Almar still plans offering on SPB Exchange, despite sanctions
MOSCOW. Nov 23 (Interfax) - Almar Arctic Diamonds, a junior mining company that holds licenses to two diamond deposits in the Arctic region of Yakutia, still has plans for an initial public offering on the SPB Exchange , despite the fact that the exchange was included in the U.S. Specially Designated Nationals List (SDN List) at the beginning of November.
"We are continuing to follow the situation, fully focused on possible options for the company's further development, including on equity markets," Almar commercial director and board member Andrei Novikov told Interfax.
The board of directors of Almar, the largest shareholder of which is its chairman Lyudmila Nikolayeva, wife of Yakutia President Aisen Nikolayev, considered the company's readiness for an IPO in 2023 earlier this month, the company reported.
Novikov said the board discussed the changed situation around the SPB Exchange, a unique platform for offerings by junior mining companies, which are subject to certain listing and assessment requirements.
Almar wants to use the proceeds from a possible IPO to continue exploration at its licensed areas, build a mine and processing plant and start mining and selling diamonds.
Almar announced plans to raise 700 million rubles with an offering of 15% in new shares at the beginning of 2022.
Almar raised 200 million rubles in a private share placement in December 2021. Nikolayeva's stake decreased to 32.37% from 40%. The investors were ITI Capital, Derzhava Bank and IFC Solid.
The previous parameters of the offering and planned use of proceeds remain the same, but the valuation of the company is outdated, Novikov said.
"In the period since the pre-IPO the company has carried out its main plans - conducted exploration of the two properties and defended the diamond reserves at one of the deposits, for the first time in Russia discovering a diamond deposit with internal funds," Novikov said.
A concrete decision on possible transactions on capital markets has not been made yet, he said. Almar has fulfilled the main requirements of the junior segment of the SPB Exchange and has a few steps left to carry out before a share offering, Novikov said.
Russia's Central Bank registered a prospectus for Almar securities in September that proposes the issue of 21,805 shares, or 15% of increased charter capital. They may be placed on the SPB Exchange or on the over-the-counter market.
Almar values the C1 and C2 reserves and P1 and P2 forecast resources at its Khatystakh and Beenchime placers at more than $350 million, the company said at the beginning of 2023.
The company plans to mine up to 1 million carats per year starting in 2024, which will give it about a 0.5% share of the world diamond market. Almar plans to start selling diamonds in the fourth quarter of next year.
Almar estimates it needs investment of 3 billion rubles to start mining at its deposits, including 1 billion rubles for exploration and more than 2 billion rubles to set up and launch production and sales of rough diamonds.
The prospectus shows that Nikolayeva is Almar's largest intragroup credit, holding 22.2% of the company's debt. Almazergienbank and Alrosa subsidiary Almazy Anabara are also large creditors.
Other major shareholders of Almar besides Nikolayeva are three company executives - Pavel Andreyev, Serkhei Grakhanov and Roman Nogovitsyn, who own a combined 40.5% of shares. Izhevsk-based businessman Vitaly Russkikh, who lent Almar 215 million rubles this year, owns 5.44%.
Polarctic Management, a division of Polarctic Capital Group, the beneficiary of which is Andrei Novikov, owns 8.09%. ITI Natural Resources LLC, a division of ITI Capital, holds 6.67% and Derzhava Bank owns 4.77%.