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EastRussia Bulletin: HGM Expands Control over Gold Assets in Chukotka - EastRussia | Far East

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EastRussia Bulletin: HGM Expands Control over Gold Assets in Chukotka

EastRussia Bulletin: HGM Expands Control over Gold Assets in Chukotka
Photo: EastRussia
Highland Gold Mining (HGM) expands direct control over Chukchi gold-mining assets, the latest issue of the EastRussia bulletin says.

The company intends to buy back from the main shareholders of E. Shvidler, R. Abramovich and their partners (controlling 91% of shares) the Valunista mine (production in 37,4 is 2017 thousand ounces), Kanchalano-Amguem area (stocks - 31 ounces of gold equivalent, resources - 554 million ounces) and the exploratory section of Kayenmyvaam.

Currently, these assets are owned by Aristus Holdings (structure Millhouse R. Abramovich). Their development involves the release of an average of 48 thousand ounces of gold per year in 2018-2028. HGM intends to pay the amount of the transaction with new shares for $ 78,7 million, as well as take over $ 12,3 million net debt of the acquired assets. In addition, the transaction requires the approval of at least 50% of minority shareholders, FAS and the legal commission for foreign investment. Closing of the deal is scheduled for the third-fourth quarter of this year.

Recall that HGM had previously acquired the assets of its key shareholders in the Chukotka Autonomous Area - the Klen deposit in 2012 for $ 69 million (resource reserves - 627 thousand ounces). Currently, the company is engaged in the region in the Kekura field, bought from the "Basic metals" (reserves - 1,7 million ounces, investments are estimated at $ 229 million), the start of production is scheduled for 2021 year.

A detailed analysis of this and other relevant topics can be found in the weekly bulletin EastRussia (https://www.eastrussia.ru/subscribe/).