By Swann Collins, investor, writer and consultant in international affairs. Eurasia Business News, September 5, 2022

The Russian President Vladimir Putin allowed the Russian company UMMC-Invest to acquire several Russian assets of the British company Petropavlovsk PLC. The corresponding order was published on the official portal of legal information.

Such permits are required in connection with the ban on transactions with shares in Russian companies owned by owners from unfriendly countries.

In particular, we are talking about the companies JSC “Pokrovsky Rudnik“, “Albynsky Rudnik” LLC and JSC “Management Company Petropavlovsk“. Also on the list are Victoria Resources Limited, Cayiron Limited, Petropavlovsk Cyprus Limited, Sicinius Limited and Atlas Mining LLC.

The value of the transaction for the sale of the assets of the gold miner Petropavlovsk to the Ural Mining and Metallurgical Company (UMMC) is estimated at more than $ 600 million.

At the end of March, Petropavlovsk PLC announced that it could no longer sell mined gold, since under the terms of loan agreements with the Russian bank Gazprombank, a 100% production quota should be bought only by them.

In April 2022, it became known that Gazprombank, which is under British sanctions, transferred to UMMC-Invest the rights of claim on a loan to Petropavlovsk enterprises for $ 201 million, taking into account interest.

UMMC, which until March belonged to Iskander Makhmudov and Andrey Bokarev, is the largest creditor of Petropavlovsk. The possibility of selling assets in Petropavlovsk PLC became known in mid-April. THE main reason would be the British sanctions against Gazprombank, which caused problems with the sale of gold and debt servicing in this bank.

Read also : How to invest in gold

In May 2022, it was reported that Gazprombank transferred to Nordic the rights of claim on loans from Petropavlovsk subsidiaries.

Petropavlovsk is one of the largest gold mining companies in Russia. The main assets of the company (“Pioneer”, “Malomyr”, “Albyn”) and the Pokrovsky Autoclave-Hydrometallurgical Plant are located in the Amur Region, in the Russian Far East.

Gold production of Petropavlovsk in Q1 2022 was 103 thousands oz, up 8% from Q1 2021 (95.6 thousands oz), driven by increased production at Pioneer and processing of third-party concentrate.

Production of gold from own raw materials in the reporting period amounted to 80.2 thousands tons of troy ounces, up 3% compared to Q1 2021 (82.4 thousands oz) due to a decrease in production volumes at Albyn and Malomyr.

Gold production from third-party concentrate increased by 73% to 22.8 thousands oz (it was13.2 thousands oz in Q1 2021) due to higher refining volumes compared to the same period last year.

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