Proposed Disposal

RNS Number : 1974T

Ovoca Gold PLC

11 December 2012

 

Ovoca Gold plc ("Ovoca" or the "Company")

Disposal of Olcha Gold-Silver deposit ("Olcha")

Ovoca is pleased to announce that it has entered into a conditional legal agreement to sell its 100% interest in its subsidiary Olymp Limited, which holds a mining and exploration license for the  Olcha gold-silver deposit, to a subsidiary of Polymetal International plc ("Polymetal") (the "Proposed Disposal"). The consideration payable under the Proposed Disposal comprises 775,000 Polymetal ordinary shares which, as of the close of business on 10 December 2012, gives a total consideration value of approximately £8.4 million (US$13.5 million).

Olcha is an epithermal gold-silver deposit that covers 2.5 square kilometres on Ovoca's Rassoshinskaya licence in the north eastern part of the Magadan Region about 200 kilometres from the town of Seimchan.

Polymetal is a leading gold and silver mining group operating in Russia and Kazakhstan whose ordinary shares are listed on the London Stock Exchange and is a member of the FTSE 100.  Olcha is located approximately 215 km from the Lunnoye processing plant and 230 kilometers from the Kubaka processing plant, which belong to Polymetal's Dukat and Omolon processing hubs respectively.

Following completion of the Proposed Disposal, Ovoca will continue to develop its projects - Rassoshinskaya and Stakhanovsky. It is the Board's current intention to retain the Polymetal common shares as a medium term investment.

The Proposed Disposal constitutes a transaction which is classified as a fundamental change of business under the AIM Rules and the ESM Rules. The Board for this reason is required to issue a circular setting out the reasons for the Proposed Disposal and to seek Shareholder approval to the Proposed Disposal at an extraordinary general meeting ("EGM").  It is expected that the circular will shortly be posted to shareholders and that the EGM will occur in mid-January 2013.

Kirill Golovanov, Ovoca's CEO, commented "We are pleased to have agreed this transaction with Polymetal which allows value to be realized from the Olcha deposit for Ovoca shareholders. We remain focused on developing our business, in particular bringing our Stakhanovsky project into production. Following completion, our cash and investments will be approximately US$48 million."

Contacts:

Ovoca Gold Plc

Kirill Golovanov [phone]

Davy - NOMAD, ESM Adviser and Joint Broker

John Frain/Daragh O'Reilly [phone]

Fairfax I.S. PLC - Joint Broker

Ewan Leggat/Laura Littley [phone]

 

END

 

 

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