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Polymetal lifts stake in Russia silver mine for $72m
Polymetal International on Monday said it had agreed to increase its stake in the Russian Prognoz silver property to 50% from 5% for $72m to be paid in Polymetal shares.
Prognoz is the largest undeveloped primary silver deposit in Eurasia with an estimated of 292m ounces of silver at 586 grammes per tonne.
Currently, Polymetal holds an indirect stake in Prognoz, and is buying the additional 45% from Polar Acquisition. The other 50% of Prognoz is owned by Garden Ring Capital, a Russian private equity group.
Polymetal said it would also pay Polar a net smelter return royalty of between 2-4%, which will be dependent on the mineral extraction tax rate at the time when the asset enters commercial production.
The transaction is expected to close in Q1 2018, subject to receipt of the required regulatory approvals.
The value of the Prognoz gross assets subject to the transaction (on a 100% share basis) is $43m, with an attributable reported pre-tax loss of $1.4m based on 2017 unaudited financial accounts, Polymetal said.