28 Sep 2017 11:42

GV Gold in talks to buy Zoloto Kamchatki, eyeing Lenzoloto - paper

MOSCOW. Sept 28 (Interfax) - GV Gold (PJSC Vysochaishy), one of Russia's top ten gold miners, is holding negotiations to buy Zoloto Kamchatki from billionaire Viktor Vekselberg's Renova Group, national daily Kommersant reported on Thursday, citing sources.

A deal could be announced in the near future, some of the sources said. Others said that GV Gold is considering various M&A prospects, and Zoloto Kamchatki is just one of six assets being considered. GV Gold is also interested in Lenzoloto, which is controlled by PJSC Polyus , Russia's biggest gold producer, the paper's sources said.

Kommersant reported earlier that Renova might merge Zoloto Kamchatki with fellow gold miner Petropavlovsk, in which the group is the largest shareholder with 22.34%, and then continue the consolidation with GV Gold and Highland Gold Mining. But now Petropavlovsk's participation in the deal is not planned, the paper's sources said.

GV Gold CEO German Pikhoya told Interfax in early September that the company is preparing to go public in 2018, and in the baseline scenario is considering carrying out the IPO on the Moscow Exchange . The company is interested in going public in large part so that it can use its shares in mergers and acquisitions, Pikhoya said.

GV Gold now mines about 5 tonnes of gold per year, but for a successful IPO in 2018 it needs to boost production to 10-15 tonnes, analysts polled by Kommersant said. However, for GV Gold growth is important regardless of the IPO and it is unrealistic to dramatically increase production just with new projects, the paper cited one source as saying.

GV Gold's largest shareholders are Lanta Bank CEO Sergei Dokuchayev, Lanta Bank deputy CEO Natalia Opaleva and LT-Resurs CEO Valery Tikhonov, who each control 20.36% of shares. Blackrock holds 17.99%, the European Bank for Reconstruction and Development owns 5.26%, GV Gold board director Vladimir Kochetkov owns 5.46%, Cyprus-based Brishurt Ltd holds 6.37%, Sergei Vasilyev owns 0.91% and quasi-treasury stock makes up 2.95%.

GV Gold operates in Irkutsk Region and Yakutia, where it has production assets and is conducting exploration.