Inclusion of GPB in sanctions list will complicate Petropavlovsk gold sales, servicing of debts

MOSCOW. March 25 (Interfax) - The sanctioning of Gazprombank , which includes freezing of assets, will make it difficult for Petropavlovsk to sell gold and service its debt, the gold miner said in a statement.

Petropavlovsk and Gazprombank have close commercial and financial ties, including a $200 million loan to Petropavlovsk and approximately $86.7 million in credit lines to its Russian subsidiaries. Under the terms of these commitments, Gazprombank buys 100% of the gold produced by Petropavlovsk.

Inclusion of Gazprombank in the sanctions list prohibits Petropavlovsk from selling gold to this bank, "and restrictions on the purchase and sale of gold in Russia may make it difficult to find an alternative buyer," the company said.

Petropavlovsk also notes that it is due to pay interest on a $560,000 loan from Gazprombank on Friday, but cannot do so because of sanctions rules.

The company, together with its consultants, is now urgently assessing the consequences of Gazprombank's inclusion in the sanctions list, Petropavlovsk said.