PRESS: Firm affiliated with PIK Group may buy Uryumkan gold firm

MOSCOW, May 21 (PRIME) -- Vostok Zoloto, a company affiliated with Sergei Gordeyev, the owner of real estate developer PIK Group, plans to buy Russian gold producer Uryumkan, Kommersant business daily reported on Thursday quoting industry sources.

Vostok Zoloto is 99.9% owned by a Cyprus-based offshore company, while Vladislav Sviblov, formerly from PIK Group and the founder of Ecopolis Corporation owns 0.1%. PIK Group and Uryumkan declined to comment, but the sources told Kommersant that the sum of the deal is not large.

Sviblov has been expanding his presence in the mining industry over the past years. In October 2019, he bought a 4.6% stake in gold producer Petropavlovsk Plc. He also invested in the  development of the Ozyornoye zinc field in the republic of Buryatia.

Urymkan comprises several companies that produce lode and alluvial gold. The most interesting asset of the company is the Darasunsky mine in the Zabaikalsky Region discovered in 1883. It was owned by Highland Gold Mining, which sold it to Uzhuralzoloto for U.S. $25 million in 2007.  Uzhuralzoloto sold it to Uryumkan the same year for $1 million mainly because it failed to counter illegal gold production at the field.

Boris Krasnozhyonov, director of the research department of Alfa-Bank, told Kommersant that the gold price has been rising over the past month, and some investment companies expect it to rise to $2,000–3,000 per ounce in the next 12–18 months from the current $1,750–$1,770. But Urymkan has been suffering from financial problems lately.

“The company is also engaged in housing construction and production of construction materials. It is possible that the affiliates of PIK Group seized an opportunity to buy a gold producing asset at an attractive price and found certain synergies with the other directions of Uryumkan’s business,” Krasnozhenov said as quoted by Kommersant.

Sergei Kashuba, chairman of the Union of Gold Producers of Russia, said that booked reserves of the Darasunsky mine stand at 63 tonnes of gold making it a strategic asset. Its remaining resources have a gold grade of 14 grams per tonne and it is located close to the Trans-Siberian Railway. But mining at the field is difficult, and ore contains arsenic impurities, which will complicate production of commercial gold, he said.

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