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Endeavour Mining plc T.EDV

Alternate Symbol(s):  EDVMF

Endeavour Mining plc is a United Kingdom-based multi-asset gold producer focused in West Africa. The Company has five operating assets consisting of the Hounde and Mana mines in Burkina Faso, the Ity and Lafigue mines in Cote d’Ivoire, and the Sabodala-Massawa mine in Senegal, two greenfield development projects (Assafou and Kalana) in Cote d’Ivoire and Mali and a portfolio of exploration assets on the highly prospective Birimian Greenstone Belt across Burkina Faso, Cote d’Ivoire, Senegal, and Guinea. The Hounde mine is located in the northern part of the highly prospective Hounde Greenstone Belt, approximately 60 kilometers (km) south of the Mana mine. The Ity mine is located in western Cote d'Ivoire, 480 km west-northwest from Abidjan, in the prefecture of Zouan-Hounien. The Mana Mine is located approximately 200 kms west of Ouagadougou, the capital of Burkina Faso. The Sabodala-Massawa Mine is approximately 640 kms southeast of Dakar, the capital of Senegal.


TSX:EDV - Post by User

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Post by scissors14on Sep 21, 2010 1:34pm
331 Views
Post# 17474739

Severstal plans London gold listing

Severstal plans London gold listing

Severstal plans London gold listing

By William MacNamara, Neil Hume and Anousha Sakoui in London and Catherine Belton in Moscow

Published: September 21 2010 17:01 | Last updated: September 21 2010 17:01

Severstal, the Russian steel company, is preparing to list its gold division in London this year in a deal expected to value the business at around $4bn, several people close to the company have confirmed.

Aggressively paced acquisitions of three Canadian gold miners in the past three years has given the Moscow-based steelmaker a portfolio of gold assets focused on west Africa and Russia.

Severstal plans to retain a stake of 65-70 per cent in the new company. This would create another London-listed precious metals miner in the mould of Fresnillo and African Barrick Gold, blue-chip London miners which are majority-owned by parent companies in Mexico and Canada, respectively.

Nomura analysts this week valued Severstal’s gold division at $3.6bn. One banker involved in the transaction said the valuation was likely to hit $4bn or possibly $5bn as details about the assets and the company’s growth programme were disclosed to the market.

In 2009 the gold division, part of a mining unit called Severstal Resources, sold 516,000 ounces of gold for $512m, according to company reports. This made it the most profitable of Severstal’s mining businesses – which include iron ore and coal operations – last year. It achieved a profit margin of 45 per cent as measured by earnings before interest taxation depreciation and amortisation.

Severstal’s group revenues last year were $13bn.

The company expects gold production to exceed 1m ounces by 2013, as projects in Burkina Faso, Guinea and Kazakhstan add to the group’s current working mines in Russia. “The growth will come from west Africa,” said one person involved in the deal.

Randgold, another London gold miner, is heavily invested in west Africa and African Barrick is hunting for potential acquisitions there.

In a recent production update, Severstal said it expected to produce between 640,000 and 670,000 ounces of gold this year. This would place Severstal Gold roughly on par with Petropavlovsk, the London-listed Russian gold miner, in production terms.

“London was the natural place to list,” said a banker, noting the City’s comfort with Russian and African gold assets.

Severstal – majority owned by Alexei Mordashov, a close ally of Vladimir Putin, Russia’s prime minister – has capitalised on surging gold prices in recent years. It moved into the market in 2007 with a high-profile takeover of Celtic Resources, which owned gold in Kazakhstan and a copper-gold deposit in Russia. Its gradual takeovers of Canada’s Crew Gold and High River Gold gave it mines in Guinea and Burkina Faso.

Following the Crew Gold deal, Severstal became Russia’s second-largest gold miner, behind Polyus Gold.

The company’s gold operations have buffered the group as it faced losses at its core global steel operations. Severstal notched up net losses of $593m in the first half of 2010 mainly due to a $1bn net loss at Lucchini, its European steel arm, which it is now trying to sell.

At least 25 per cent of the gold business will be sold through the flotation, said people close to the company.

Morgan Stanley is the sole sponsor of the planned initial public offering. Credit Suisse is joint global coordinator with Morgan Stanley. These banks and Russia-based Troika Dialog are the joint bookrunners.

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