3% participation interest in SL Gold.
Polyus currently owns 78% in SL Gold.
Today, JSC Polyus Krasnoyarsk and RT have agreed to:
- amend the terms of a number of options relating to RT’s participation interest in SL Gold that were entered into in July 2017, to allow Polyus to purchase RT’s 11.3% participation interest in SL Gold at the initially agreed valuation of $65.7 mln for cash consideration instead of Polyus’ shares (Amended Options); and
- accelerate the exercise of all outstanding Polyus’ call options relating to RT’s interest in SL Gold (including the Amended Options) as a result of which Polyus will buy-out RT’s entire stake of 22% in SL Gold for $128.2 million, all payable in cash.
Following the exercise of all outstanding options, Polyus will consolidate 100% participation interest in SL Gold.
Polyus is the world’s fourth-largest gold mining company by production volumes, with the third-largest attributable gold reserves and the lowest production costs among major global gold producers.
The company’s principal operations are located in Siberia and the Russian Far East: Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).
Investor and Media contact
Victor Drozdov, Director Communications & Investor Relations (CIR) Department
+7 (495) 641 33 77
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.