Norilsk Nickel consolidates several exploration projects at Intergeoproekt
MOSCOW. July 10 (Interfax) - Norilsk Nickel has liquidated three subsidiaries that were independently involved in exploration work and transferred their assets to LLC Intergeoproekt, which combines all of the projects aimed at expanding the mining and smelting giant's resource base in Russia.
Norilsk Nickel's list of affiliated parties as of July 3 no longer includes LLC Khibinskaya GRK, LLC Karelnickel and LLC Ferrosplav. Norilsk Nickel told Interfax that all three companies were merged into Intergeoproekt.
Khibinskaya GRK is failed joint venture between Norilsk Nickel and BHP Billiton to mine diamonds at the Khibinskaya and Kharlovskaya fields in Murmansk Region. The companies announced in 2006 that they would cooperate in exploration and development of mineral resources in Western Siberia and Northwest Russia. There were two specific projects: the development of the Syradasai coal field on Taimyr Peninsula with resources of about 5.3 billion tonnes, and the diamond project in Murmansk Region. Although Norilsk Nickel is still conducting exploration work at Syradasai (though alone, without BHP), the company quickly dropped the plans to mine diamonds.
The Khibinskaya and Kharlovskaya properties, where the company explored for kimberlite fields for two years, were deemed unpromising for diamond finds in early 2009. The Federal Subsurface Resources Agency (Rosnedra) cancelled Khibinskaya GRK's licenses the same year, and the process of liquidating the company was begun in 2011.
The attempt to find lucrative deposits of nickel, platinum group metals and gold at the Sumozero-Pulozerskaya field in Karelia, the license to which was acquired by LLC Karelnickel in 2003. Exploration continued until 2009, three sections were identified and forecast nickel and gold resources were calculated. However, commercial reserves were never found, the license expired at the end of 2009 and it was returned to Rosnedra.
Unlike these projects, the potential of the Kureisko-Gorbiachinskaya field, the exploration license to which was acquired by LLC Ferrosplav in 2007, has not yet been exhausted. The license to this field was initially acquired by Norilsk Nickel itself in 2006, but a year later it was transferred to Ferrosplav on the orders of then deputy CEO Maxim Finsky. Geological work at this property, located in the Krasnoyarsk Territory and containing ore similar to the main deposits of Taimyr, was conducted by Intergeoproekt subsidiary LLC Norilskgeologia (which was later joined by another subsidiary, LLC Geokomp). In early 2011 the license was returned to Norilsk Nickel directly, after which liquidation procedures were begun at Ferrosplav.
Commercial deposits of nickel, copper and PGMs have not yet been found at the Kureisko-Gorbiachinskaya field Kureisko-Gorbiachinskaya field.
Intergeoproekt, which is wholly owned by Norilsk Nickel, includes companies involved in geological exploration that hold exploration licenses to deposits in Krasnoyarsk Territory, Trans-Baikal and Murmansk Region, as well as LLC Vostokgeologia, LLC Murmangold, LLC Northern Chrome Company and LLC Trans-Baikal Metals. A subsidiary of the latter, Bystrinskoye holds the license to the Bystrinskoye and Bugdainskoye polymetal deposits, as well as another three properties in Trans-Baikal Territory, the development of which has been found unviable.
Prior to 2008, Norilsk Nickel consolidated the licenses to prospective projects at Intergeo, which went to Mikhail Prokhorov's Onexim in the division of the assets of KM Invest, Prokhorov's joint company with former business partner Vladimir Potanin, head of Interros. Intergeo was headed by Finsky.
Onexim estimated Intergeo's prospective reserves at more than 15 million tonnes of copper, 9 million tonnes of nickel, 1 million tonnes of molybdenum and 750 tonnes of PGMs, and portrayed Intergeo as a future global leader in production of these metals.
Intergeo held the licenses to the Arbinsk and Eastern Chelyabinsk fields, the western flank fo the Gremyakhi-Vyrmes deposit, the Iysko-Tagul deposit, Togunasskaya field, Uronaiskaya field, and the Chernogorskoye and Ak-Sug deposits. Some projects, including the licenses to the Chernogorskoye PGM deposit and the Bolshoi Seyim ilmenite deposit, were subsequently sold.
The largest projects that the company is focusing on are the Ak-Sug copper porphyry deposit and the Kingash nickel sulphide deposit. Intergeo plans to complete a feasibility study for Ak-Sug and Kingash in 2014 and begin construction at both deposits. Intergeo has invested more than $200 million in its portfolio of assets since 2007, the company said in the prospectus for its IPO.
Intergeo, prior to a deal with commodities trader Gunvor, controlled coal company Kolmar, which mined 1.3 million tonnes of coking and fat coal.
Prokhorov owns 98.9% of Intergeo, and Finsky owns 1.1%, with an option to acquire about 18% of shares by February 2015.