Новости проекта «Селигдар»

Создание золотодобывающего холдинга

Август, 2009 г.

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CONTENTS

TRENDS OF THE INTERNATIONAL GOLD MARKET .……………………………. 3

NEWS OF THE RUSSIAN COMPANIES…………….…………………………………4

TRANSACTIONS ON THE GOLD MARKET…………………………………………..10

SELIGDAR HOLDING NEWS…………………………………..………….……… … 11

SELIGDAR HOLDING – CORPORATE ACTIONS..………………………………….13

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ГЛАВНОЕ НА РЫНКЕ

August proved to be an extremely quiet month for the stock market, and consequently for the precious metal market. IN the beginning of the month, bear trend was established on the stock market and investors were actively buying precious metals as reliable hedge. Besides that, decrease of oil prices was expected after expiration of September futures, adding to the interest towards hedging assets. However, the “miracle” did not happen – by the date of expiration of the oil futures (August 15 for Brent and August 17 for WTI) the oil prices rocketed to the 10-monthly maxima, which naturally attracted investors and caused extensive sales on the market of gold and other precious metals. However, no active movements occurred, and in contrast to world market, the gold price on the Russian market increased as a consequence of strengthening of dollar compared to ruble.
Technically, gold is still traded in the range of $930-960/ounce with the strong upwards support channel at the level of $930/ounce, wherefore the experts do not expect correction below this level in the upcoming weeks.
Several important events for the gold market are expected within a few next weeks: first of all, it is the anticipated recovery of the markets and end or recession. The risks are gradually decreasing, which is on one hand favorable for the American currency, and on the other hand creating pressure against gold market, driving sales of the hedging metal. Another important aspect is the ending of the market support program earlier announced by the US authorities in order to support liquidity of the financial system. Removal of the cheap state money from the system will create significant shortage of liquidity, which can provoke growth of prices for assets, including precious metals. We expect preservation of a moderate upward trend in the gold prices during the next month, not excluding rising to the upper level of the corridor at $960/ounce. Increasing trend is also preserved on the platinum and silver markets, with no visible causes to change it in the near future. / Gold prices at LME (June 2009-Aug. 2009)

Silver prices at LME (June 2009-Aug. 2009)

Platinum prices at LME (June 2009-Aug. 2009)

RF Central Bank book prices for refined precious metals for the period of 01-24/08/ 09 (руб./ г)
Дата / Au / Ag / Pt / Pl
01.08.2009 / 938.00 / 13.42 / 1187.9 / 258.41
08.08.2009 / 974.20 / 14.88 / 1254.6 / 273.85
15.08.2009 / 976.56 / 15.37 / 1296.3 / 281.49
22.08.2009 / 966.95 / 14.42 / 1265.3 / 279.35
3.1% / 7.5% / 6.5% / 8.1%
NEWS OF THE COMPANIES
Highland Gold has increased gold output by 14% in the first half of the year
As it was announced by the company, Highland Gold has increased gold output by 14% in the first half of the year compared to the similar period of the previous year – to 78.421 thousand ounce.
Presently Highland carries out mining operations only at Mnogovershinnoye deposit in Khabarovsk region. Increased production became possible due to stabilization of the composition of ore supplied to gold extraction plant.
The company also continues preparations for commissioning of new facilities. In particular, according to the licensing agreements, pilot mining operations are expected to be started at Novoshirokinskoye site in Zabaykalye. By the end of the year, about 30 thousand tons of ore with low metal content is planned to be mined, and the extraction technology is supposed to be refined over this period. The commercial operation is supposed to start in January 2010, its anticipated lifetime is through 2023; total of 1.5 million ounces of metal in gold equivalent is expected to be extracted over lifetime.
In the second quarter, Highland completed approbation of the reserves of Taseevskoye deposit in the State Reserves Committee: 3.39 million ounces of gold with the average content of 5.22 grams per ton of ore in the C1+C2 category. As reported by the company, the reserves were increased more than two-fold as a result of implementation of the geological survey program in 2006 and 2007.
By the end of 2009, the company intends to produce a program of the deposit development and optimize the process. The results of these efforts will be announced by the company in the first half of 2010.
In July, Highland also completed approbation of the reserves of Belaya Gora deposit in Khabarovsk region – 820 thousand ounces the average content of 3.5 grams per ton of ore in the C1+C2 category. The deposit is located 66 kilometers from Mnogovershinnoye; open-cast mining is supposed to be used, and the company has already started the project feasibility studies.
The main shareholders of the company are Millhouse representing interests of Roman Abramovich and his parnters, Barrick Gold and Tremadon Ventures, the beneficiaries of which are the shareholders of Evraz Group Alexander Abramov and Alexander Frolov.
On September 16, shareholders of Polymetal will discuss the transactions aimed at restructuring the debt of Varvarinskoye.
The shareholders of Polymetal OJSC discuss the transactions aimed at restructuring the debt of Varvarinskoye, which the company intends to purchase from Orsu Metals at the Special shareholder meeting on September 16, as announced by the company.
As explained in the memorandum, the company is awaiting shareholder approval to conclude a surety agreement (corporate warrant) for the amount of $90 million and other documents providing collateral in relation to possible restructuring of the existing debt and hedging liabilities of Varvarinskoye JSC.
As was reported earlier, Polyetal intends to pay for Varvarinskoye gold and copper deposit in Kazakhstan $8 million in monetary assets at the moment of concluding the transaction, up to $12 million more in installments, and to assume the debts and hedging liabilities of the company in case an agreement on restructuring them can be reached.
Until conclusion of the transaction, Orsu had debts and hedging liabilities associated with Varvarinskoye to a syndicate of banks, including Investec Bank, Nedbank Limited and Natеxis Bank: credit repayment liabilities for about $73 millions and forward contracts for 338.468 thousand ounces of gold at the price of $574,25 per ounce with the total nominal cost of about $140 million.
"Polymetal" has earlier stated that the transaction will only take place if both companies and the creditors sign legally binding documents about refinancing. Orsu is hoping to conclude the deal in the third quarter of 2009.
As stated in the memorandum, the shareholders of Polymetal will also discuss the possibility of establishing a managing board in order to strengthen the standards of corporate management. Appropriate amendments will be made to the Articles of Association of Polymetal for that purpose, and the statutes of the board will be adopted.
The list of persons having the right to take part in the meeting is compiled based on the information from the registry as of August 11, 2009.
Nornickel wants to focus geological survey on the major deposit sites.
Mining and metallurgical complex “Norilsky nickel” is developing a new geological survey strategy focusing on the main deposit sites owned by the company rather than on new projects.
“We are currently preparing a new geological survey strategy. The Board of directors will review it at the next routine meeting. Until then, I am unwilling to disclose any details. However, the main principle is as follows: we have to focus on the main deposit sites owned by the Nornickel company located in the proximity of major plant and equipment”, - said the Director General of Nornickel Vladimir Strzhalkovskiy in his interview to Vedomosti newspaper.
He also informed, that the activities at the group of deposit sites combined into so called “Chita project” are currently undergoing “optimization”.
“Chita project”, which is being implemented in the framework of partnership between federal and private businesses, includes construction of a railroad Narin-Lukogan and development of the largest polymetallic deposits in Zabaykalye: Bistrinskoye, Kultuminskoye, Logokanskoye (copper-sulfide), Solonechenskoye (stibium-gold) and Bugdainskoye (gold-molybdenum-porphyrite). The project was initiated by Nornickel, back when the company was lead by Michail Prokhorov, the project was managed by Maxim Finskiy (currently the director of “Intergeo” company, part of M. Prokhorov’s “Onexim” Group).
“We are implementing these projects in cooperation with the state. In two of them, the original estimate of the resources proved wrong, however the projects were not cancelled but are rather being optimized. Review of the technical specifications for these projects is in progress now, and it is being conducted in cooperation with the state. The state is also investing with caution presently, reducing the spendings for low-priority projects”, - said V. Strzhalovskiy.
The Director General of Nornickel refused to comment upon the proposal of Intergeo to take over the management of “Chita project” announced earlier.
Creation of Intergeo in 2008 was associated with a conflict of interests, which has not been fully resolved so far. After announcement by Onexim of the plans to consolidate licenses for several deposit sites on the balance of Intergeo, Nornickel declared its intention to conduct line-of-duty investigation in relation to suspected asset stripping. As a result of this, an agreement was reached that Nornickel will be able to redeem the licenses from Intergeo at the price of the invested capital.
“We conducted an investigation, after which a shareholder meeting was held. Oleg Deripaska, Vladimir Potanin, Mikhail Prokhorov and our chairman of the Board of directors Alexander Voloshin were present at the meeting. We agreed that within three years Nornickel can buy back these licenses at the price equal to expenditures incurred by Prokhorov – about $90 million. In February-March the document was submitted for signature to Intergeo, we have not yet obtained any response”,- told V. Strzhalkovskiy.
On the whole, Nornickel remembers its former co-owner and chief executive more as a client of a pension fund than as a beneficiary of a package of shares (M. Prokhorov is a minority shareholder of RusAl, which, in turn, owns blocking shareholding of Nornickel.
“It is infrequent that we need to discuss anything with Prokhorov, our shareholder is RusAl. If he has any proposals, he first needs to discuss them with major shareholders of RusAl. However, Prokhorov is our pensioner (client of the non-governmental pension fund of Nornickel). And we treat all pensioners with maximal respect, regardless of their opinions”, - said V. Strzhalovskiy.
Answering the question about the fate of the joint venture of Nornickel with BHP Billiton and Rio Tinto, the Director General said that “those of the projects that do not prove their worth should be terminated”. “However, we shall only do that on receiving approval of our partners”, - stressed he.
The joint venture with Rio Tinto "RioNor" was established in 2006 for the purpose of prospecting for non-ferrous metals in Siberia and Far East of the Russian Federation. The agreement with BHP Billiton anticipates joint prospecting for mineral resources at the territory of Western Siberia and in the North-Western regions of Russia.
Kola Mining will complete the feasibility study for development of the nickel deposit Souker by the end of 2009.
Canadian Kola Mining, which is implementing several projects in Russia, intends to complete the feasibility study for development of the nickel deposit Souker at Kola peninsular by the end of 2009, as stated in a memorandum of the company.
The indicated resources of the deposit amount to 103 million tons of ore with 0,26% nickel content and 0.06% copper content, preliminarily estimated resources – 268 million tons of ore. In particular, the indicated reserves of nickel are 268 thousand tons, estimated reserves – 630 thousand tons.
The company specifies, that the average metal content can prove higher after completion of the procedure of approbation in the State Reserve Committee, since the preliminary estimates include the inside dump areas, but feasibility study assumes their removal during mining activities.
“The recent development of the worldwide economics and the established nickel price look encouraging to us. We believe nickel prices will continue to grow. We make substantial progress and are on schedule registering the Souker deposit in the State Reserve Committee”, - chairman of the company board of directors Mikhail Yuriev is quoted in the memorandum.
The information about cobalt reserves will also be included; content of this metal is estimated at 0.02 – 0.03%.
Kola Mining specializing in non-ferrous and precious metals holds licenses for 3 deposit sites at Kola peninsula, and has recently purchased from Polymetal a license for lode gold deposit in Krasnoyarsk region. Besides that, the company owns two licenses for gold mining in Kirgizia.
"Severstal" increased the share in High River Gold to 61.7% after share repurchase
Severstal-Resurs, the raw material division of Severstal OJSC, completed repurchase of shares from minority shareholders of High River Gold, having increased its share in the company to 61.7%.
Previously the share of Severstal in the equity of High River amounted to 57.3%.
The shares were repurchased through a subsidiary of Severstal-Resurs, Lybica Holding. "Though the number of those who accepted the offer is insufficient for the company buyout, we are satisfied that Severstal increased its control of the company to 61.7%. We intend to manage High River as our business-division”, - said financial director of Severstal Alexey Kulichenko, as quoted by the company memorandum.
Earlier the Director General of HRG and the head of gold mining division of Severstal Nikolay Zelenskiy explained to Interfax that over the last half year Severstal provided financial support to HRG three times, having totally invested about $80 million, which allowed the Canadian company to avoid default. In these circumstances it was decided to consolidate HRG on the basis of Severstal in order to restructure the financial debts of High River and ensure systematic development of its assets. Severstal intended to increase its share in HRG to 100%.
As was reported earlier, Severstal originally offered the shareholders of HRG 0.22 Canadian dollars per share, but later increased to offer to 0.3 Canadian dollars (about $0.28) per share. New proposal provided for 90% premium to the average price of High River shares over 60 days preceding May 21, when HRG for the first time officially announced the negotiations with Severstal about share repurchase.