Polyus Gold (Open Joint Stock Company, OJSC) is the leading gold producer in Russia and Kazakhstan and the only Russian company among the world’s largest gold producers. In late August, the biggest producer of gold in Russia Polyus Gold completed the acquisition of Kazakhstan’s KazakhGold company, which is listed on the the London Stock Exchange.

Jennington, a subsidiary of Polyus Gold in charge of the acquisition, reported that the stockholders of KazakhGold have agreed to sell more than 51 million shares of the company. Since the number of shares corresponds to more than 96 percent of the company’s charter capital, Polyus Gold has decided to reduce the number of shares acquired on proportional basis. Polyus Gold decided to proceed with its original plan of purchasing 50.1 percent of the shares. Around 41 percent of KazakhGold shares are owned by Gold Lion Holdings. 

Polyus Gold paid USD 7.18 and 0.064 shares of Polyus Gold for each share of KazakhGold. KazakhGold shareholders could buy back their shares for 0.423 shares of Polyus Gold. In order to facilitate the transaction, the Russian company gave out 0.9 percent of its own shares.

After completing the partial offer stage, KazakhGold issued new shares of stock at the price of USD 1.5 per share with the total value of USD 100 million. Polyus purchased 50.1 percent of these shares. The remaining portion of the shares was purchased by other major KazakhGold shareholders.

One of KazakhGold’s subsidiaries is KazakhAltyn, whose volume of gold production in 2007 stood at 7.4 tons. The company’s crown jewels are the Aksu, the Bestobe, and the Zholymbet fields in Kazakhstan, whose reserves have been estimated at 60 million ounces of gold. Since 2007, more than 300 000 ounces of gold were recovered from those mines. There are recovery facilities and leaching platforms at the Aksu and the Bestobe gold fields. The Zolymber field is served by a single recovery facility. The capacity to process tailings at each site is around 3 million tons. KazakhGold also has fields in Kazakhstan, Kyrgyzstan, and Romania. The company’s total reserves are 59.6 million ounces. Before the acquisition Polyus Gold paid USD 13 for each ounce of gold purchased from KazakhGold.