30 Nov 2009 13:21

Polyus Gold management mulls reverse acquisition of KazakhGold

MOSCOW. Nov 30 (Interfax) - Management at Polyus Gold a reverse acquisition of the gold mining holding by its current subsidiary - KazakhGold, three sources close to the company and its shareholders told the Vedomosti newspaper.

KazakhGold is registered in Britain and its shares are traded at the London Stock Exchange. If the deal goes through and KazakhGold becomes the core company of the holding, it will be renamed Polyus Gold, one of the sources told Vedomosti.

The deal's configuration is still being worked out. It has not been discussed with the Federal Antimonopoly Service or minority shareholders yet.

A reveres acquisition is one option under consideration to bolster the company's share liquidity. Also, it would be more straightforward for a British company to use its own shares as acquisition currency and raise loans.

Polyus Gold bought 50.1% of KazakhGold in August this year.

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.