Barrick Gold Attracts Gold of Russia
Gold biggest producer, Barrick Gold of Canada, will consolidate Russia’s and CIS assets on the basis of Britain’s Highland Gold Mining (HGM), the parties announced in a joint news release yesterday. At the same time, Barrick will widen the share in HGM from today’s 20 percent to 34 percent and take it under operating control. The analysts blame these actions on errors of the current top managers of HGM.
According to the news release, the parties have entered into a preliminary agreement, whereby Barrick extends ownership in HGM up to 34 percent in exchange for transferring to it 50-percent shares in joint ventures. First of all, the deal covers Russia’s Taseevskoe, Malo-Fyodorovskoe and Lyubavinskoe deposits (Chita region), Sovinoe deposit (Chukotka) and Belaya Gora (Khabarovsk region).
Moreover, Barrick intends to transfer to HGM the 100-percent share in subsidiary Barrick Resources LLC, which holds licenses for two areas in Altai and Khabarovsk region, and 100 percent in Barrick Gold Kyrgyzstan LLP, the license holder for Unkurtash and Kassan deposits in Kyrgyzstan.
The deal is expected to be completed by the end of this year. So far, HGM has been producing gold only in Russia. H1 output reached 91,200 troy ounces, having lowered the net loss 36 fold to $0.2 million on skyrocketing gold prices. The sales were $53.8 million.
Barrick Gold is no newcomer in Russia. But most of previous attempts to acquire the assets here were abortive. Barrick, for instance, had eyed ALROSA’s three deposits in Yakutia, which went to Polus Zoloto in September of 2005. It is also said to have attempted to buy out Russia’s second gold miner, MNPO Polimetall, but Nafta-Moscow proved more successful in that undertaking.
www.kommersant.com
All the Article in Russian as of Nov. 03, 2006
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