In the junior gold mining business, the hope is eternal. So naturally, he did, when GV Gold, Irkutsk-based junior gold miner controlled by Sergei Dokuchayev entered beauty contests miners recently in Moscow to announce a new share issue. Maxim Gorlachev, head of business development, said metals Adam Smith Institute conference in Moscow that the target company is U.S. $ 300 million. The money will be used to raise the volume of gold produced from the current 111,000 troy ounces per year, up to four times that amount to 438,000 ounces over the next four years. As for the probability of an IPO, speculation is that the shares could be listed and sold in Hong Kong, London, Moscow or Toronto. But nothing has been confirmed.
Asked to confirm that GV Gold is planning, the company said a spokesman Minesite: “While the investment, if completed, will be different than in 2007. The company has grown. It became a holding company with two mining assets, to Irkutsk and Yakutia. “GV Gold is named after what is still the active lead, Goleta Vysochaishy deposit in Irkutsk.
As to what the assessment GV Gold believes that the market should put its current and future prospects, the spokesman added: “The target price has not been finalized.” There is also the possibility that GV Gold plans to sell itself to a gold medal Russian majors – Severstal Resources, owned by Alexei Mordashov, and Highland Gold, owned by Roman Abramovich, had been rumored as potential buyers. But if so, the application 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 20 per cent to 133,000 ounces, to enhance returns by filing an processing plant in third, adding several million ounces of gold resource base, and introduce two new fields into operation – the Bolshoi Kuranaks in the region of Sakha in the Far East, and Chudnoye in the north-west of Komi. Financially, GV Gold last published financial statements for the year ending in 2008, showed net earnings of Rb1.1 billion (currently equivalent to U.S. $ 37 million).
The trend towards rapid growth in junior following the example being set by the gold seekers Russian General Staff, according to a recent report by the analyst or Troika Dialog, Mikhail Stiskin. “We maintain that the domestic gold miners are well positioned to step earnings momentum 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 on the bottom line will be more pronounced. ”
Stiskin compares Russian gold mining companies with their international peers – by comparing the results of last year, and plans for the future. “There is an abundance of available credit lines and background are in a balloon,” reports Stiksin. “Miners senior and middle extend their operational reach not only in Russia but also within the CIS, Kazakhstan being the target. As and Polyus Gold Polymetal appetites have been largely satisfied, other minors, as Highland Gold Mining, Severstal Gold, Centerra Gold and Petropavlovsk (via a joint venture with Leader) in May to pursue inorganic growth. Miners have been enjoying strong (so far) the sense of optimism to sell new or the old equity is to deleverage the balance sheet (SPO Polymetal) or allow controlling shareholders to cash SPO (Polyus Gold’s) . A number of intermediate and junior producers (Severstal GV Gold and Gold) May conduct IPOs as well. ”
In production, GV Gold said that its 2008 production of just over four million ounces of place in 8th place on the league table of gold producers in Russia. In terms of reserves and resources, Vysochaishy Goleta (literally, above “Loach [fish]“) deposit is estimated at 2.3 million ounces held in the categories C1 and C2 of Russia, with 3.3 million ounces as P1, P2 and P3 resources. The placer deposit of Sakha region, known Bolshoi Kuranakh would have 2.4 million ounces of B, C1 and C2 reserves and 2.8 million ounces of resources P1, while “the potential forecast” permit area society of Love is 1.9 million ounces. During his appearance at the Adam Smith Institute conference, Gorlachev indicated that these gold resources added to 16.6 million ounces, giving the 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 to sell 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 10 percent of GV Gold in 2007, and holds 19.99 per cent today . The power behind GV Gold is Lanta Bank, which many trades production GV Gold. A closed joint stock company, Lanta is also a family business headed by Sergei Dokuchayev and his two brothers Peter and Alexander and their children. In 1998, when GV Gold was launched Lanta held 49 percent shares, while Lenzoloto, the association of gold production that then dominated the gold mines in the Irkutsk region, holding 51 percent. Over the intervening years, Lenzoloto sold his shares, even if the veteran Lenzoloto Vladimir Kochetkov, remains at GV Gold board of directors with a stake of 5.7 percent.
If GV Gold can hit a target price of 500 million dollars in a new transaction in the coming months, BlackRock nicely. Investment banks, apparently eager to participate in this growth, have also circulated the story that GV Gold is well positioned to win the support of technology conglomerate Russian state, led by Sergei Chemezov, in an attempt to take the license to mine Sukhoi Log. With over 60 million ounces in gold reserves, Sukhoi Log is Russia’a largest gold deposit UN-mined, and one of the largest in the world. It was once part of the mining area Lenzoloto in Irkutsk, and deposits GV Gold mining since 1998 are at the periphery of the main license Sukhoi Log.
But there are many contenders for Sukhoi Log. And because the auction is open may increase the license fee to $ 1 billion U.S., and because capital spending another U.S. $ 1 billion may be required, bidders Russia will require funding. This gives the advantage to the forefront, and Polyus Gold Polymetal. If the number of oligarchic influence, as it is required to do so, then Mordashov Severstal Resources Abramovich and Highland Gold also be candidates. Avoiding an open bidding by state decree or guarantee the financing of the offer of a state bank, would allow a minor under the gold in the competition. It seems that those touting name GV Gold’s hope.
Source: Mine Site
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