Petropavlovsk announces potential 149m-pound investment in IRC
Mining company Petropavlovsk has announced a potential 238m-dollar (149m-pound) investment in IRC by General Nice Development and Minmetals Cheerglory to fund production growth, according to a trading update published by the group on Thursday morning.
Mining company Petropavlovsk has announced a potential 238m-dollar (149m-pound) investment in IRC by General Nice Development and Minmetals Cheerglory to fund production growth, according to a trading update published by the group on Thursday morning.
IRC is the group's former non-precious metals division and now a subsidiary in which it now holds a majority stake.
The potential $238m investment in IRC by new shareholders would be to support production growth and would reduce the company's holding in IRC to approximately 40%, the group reported. New shareholders would potentially hold approximately 36% in each case assuming no additional shares in IRC were issued and that all IRC shares had been issued in accordance with the subscription agreements.
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In addition to announcing the possible investment, the company issued its 2012 full-year and fourth-quarter trading statement as an update.
Gold production rose approximately 13% to 710,400 ounces. Average realised gold sales prices went up approximately 3% to $1,670 (£1,042.72).
The group announced strong operating cash flow during the second half of 2012, according to preliminary unaudited estimates, indicating that net operating cash flow would increase approximately five times in the second half of 2012 in comparison with first-half 2012 results.
Commenting on developments regarding the IRC, he said: "I am delighted to report on the potential significant investment in IRC by General Nice and Minmetals Cheerglory, an investment which will provide IRC with additional financing for its flagship K&S project and Garinskoye.
"It also delivers off-take arrangement, marketing infrastructure and cash-flow security, which are expected to underpin substantially IRC's development. As Petropavlovsk will continue to be a major investor in IRC, this investment will enable the company to share in the upside of IRC's growth potential.
He added: "In addition, I hope that it will allay shareholders' fears about additional financing requirements relating to IRC as, upon the full completion of the investment, the company will have a pro-rata indemnity from General Nice in respect of the company's contingent liabilities for IRC bank debt. The first stage of this transaction is expected to complete shortly after Petropavlovsk and IRC shareholder approval is obtained."
MF
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