Polymetal could buy Kazakhstan's Bakyrchik gold field for $500 mln, partly with shares - paper
MOSCOW. Oct 10 (Interfax) - Russia's Polymetal International plc is in talks to buy the Bakyrchik gold deposit in northeast Kazakhstan for up to $500 million, some of it in shares, the Kommersant newspaper said, quoting sources familiar with the company's plans.
Bakyrchik holds 5.76 million ounces of gold with grading of 8 g/tonne [3.9 g/t gold equivalent] and resources of 7.35 million oz.
It and the Bolshevik field, with more than 1 million oz, make up the Kyzyl Gold project, operated by Altynalmas Gold Ltd, the ultimate beneficiary of which is Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev. Kulibayev has been CEO of Kazakhstan's national welfare fund Samruk-Kazyna since 20011 and is a non-executive director at Russia's Gazprom .
Polymetal does not plan to acquire Bolshevik, but the field could be part of the deal, Kommersant's sources said.
Polymetal might use shares to fund $200 million of the deal, which could give Kulibayev a stake of 5% in the company, one of Russia's three biggest gold producers.
Polymetal told Interfax that it did not comment on market rumors.
Polymetal has been using shares to pay for assets of late. It paid 1.4% shares plus $3.9 million cash for 100% of Mayskoye Mining Company in April 2013, 0.2% shares for the Olcha field in the Magadan region, which it bought from Ovoca gold in January, and 0.14% shares for a 25% stake in the Svetloborkoye platinum deposit.
Polymetal already owns the Varvarinskoye fild in Kazakahstan but there will be no synergy as Bakyrchik will need a recovery plant of its own, said Sergei Donskoy, analyst at Societe Generale.
Jersey-based Polymetal International plc is the holding company for OJSC Polymetal, Russia's largest silver producer and one of the country's largest gold miners. The company has operations in Magadan and Sverdlovsk regions, Khabarovsk Territory, Chukotka and Kazakhstan.
Polymetal's largest shareholders are Alexander Nesis' ICT Group (17.9%), Petr Kellner's PPF Group (20.86%) and Alexander Mamut (10.12%). The free float is 51%.
