Russian banking major VTB Bank has announced the acquisition of a 40.6% stake in Veduga gold deposit in the Krasnoyarsk region for $71m.
The Cyprus-based mining company Polymetal International will retain 59.4% ownership in the asset and holds a call option to acquire VTB’s stake in the future.
The transaction is expected to streamline ownership structure and advance Veduga project development.
Comprising of four license plots that cover a total area of 18km2 , Veduga is a high-grade refractory gold deposit located in the prolific Northern Yenisey gold belt in the Krasnoyarsk Region, Russia.
VTB senior vice president and client coverage head Dmitry Snesar said: “VTB has a long-standing partnership with Polymetal, one of Russia’s leading mining companies.
“We are fully committed to developing an innovative financing and advisory offering which will allow Polymetal to advance its long-term strategy. We believe that this arrangement will enable the fast tracking of the Veduga development, which is beneficial for both shareholders and the region.”
Veduga will initially acquire a 25.7% stake in Amikan
Under the terms of the transaction, VTB will initially acquire a 25.7% stake in Amikan, the owner of Veduga gold project, for cash consideration of $36m.
VTB would further invest $35m in cash in exchange for newly issued Amikan shares, acquiring a 40.6% stake in the asset.
The transaction is expected to complete before the end of April 2020, but in any event no later than October 2020.
Following the closing of the transaction, Polymetal will maintain full operational control over the asset.
Polymetal Group CEO Vitaly Nesis said: “This deal hands Polymetal full operational control of the asset and unlocks further project development.
“The creative transaction structure allows us to benefit from the financial strength of VTB without straining our own balance sheet. Crucially, Polymetal now has a clear path to 100% ownership.”
