Polymetal International announced that it has reached a $3.69bn deal to sell its Russian assets to a Siberian gold miner. It comes as Polymetal seeks to dispose of its Russian assets in February 2022 after facing US sanctions in 2023 over Moscow's military actions in Ukraine.
In August 2023, Polymetal moved its headquarters from Jersey to Kazakhstan and was listed on the Astana International Exchange (AIX) to try to facilitate the sale.
The agreement provides for Polymetal International to sell its Russian operations to Mangazeya Plus, part of Mangazeya Mining, the company of businessman Sergey Yanchukov, for approximately $3.69bn, of which $2.21bn represents the net debt of the Russian operations.
Mangazeya Mining has operated mainly in eastern Siberia since 2011 and produced 466,000 ounces of gold last year, compared to Polymetal's production of 1.23 million gold equivalent ounces in Russia. The agreed amount consists of $1.48bn in cash, of which $1.43bn is dividends from Russian business. A further $50 million will be paid upon completion of the deal.
Polymetal International, which will remain Kazakhstan's second-largest gold producer after the transaction, plans to use $1.15bn of dividends received to settle intra-group debts. All payments after shareholders' approval will be made in Russian roubles through financial institutions not subject to sanctions.
Mr Yanchukov confirmed that the company will continue its normal operations with the retention of the current management team led by CEO Sergey Cherkashin. Polymetal plans to spend part of the $300 million post-tax proceeds from the deal to develop the Ertis POX project in Kazakhstan.
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