Petropavlovsk buys Amur Zoloto

29 Apr 2016
Petropavlovsk PLC reached an agreement with Alliance Mining Group and Lexor Group SA of Musa Bazhaev on the acquisition of gold mining company Amur Zoloto with the assets in the Khabarovsk Krai in the Russian Far East. The transaction amount will be $ 144 mln, in which Petropavlovsk PLC will make an additional issue, which will be about 30.3% of the new number of shares of the Company. Petropavlovsk also is going to consolidate net debt of Amur Zoloto in the amount of $ 16 mln.
The Company noted that the acquisition of Amur Zoloto will allow it to significantly expand the resource base in the Far East. Amur Zoloto has the reserves of 1.55 million ounces of non-refractory ores and resources (including reserves) in the amount of 2.16 million ounces as of 31/12/2015 in accordance with the JORC.The average metal concentration in the ore at processing plants accounts for 6.49 g/t, by heap leaching - 1.1 g/t. According to the plans the production of Amur Zoloto is expected to grow from 70 thousand up to 100 thousand ounces between 2017 and 2020 at a cost of $ 640 per ounce of gold. At the present time Amur Zolotohas a processing factory Yubileinoye with capacity of 100 thousand tons per year, which is expected to double by 2019.