Trans-Siberian Gold mulls M&A, incl. abroad, but sees benefits of organic growth
MOSCOW. Nov 20 (Interfax) - Trans-Siberian Gold (TSG), which is developing the Asachinskoye deposit in Kamchatka Territory, is considering mergers and acquisitions, including in other regions and even other countries, the company's chief operating officer, Yevgeny Antonov said.
"We are, of course, looking for potential assets for acquisition, including through M&A, and not only in the region where we work, and not only in Russia. We're looking at foreign assets," Antonov said at the 2020 Russia and CIS Metals and Mining Summit organized by the Adam Smith Institute.
"It's not for nothing that our company is called Trans-Siberian Gold. We're interested in assets on both sides of the Ural Mountains," he said. As an example, he cited Mongolia, where TSG is interested in mining assets and has even studied two or three "in greater detail."
However, the company also sees the benefits of organic growth. "Now, when the price of gold beat all records until recently, the market is hot, we believe is just the time to invest in exploration, which is actually what we've been doing for the past two years," Antonov said.
"Our geological exploration program totals more than $10 million for 2020-2021 and we have already achieved substantial successes, results. In the past year, for example, we managed to achieve a twofold increase in reserves at the Asachinskoye deposit," Antonov said.
"In our view, when all assets are overvalued is just the time to invest in what's called organic growth, meaning get additional ounces that are in subsoils close to existing assets, because they can be acquired at the lowest price. We calculated that on average we spent about $14 per ounce of gold found in the ground," Antonov said.
"Of course, when acquiring an asset on the market through M&A, it's impossible to acquire at such a low price. And we plan to continue to actively engage in geological exploration at existing properties and also regional exploration on Kamchatka, which in our view has huge potential in terms of the discovery of new gold deposits," Antonov said.