14 Aug 2009 13:50

Polyus Gold closes offer for purchase of KazakhGold shares, will pay by Aug 27

MOSCOW. Aug 14 (Interfax) - Polyus Gold , Russia's leading gold producer, has finalized an offer for the buyout of KazakhGold shareholders and plans to pay for the shares by August 27, the company said in a statement.

The partial offer is closed and hereby declared unconditional in all respects, the statement says. Settlements with KazakhGold shareholders who have validly accepted the partial offer will be made by August 27, 2009, it says.

Polyus subsidiary Jennington, which is officially buying back the shares, has received valid acceptances in respect to a total of 51,021,452 KazakhGold Shares, which represents approximately 96.37% per cent of KazakhGold's existing charter capital, including acceptances for the sale of a 41.82% stake that is currently controlled by KazakhGold's main shareholder, Gold Lion Holdings.

Polyus Gold had planned to buy a 50.1% stake in the Kazakh company. Since the number of acceptances exceeded this threshold, the acceptances will be reduced proportionately and the overall number of shares bought out by Polyus will not exceed 50.1%.

Polyus Gold will pay $7.18 and 0.064 Polyus shares for each share in KazakhGold. Under the terms of the partial offer, KazakhGold shareholders will be entitled to receive one share in KazakhGold for 0.423 Polyus Gold consideration shares (5.9% of the Russian company). By accepting the terms of the partial offer, KazakhGold shareholders will instruct Jenington to arrange for the transfer of 84.86% of the Polyus Gold consideration shares for repurchase by Jenington for cash at a price of $20 per Polyus Gold consideration share. The KazakhGold shareholders will thus hold 0.9% of Polyus Gold's shares.

Upon completion of the partial offer, KazakhGold will issue $100 million worth of new shares for $1.5 per share, and Polyus Gold will subscribe to at least 50.1% of the share issue. KazakhGold intends to invite major KazakhGold shareholders to buy the remainder of these shares. It is thought the shares will be issued in September-October 2009.

KazakhGold is the parent company of the Kazakhstan-based KazakhAltyn, which produced 7.4 tonnes of gold in 2007. Its 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. Polyus Gold is paying $13 per oz for KazakhGold's resources.