Polymetal sells Veduga to Polygon Gold

RNS Number : 2511D

Polymetal International PLC

14 May 2012

 



Release time	IMMEDIATE
Date	14 May 2012

Polymetal International plc

Polymetal sells Veduga to Polygon Gold - the new JV to develop the asset

Polymetal International plc (LSE: POLY) (together with its subsidiaries - "Polymetal") announces that it has sold 100% of Amikan Holding Limited, which owns the Veduga gold deposit ("Veduga") in the Krasnoyarsk region of the Russian Federation, to Polygon Gold Inc. ("Polygon"), a private company incorporated in the Province of British Columbia, Canada.

Polymetal received consideration of US$20 million in cash and 750 ordinary shares of Polygon resulting in an 81.8% equity ownership in Polygon (the "Transaction").

Polygon was founded by Leonard Homeniuk, a gold mining executive with more than 35 years of industry experience and currently an independent non-executive director of Polymetal, to develop Veduga into a producing mine. Mr. Homeniuk serves as Polygon's Executive Chairman and CEO.

Polygon will operate as a standalone company with independent management, while Polymetal plans to provide certain technical and regulatory assistance to Polygon on an ongoing basis. Over time Polymetal may dilute its equity stake in Polygon if external equity financing is raised.

Veduga has estimated NI 43-101 compliant open-pit reserves of 1.05 Moz of gold contained in 5.9 Mt at 5.5 g/t and M&I resources (inclusive of reserves) of 2.04 Moz of gold contained in 11.8 Mt at 5.4 g/t. The asset was part of the joint venture between AngloGold Ashanti and Polymetal from 2007 to 2012.

In accordance with Listing Rule 11.1.10R (2)(b), an independent adviser (HSBC Bank plc) provided confirmation that the terms of the Transaction (being a related party transaction for the Company) are fair and reasonable as far as the shareholders of Polymetal are concerned. The Transaction was also approved by Polymetal's Board of Directors.

"I am very pleased that Veduga, a non-core asset for Polymetal, has found a competent owner who is prepared to take this asset into production," said Vitaly Nesis, CEO of Polymetal.

"We believe this transaction allows Polymetal, through its more than 80% stake in Polygon, to benefit from the development of this high-quality asset while preserving management's focus on the Company's existing project pipeline".

Enquiries

Media		Investor Relations
College Hill Leonid Fink Tony Friend	[phone]	Polymetal Pavel Danilin Maxim Nazimok	[phone]
Joint Corporate Brokers
Morgan Stanley Edward Knight Sandip Patodia	[phone]	Canaccord Genuity John Prior Roger Lambert	[phone]

FORWARD-LOOKING STATEMENTS

THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS".  THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS.  THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS.  BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.  SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE.  THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED

 

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