25 Apr 2022 16:44

Polymetal mulling Russia-Kazakhstan asset split could announce details by July

MOSCOW. April 25 (Interfax) - Polymetal's board of directors and management continue to look at the possibility of splitting its assets in Russia and Kazakhstan and are discussing this with consultants, Vitaly Nesis, the Russian gold and silver miner's chief, said on a conference call.

The FT quoted sources as saying on in March that Polymetal was thinking of splitting its Russian- and Kazakhstan-based assets, each with its own listing. Polymetal said in response that it was "evaluating various options that could maximize shareholder value." "Such options, among others, include potential modification of asset holding structure which would ensure distinct ownership in various jurisdictions in which the company operates," the company said.

"We continue to believe that splitting the holding structure for assets in Russia and assets in Kazakhstan is likely to create considerable value for shareholders. Even so, the transaction's structure has not been finalized," Nesis said.

The earliest Polymetal will be able to complete the deal is after it releases its H1 financial results, but a roadmap could be unveiled by July, he said.

Polymetal has started to disclose production and cash costs guidance broken down by jurisdiction, in other words separately for assets in Russia and Kazakhstan. It said it had raised its total cash cost guidance for the group to $850-$950 per ounce, including $950-$1,050 in Russia and $700-$800 in Kazakhstan. All-in sustaining costs guidance rose to $1,200-$1,300 per ounce, including $1,350-$1,450 in Russia and $900-$1,000 in Kazakhstan.

Group production guidance for 2022 is still 1.7 million gold equivalent ounces, including 1.2 million in Russia and 0.5 million in Kazakhstan.

The latest capex guidance is $650 million, including $580 million in Russia and $70 million in Kazakhstan.

The largest shareholders of Polymetal are the ICT Group of Alexander Nesis and partners with about 24% and BlackRock funds with about 10%.

Polymetal is Russia's largest silver producer and a leading gold miner. The holding's operations are located in the Magadan and Sverdlovsk Regions, Khabarovsk Territory, Yakutia, Chukotka and Kazakhstan.