Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries – “Polymetal”, the “Company”, or the “Group”) notes the transaction announced today by PJSC Polyus (“Polyus”).
In December 2015, Polymetal entered into a joint venture with Polyus for the development of the Nezhdaninskoye gold property (“Nezhda”). Polymetal currently owns an 18% stake in Nezhda and has the right to earn in up to a total of 50% through investing an additional US$ 69 million over the next four years by entering into Stage 2 of the joint venture arrangement which was scheduled for April 2017.
Polymetal notes the announcement today by Polyus that they have signed an agreement to sell their entire 82% stake in Nezhda to a company beneficially controlled by Mr. Ivan Kulakov, a former managing director of Highland Gold Mining. As a result, Mr. Kulakov has become the counterparty to the joint venture, replacing Polyus, while the key terms of the joint venture operation and the earn-in mechanism for Polymetal remain unchanged. Polymetal retains an 18% stake in the project and continues to be in charge of operational activities at Nezhda.
In light of the ownership change, the parties have agreed that Polymetal’s option to enter into Stage 2 will be extended for a further three months, until July 2017. Polymetal has also initiated discussions with Mr. Kulakov with regards to the joint development of Nezhda. In the meantime, Polymetal will continue exploration and technical works at Nezhda in accordance with the project schedule.
“We welcome Mr. Kulakov as our new joint venture partner for Nezhda, and we continue to view our investment in this asset as a potential valuable addition to Polymetal’s longer-term growth pipeline”, said Vitaly Nesis, Group CEO of Polymetal.
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