On September 23, 2020, PJSC Polyus (PLZL) (Polyus), the largest gold producer in Russia, announced that it intends to accelerate the acquisition of shares in SL Gold Limited Liability Company (SL Gold), the owner of the Sukhoi Log deposit, and consolidate SL Gold by increasing its holding from 78 percent to 100 percent for a total of approximately USD128.2 million.

Shareholder structure of SL Gold

In December 2016, JSC Polyus Krasnoyarsk, a wholly owned subsidiary of the company, which held 51 percent of the shares in SL Gold, entered into a series of cash option agreements with RT Business Development (a subsidiary of the State Corporation Rostec) to acquire a 23.9-percent stake in SL Gold for a total of approximately USD138.9 million to be exercised between 2017 and 2022. During 2017-2020, Polyus acquired a 13.2-percent stake in SL Gold for a total of approximately USD76.4 million under the cash option agreements. Outstanding installments amount to approximately USD62.5 million for a 10.7-percent interest in SL Gold.

In July 2017, Polyus Krasnoyarsk entered into a series of option agreements with RT to acquire an additional 25.1-percent stake in SL Gold for a total of approximately USD145.9 million to be paid in Polyus shares in 2017-2022. In 2017-2020, Polyus acquired a 13.8-percent interest in SL Gold for a total of USD80.3 million paid in Polyus shares. Outstanding installments amount to USD65.7 million for an 11.3-percent interest in SL Gold. Polyus currently holds a 78-percent stake in SL Gold.

AG Polyus Krasnoyarsk and RT have agreed to amend the terms of a number of options related to RT’s stake in SL Gold, which were granted in July 2017, to allow Polyus to acquire RT’s 11.3-percent stake in SL Gold at the originally agreed valuation of USD65.7 million in cash in lieu of Polyus’s shares (“Amended Options”). The companies also undertook to expedite the exercise of all outstanding Polyus’ call options in connection with RT’s stake in SL Gold (including the Amended Options), which will allow Polyus to purchase RT’s entire 22 percent-stake in SL Gold for USD128.2 million, all in cash.

After exercising all outstanding options, Polyus will fully consolidate its holding in SL Gold.