Boyd, Roosen, Quartermain: It takes grit, invention, luck to make the big time
Mining industry legends discuss the backstories on their multibillion-dollar successes.
Russia’s largest gold miner Polyus Gold International is expected to go ahead with a share offering worth between $700 million – $1 billion in late April, Reuters reports citing sources “familiar with the matter.”
The stake sale is necessary if the company wants to proceed with a planned listing in London because it needs to increase its free float to 25%.
But inclusion in the prestigious FTSE-100 index – a boost to institutional demand for the stock – may be more difficult after the company announced last week that it won’t be moving its domicile to London, a requirement.
Polyus is 38%-owned by billionaire Mikhail Prokhorov (potash baron Suleiman Kerimov is also a major shareholder) who resigned as CEO last year to focus on a bid for the Russian presidency, an ultimately unsuccessful attempt (he got 8% of the vote).
Prokhorov’s political ambitions may have created problems for Polyus.
Prime minister and president-elect Vladimir Putin heads a government commission that has “sweeping authority over foreign investment in companies like Polyus Gold, whose gold reserves are considered strategic by the state,” Reuters reports.
Polyus already has Global Depository Receipts listed in the British capital and would follow fellow Russian miners Evraz and Polymetal International – already part of the FTSE-100 – to London.
Polyus GDRs jumped more than 4% on Friday on the news of the stake sale.
Prokhorov said last year that he wants to do a merger deal with a major miner post-listing – most likely Polymetal – which would then give Polyus a backdoor into the FTSE-100.
Other names that have been mentioned is Canadian group Kinross Gold which has operations in Russia, Australia’s Newcrest Mining and South Africa’s AngloGold Ashanti.
In a trading update released in January, Polyus announced a 8% increase in gold production to just under 1.5 million ounces which boosted earnings by 40% to $1.06 billion.
Polyus Gold is the number one gold producer in Russia and has a significant footprint in Kazakhstan.
Polyus commissioned a new mine Verninskoye in December which is expected to add materially to production and lift 2012 production to 1.6 million oz. 2011 was the fourth consecutive year of increased production for the company.
