29 Dec 2009 12:13

KazakhGold postpones share placement for technical reasons

MOSCOW. Dec 29 (Interfax) - KazakhGold has postponed a supplementary share and Global Depositary Receipts (GDR) placement as part of a deal with Russia's Polyus Gold for technical reasons, the Kazakh gold miner said in a statement.

The placement has been postponed "in order to allow more time for KazakhGold to investigate further certain Kazakh regulatory issues in connection with the placing," the statement said.

"As stated in the Partial Offer Document issued in connection with the acquisition by Jenington International Inc, an indirect wholly-owned subsidiary of OJSC Polyus Gold, of 50.1% per cent of the ordinary share capital of KazakhGold, KazakhGold expects to raise approximately $100 million by way of the placing. In connection with the Partial Offer, Jenington, KazakhGold's direct controlling shareholder, agreed, as part of the transaction, to underwrite the placing. KazakhGold currently expects that it will be able to complete the placing in the first quarter of 2010," it said.

Polyus Gold bought 50.1% of KazakhGold in August, paying with cash and shares. KazakhGold shareholders received $7.18 per share and 0.064% of Polyus shares. Following the closure of the deal, KazakhGold planned to issue $100 million in new shares at $1.5 a share, at least half of which will be subscribed by Polyus Gold and the rest by other major shareholders in KazakhGold. The placement of the shares and GDRs had been expected by the end of 2009.

KazakhGold's main assets, the Aksu, Bestobe and Zholymbet fields in northern Kazakhstan, hold around 60 million oz of gold and produced more than 300,000 oz in the last two years. The Aksu field is served by two recovery plants and a leaching pad, Bestobe by one of each and Zolymbet by one recovery plant. All three operations are being expanded to process tailings (up to 2 million tonnes of ore each). KazakhGold also has assets in eastern Kazakhstan, Romania and Kyrgyzstan. Its overall reserves are 59.6 million oz and resources (to JORC) are 34.5 million oz.