Precious metals producer Polymetal International (POLY.MM) has agreed to sell its Russian assets to a Siberian gold miner in a $3.69 billion deal that takes into account the debt of the Russian business, it said on Monday.
Polymetal has been seeking to sell its Russian assets, which were placed under U.S. sanctions in 2023 in response to Moscow sending troops into Ukraine in February 2022.
The company switched its domicile to Kazakhstan from Jersey last August and listed on the Central Asian nation's Astana International Exchange (AIX) as part of efforts to facilitate a sale.
The agreed deal involves Polymetal International selling its Russian business to Mangazeya Plus - part of businessman Sergey Yanchukov's Mangazeya Mining - for about $3.69 billion, of which $2.21 billion is the Russian operation's net debt, Polymetal International said.
Mangazeya mining largely operates in eastern Siberia and has been operating since 2011. It produced 466,00 ounces of gold last year, its website says, compared with Polymetal’s 1.23 million gold equivalent ounces in Russia.
The agreed amount includes cash of $1.48 billion, $1.43 billion of which is in dividends from the Russian business, to be paid prior to the sale's completion.
An additional $50 million will be paid to the company on completion, the statement said.
Polymetal International, which will remain Kazakhstan's second-largest gold producer after the transaction, said it intends to use $1.15 billion of the dividends received to repay intra-group debt.
All payments will be made in Russian roubles through non-sanctioned financial institutions. The deal requires shareholder approval.
Yanchukov said the business would continue operating as usual and that the management team, led by CEO Sergey Cherkashin, would be maintained.
Polymetal expects to retain $300 million in post-tax proceeds from the deal, part of which it intends to spend on developing the Ertis POX project in Kazakhstan, it said.
