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Gold mining giant formed in Russia
An independent gold mining company, Polyus Gold, will be founded today. The new company, which is a spin-off from Norilsk Nickel, Russia’s largest producer of precious and non-ferrous metals, will be the world’s largest gold miner.
Polyus Gold shareholders are gathering for a founding meeting today. The agenda includes election of the General Director, members of the Board of Directors and the Revision Commission, appointment of the auditor, and approval of the company’s Articles of Association and regulations on general shareholders’ meetings and the Board of Directors.
Among candidates for the Polyus Gold Board of Directors are Yevgeny Ivanov, President of the Polyus gold mining company; Andrei Klishas, CEO of Interros Group; Denis Morozov, Deputy General Director of Norilsk Nickel; Mikhail Prokhorov, General Director of Norilsk Nickel; Valery Rudakov, Chairman of the Board of Directors of Polyus company; Ekaterina Salnikova, Director for Corporate Governance of Interros; and independent directors Lord Gillford, Rodney Behrens and Valery Braiko, Chairman of the Union of Gold Miners of Russia.
Polyus Gold shares will be allocated among Norilsk Nickel shareholders registered as of January 1, 2006. Norilsk Nickel shares will be swapped for Polyus Gold shares at a one-to-one ratio.
Since January 1, the price of Norilsk Nickel shares has not included the value of the spun-off assets. The stock of the new gold mining companies will be available to investors after the report on the share issue is registered with the Federal Financial Markets Service later this month. Norilsk Nickel shareholders hope that Polyus Gold shares will be listed on Russian stock exchanges, after which the company will issue its ADRs.
Reports came in yesterday that Polyus, the gold mining unit that is to be spun off from Norilsk, had sold a 20-percent stake in South African Gold Fields Ltd., the fourth largest producer of gold in the world, for more than $2 billion. It is unclear how the company will spend the money but most analysts think it will make a large acquisition. Among potential targets experts name Canada’s Centerra Gold, Kinross and Bema Gold, and Britain’s Peter Hambro Mining. Though this is pure speculation.
Norilsk Nickel purchased a 20-percent stake in Gold Fields in 2004 for $1.2 billion. Norilsk Nickel managers planned to increase its stake in Gold Fields and add it to Polyus, but Gold Fields was against this scheme. In the end, Polyus lost hope of increasing its holding in the South-African producer and sold the stake.
Polyus operates in the Krasnoyarsk and Irkutsk regions. It has 113 gold deposits in the Krasnoyarsk, Irkutsk, Magadan and Amur regions and in Yakutia. In 2005 Polyus produced 33.5 tons (1.076 million ounces) of gold. Its reserves were estimated at 18.9 million ounces as of April 1, 2005.
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