Russia’s GV Gold May Hold IPO to Fund Mining Growth (Update1)
February 17, 2010, 10:07 AM EST
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By Ilya Khrennikov
Feb. 17 (Bloomberg) -- OAO GV Gold, a Russian mining company that twice canceled an initial public offer in 2007, said it may sell shares in Hong Kong, London, Moscow or Toronto this year to fund an expansion.
“An IPO is one of the options we are considering in order to fund growth,” Maxim Gorlachev, head of corporate development at the company, told reporters today at the Adam Smith CIS- Metals conference in Moscow. GV needs to invest about $300 million in four years to quadruple its output, he said.
GV has 16.6 million ounces of gold resources and has a value of at least $500 million, Gorlachev said. Bodaibo, Irkutsk region-based GV produced 111,000 ounces of gold last year and plans to develop more mines to boost output to 438,000 ounces in 2014, according its presentation at the conference.
The company is majority owned by its management, which includes Chairman Sergei Dokuchayev, who is also a co-owner of Russian lender ZAO Lanta Bank. New York-based Blackrock Inc., which paid $16.7 million for 10 percent of GV in 2007, has a 19.99 percent stake, the maximum it can hold in a company that isn’t publicly traded, Gorlachev said.
Russian companies may raise more than $20 billion selling shares in 2010 as they repair balance sheets and resume expansion after the deepest recession on record ends, Ruben Aganbegyan, president of Russian investment bank Renaissance Capital in Moscow, said in December. OAO Severstal, Russia’s largest steelmaker, is considering whether to sell shares of its gold mining unit, two people familiar with the situation said in December.
--Editors: Simon Casey, Tony Barrett
To contact the reporter on this story: Ilya Khrennikov in Moscow at +7-495-771-7747 or ikhrennikov@bloomberg.net