Rus News Journal

“ Polymetal “ has reached Kazakhstan

the company buys zolotomednoe a deposit Varvarinsky

One of the manufacturers of precious metals largest in Russia - “ Polymetal “ - increases the zolotorudnuju base. The company buys in Kazakhstan a gold deposit and copper Varvarinsky at Orsu Metals. The Total cost of the transaction is estimated approximately in 235 million dollars, however the most part of payments is necessary for 2013-2014. According to the analysts, the new active will allow “ to Polymetal “ next year to increase gold mining by 15-20 %.

the Gold deposit and copper Varvarinsky is in 10 km from border with Russia, near to the city of Kostanaj. Its resources are estimated in 3,103 million ounces of gold and 142 thousand t copper. Gold mining on a deposit has begun in December, 2007, and zolotomednogo a concentrate - in March, 2008. In the first quarter 2009 on Varvarinsky it has been made 13,6 thousand Ounces of gold and 1743 t copper in a concentrate.

“ polymetal “ yesterday has informed on the contract conclusion on acquisition at Orsu Metals Corporation 100 % of a share in Varvarinsky zolotomednom a deposit. Company Three K Exploration purchase and Mining Limited (ThreeK owns the licence for deposit development) will manage “ to Polymetal “ in 20 million dollars thus the Russian company will pay 8 million dollars at once on termination of the transaction, and 12 million dollars more (percent) will pay plus by instalments.

together with the rights to a deposit “ Polymetal “ will incur debt and hedge obligations Orsu on Varvarinsky that This sum will increase a total cost of the transaction almost to 235 million dollars, in particular, includes obligations on payment ­ of a debt at the rate about 73 million dollars and forward contracts on delivery of gold at a rate of 338,4 thousand ounces at the price of 574,25 dollars for ounce. “ to polymetal “ It was possible to co-ordinate re-structuring of these payments in such a manner that definitive execution of obligations will occur in 2013 (35 % from total amount) and in 2014 (65 %).

In the message “ Polymetal “ it is said that creditors have agreed on re-structuring of existing obligations on hedge for granting Varvarinsky possibility to receive additional benefit in case of the future growth of the price for gold. As has noted during telephone conference the general director “ Polymetal “ Vitaly Nesis, payments under hedge contracts will be translated in promissory notes. However, these concessions nedeshevo were gave: “ Polymetal “ will give to creditors a guarantee for the sum of 90 million dollars

it is necessary to notice that the previous owners already invested in development Varvarinsky, including in building of concentrating factory, 240 million dollars In spite of the fact that the project started in 2007, till now manufacture did not leave on the planned level, and new owners should enclose much in deposit development. By words g - on Nesisa, the company plans ­ to finish the extraction cost price on a deposit to 400-450 dollars for ounce of a gold equivalent.

according to experts, the transaction on purchase Varvarinsky is enough risky, but potentially favourable for “ Polymetal “. “ the Price in 235 million dollars looks fair, after all all is already constructed and ready for operation. Besides, actually “ Polymetal “ buys an active on an instalment plan “ - analyst UniΡredit Securities of Marat Gabitov marks. However he specifies that at the beginning this active can negatively affect the company reporting as Varvarinsky while is unprofitable.