Polymetal has stopped the deferred conditional fee associated with the purchase of one of the largest gold projects “Kyzyl” (Kazakhstan) for $10 million, the company reports. The press release clarifies that the funds are paid in shares.
The initial agreement on the purchase of “Kyzyl”, adopted in 2014, included a reward of $618.5 million, paid by money and shares of Polymetal, as well as a deferred conditional cash reward of up to $500 million.
The payment of the additional remuneration was dependent on the relative dynamics of gold prices and Polymetal stock prices for seven years.
Now the company (holder of rights to additional remuneration) will receive $10 million from issuance of 1 015 113 new shares of Polymetal (0.2% of the new controlling company) in exchange for early termination of the obligation to pay additional remuneration.
“We took the opportunity to fix the deferred remuneration at an attractive price for shareholders,” explained Vitaly Nesis, Chief Executive Officer of Polymetal.
Polymetal announced the acquisition of the Kazakh company Altynalmas Gold (AAG), implementing a gold mining project “Kyzyl” in may of 2014. The sellers of AAG were Sumeru Gold B. V. and Sumeru LLP, the owner of which is the Kazakh businessman Timur Kulibayev – the son in-law of the President of Kazakhstan, independent Director of “Gazprom”.
Polymetal is the largest silver producer in Russia and one of the leading gold miners. The enterprises of the holding are located in Magadan and Sverdlovsk regions, Khabarovsk territory, Chukotka, Kazakhstan and Armenia.
The largest shareholders of Polymetal are Alexander Nesis ‘ EAST group (25.89% of the current CC), Peter Kellner’s PPF Group (12.11%) and Alexander Mamut’s family (10.14%).