March 3, 2010 · Posted in
News
Inthe junior gold mining business, the hope is eternal. So naturally, hedid, when GV Gold, Irkutsk-based junior gold miner controlled by SergeiDokuchayev entered beauty contests miners recently in Moscow to announcea new share issue. Maxim Gorlachev, head of business development, saidmetals Adam Smith Institute conference in Moscow that the target companyis U.S. $ 300 million. The money will beused to raise the volume of gold produced from the current 111,000 troyounces per year, up to four times that amount to 438,000 ounces over thenext four years. As for the probability of an IPO, speculation is thatthe shares could be listed and sold in Hong Kong, London, Moscow orToronto. But nothing has been confirmed.
Asked to confirm that GV Gold is planning, the company said aspokesman Minesite: “While the investment, if completed, will bedifferent than in 2007. The company has grown. It became a holdingcompany with two mining assets, to Irkutsk and Yakutia. “GV Gold isnamed after what is still the active lead, Goleta Vysochaishy deposit inIrkutsk.
As to what the assessment GV Gold believes that the market should putits current and future prospects, the spokesman added: “The targetprice has not been finalized.” There is also the possibility that GVGold plans to sell itself to a gold medal Russian majors – SeverstalResources, owned by Alexei Mordashov, and Highland Gold, owned by RomanAbramovich, had been rumored as potential buyers. But if so, theapplication of prices is unknown.
The latest operating results, issued last year on February 19,indicate that this year, GV Gold hopes to increase gold production by 20per cent to 133,000 ounces, to enhance returns by filing an processingplant in third, adding several million ounces of gold resource base, andintroduce two new fields into operation – the Bolshoi Kuranaks in theregion of Sakha in the Far East, and Chudnoye in the north-west of Komi.Financially, GV Gold last published financial statements for the yearending in 2008, showed net earnings of Rb1.1 billion (currentlyequivalent to U.S. $ 37 million).
The trend towards rapid growth in junior following the example beingset by the gold seekers Russian General Staff, according to a recentreport by the analyst or Troika Dialog, Mikhail Stiskin. “We maintainthat the domestic gold miners are well positioned to step earningsmomentum 2:09 remarkable results from a convergence of two factors:healthy margins and volume increases. As a historical perspective, it ‘is nothing more than a confluence, the impact of these developments onthe bottom line will be more pronounced. ”
Stiskin compares Russian gold mining companies with theirinternational peers – by comparing the results of last year, and plansfor the future. “There is an abundance of available credit lines andbackground are in a balloon,” reports Stiksin. “Miners senior and middleextend their operational reach not only in Russia but also within theCIS, Kazakhstan being the target. As and Polyus Gold Polymetal appetiteshave been largely satisfied, other minors, as Highland Gold Mining,Severstal Gold, Centerra Gold and Petropavlovsk (via a joint venturewith Leader) in May to pursue inorganic growth. Miners have beenenjoying strong (so far) the sense of optimism to sell new or the oldequity is to deleverage the balance sheet (SPO Polymetal) or allowcontrolling shareholders to cash SPO (Polyus Gold’s) . A number ofintermediate and junior producers (Severstal GV Gold and Gold) Mayconduct IPOs as well. ”
In production, GV Gold said that its 2008 production of just overfour million ounces of place in 8th place on the league table of goldproducers in Russia. In terms of reserves and resources, VysochaishyGoleta (literally, above “Loach [fish]“) deposit is estimated at 2.3million ounces held in the categories C1 and C2 of Russia, with 3.3million ounces as P1, P2 and P3 resources. The placer deposit of Sakharegion, known Bolshoi Kuranakh would have 2.4 million ounces of B, C1and C2 reserves and 2.8 million ounces of resources P1, while “thepotential forecast” permit area society of Love is 1.9 million ounces.During his appearance at the Adam Smith Institute conference, Gorlachevindicated that these gold resources added to 16.6 million ounces, givingthe company a value, he estimated, of at least U.S. $ 500 million.
This is less than the GV Gold said it was worth when she tried tosell shares in London three years ago, when GV Gold produced less gold,and had far fewer reserves and resources name.
In the context of previous efforts to diversify its shareholder base,Gorlachev confirmed that BlackRock had paid U.S. $ 16.7 million for 10percent of GV Gold in 2007, and holds 19.99 per cent today . The powerbehind GV Gold is Lanta Bank, which many trades production GV Gold. Aclosed joint stock company, Lanta is also a family business headed bySergei Dokuchayev and his two brothers Peter and Alexander and theirchildren. In 1998, when GV Gold was launched Lanta held 49 percentshares, while Lenzoloto, the association of gold production that thendominated the gold mines in the Irkutsk region, holding 51 percent. Overthe intervening years, Lenzoloto sold his shares, even if the veteranLenzoloto Vladimir Kochetkov, remains at GV Gold board of directors witha stake of 5.7 percent.
If GV Gold can hit a target price of 500 million dollars in a newtransaction in the coming months, BlackRock nicely. Investment banks,apparently eager to participate in this growth, have also circulated thestory that GV Gold is well positioned to win the support of technologyconglomerate Russian state, led by Sergei Chemezov, in an attempt totake the license to mine Sukhoi Log. With over 60 million ounces in goldreserves, Sukhoi Log is Russia’a largest gold deposit UN-mined, and oneof the largest in the world. It was once part of the mining areaLenzoloto in Irkutsk, and deposits GV Gold mining since 1998 are at theperiphery of the main license Sukhoi Log.
But there are many contenders for Sukhoi Log. And because the auctionis open may increase the license fee to $ 1 billion U.S., and becausecapital spending another U.S. $ 1 billion may be required, biddersRussia will require funding. This gives the advantage to the forefront,and Polyus Gold Polymetal. If the number of oligarchic influence, as itis required to do so, then Mordashov Severstal Resources Abramovich andHighland Gold also be candidates. Avoiding an open bidding by statedecree or guarantee the financing of the offer of a state bank, wouldallow a minor under the gold in the competition. It seems that thosetouting name GV Gold’s hope.
Source: Mine Site
Tags: Adam Smith Institute conference, gold miner, GV Gold, Hong Kong, junior gold mining business, London, Maxim Gorlachev, Moscow or Toronto, Sergei Dokuchayev