Petropavlovsk to sell part of stake in Omchak

Petropavlovsk, a FTSE 250 mining group, has said that on Tuesday it signed a share purchase agreement for the transfer of 65 per cent of its issued shares in Omchak to Susumanzoloto in four tranches.

The total consideration for the sale is $21.65m.

The approval of the Federal Antimonopoly Service of Russia has already been obtained for the transaction. Following completion of the transaction, Petropavlovsk will remain a 25% shareholder in Omchak.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Chairman Peter Hambro said: "The group has adopted a strategy to focus on its core projects, thereby optimising its capital expenditure requirements and deleveraging its balance sheet, we are pleased to have confirmed the sale of these non-core assets."

The transaction will result in an accounting loss of approximately $30m to be recognised in the results for the year ending December 31st 2012, reversing the fair value gain of approximately $26m which arose in 2010.

The share price rose 2.08% to 339p by 08:39.

NR