Brexit might prompt Nordgold to explore alternative venues for placement- CEO
MOSCOW. June 24 (Interfax) - Britain's exit from the European Union might prompt Russian gold miner Nordgold to explore alternative venues for a placement, Nordgold CEO Nikolai Zelenski told Interfax.
Nordgold's strategy is built in such a way that the company disengages itself from external factors as much as possible, so from the point of view of operations and the business strategy, Brexit will not affect Nordgold, he said.
"At the same tine, with Britain's exit from the EU, London could start to wane as a financial center, which hasn't ever been a focal point for the world's gold miners anyway," he said.
"So Brexit might be a reason to explore alternative venues for a placement. The Toronto exchange, for example is a mining industry center. We still plan to change jurisdiction from Netherlands to UK, but it is too early to talk about the prospects for placing on one exchange of another. Brexit is an unclear, unprecedented event, we need to look into the legal subtleties," Zelenski said.
Nordgold is seeking a premium listing on the London Stock Exchange. In order for Nordgold to receive a premium listing, the company needs to increase its free float to a minimum of 25%, whereas right now it is at 9%. In order to receive the highest premium listing on the FTSE, a free float of 25% is necessary for companies registered in Britain, and 50% for foreigners.
As for gold prices, Brexit will probably have no effect on them in the long run.
"Brexit cannot affect the long-term gold price trend - it will more likely be a temporary phenomenon. Trends are set by underlying factors like supply and demand," Zelenski said.
"To be frank, Britain does not have as big an influence on the global economy as the United States, for example, so if Brexit remains a local phenomenon for Europe, then it will not have such a significant and long-term impact on gold prices. But if Britain's exit from the EU is going to be the first link in a chain of global decentralization events, then it will have a colossal impact," he said.
Gold spot prices rose to more than a two year high of $1,359/oz immediately following the British referendum results, before correcting down to $1,324 by 3:00 p.m. Moscow time.
Nordgold is the former gold mining division of Russian steelmaker Severstal and was spun off in January 2012. Nordgold's principal beneficiary is Alexei Mordashov with 90.73%, and the free float is about 9%.
Nordgold has nine operating assets in four countries - Russia, Kazakhstan, Guinea and Burkina Faso, as well as a number of projects at the development and exploration stage.
