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Petropavlovsk says conditional sale of non-core assets

20 April 2015 07:35

Petropavlovsk subsidiary Peter Hambro Mining (Cyprus) Limited yesterday entered into a conditional Share Purchase Agreement relating to the sale of its 95.7% interest in Joint-stock company gold-mining company Koboldo ("Koboldo"), a company which runs operations to extract alluvial gold.

The total cash consideration for the transaction is RUB 942 million (c.US 18.7 million[1]) plus reimbursement of VAT for the fourth quarter 2014, payable within prescribed timeframes from the date of entering into the SPA.

Gold production from the assets held by Koboldo is solely from alluvial operations located in the Amur region in the Russian Far East.

Due to Koboldo's relatively high costs and low gold production output, which in 2014 was only c.5% of total Group's production, Koboldo assets are considered as "non-core". The sale of Koboldo will not affect the Group's ability to achieve its 2015 production target of 680,000-700,000oz of gold.

The successful disposal of Koboldo will allow Petropavlovsk to further decrease its net debt position and reduce non-core holdings. Our focus remains the development of the Group's highly-prospective, hard-rock mines in the Amur Region.

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