Daily analyst comments
Polymetal ready to acquire two gold and silver fields
09.04.09 11:09
Polymetal has officially announced that it is ready to acquire a 100% stake in two new gold and silver fields: Sopka Kvartsevaya and Dalny. Should the bargain be struck, Polymetal will receive alluring assets on good terms, which should be seen as positive news by the market.
On April 8, Polymetal (RTS: PMTL) announced officially that is was ready to purchase a 100% stake in Rudnik Kvartsevy (Russian for Crystal Mine), which holds licenses to tap two gold and silver deposits, Sopka Kvartsevaya and Dalny, with total estimated reserves of 680,000 oz of gold and 16 million oz of silver. Polymetal is to pay for the new acquisition with 10 million additional shares. The deal should be closed in 3Q 2009.
The current market value of 10 million Polymetal shares is USD 68 million. Therefore, the company is ready to pay USD 100 per 1 oz of gold not accounting for the cost of field infrastructure and silver reserves. At the moment, public gold producers are valued at USD 300 per oz, on average; therefore, the transaction appears to be on quite favorable terms for Polymetal.
In our opinion, if the bargain is struck, Polymetal will acquire appealing assets on good terms, which should come as positive news for the market. We currently do not have an official recommendation for Polymetal.