Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
Russian diamond producer Alrosa has bought a gold deposit in Russia’s Far East from miner Polyus, the two companies, both under Western sanctions, said on Monday.
For Alrosa, the world’s biggest diamond producer, the move marks a deeper push into gold which it said would fit with the rest of its business and strengthen it financially while not significantly changing its strategy.
“The development of the gold deposit will provide an additional synergistic effect for Alrosa’s business and will help increase its financial stability in the long term,” Alrosa boss Pavel Marinychev said in a statement.
Alrosa plans to invest 24 billion roubles ($276 million) initially to develop the Degdekan deposit, it said, and estimated annual gold production at full capacity from 2030 of 3.3 tons.
Alrosa has mined gold as a sideline to its diamond business for years and the unit which is buying the licence is currently producing about 180 kg of gold a year.
Polyus said it was selling the Degdekan deposit in order to optimise its exploration portfolio as it prepares to begin development of the vast Sukhoi Log gold deposit in Siberia.
The two companies did not disclose the value of the deal. Akhmed Aliev, an analyst at Moscow-based investment company BKS, estimated the purchase price at $50-100 million, or up to a quarter of Alrosa’s free cashflow.
Once production is up and running, he estimated the boost to Alrosa’s EBITDA at about 10%, based on current gold prices.
Polyus had held the licence to develop Degdekan, in the Magadan region of Russia’s Far East, since 2005. Alrosa said it aims to develop the site until 2046.
“Alrosa’s strategy does not change in any way and continues to concentrate on the diamond business. At the same time, we always consider the possibility of participating in projects where we can use our competencies in mining,” a company representative told Reuters.
The attractiveness of the Degdekan deposit was partly based on its proximity to transport and energy infrastructure, the representative said.
For 2023, Alrosa reported net profit of 85.18 billion roubles ($925 million), down 15.2% from the previous year.
As part of sanctions against Russia over Moscow’s actions in Ukraine, Group of Seven leaders agreed in December to ban non-industrial diamonds from Russia by January, and Russian diamonds sold by third countries from March. The European Union added Alrosa to its sanctions list in January.
(By Anastasia Lyrchikova and Mark Trevelyan; Editing by David Holmes)
Comments