MOSCOW. July 15 (Interfax) - Russia's OJSC Vysochaishy (GV Gold) plans to invest $9 million in the Krasny project, operated by Kopy Goldfields, and will receive 51% of a joint venture with the Swedish mining junior.
Kopy Goldfields said in a press release that its subsidiary AB Krasny Gold Fields had entered into an agreement with GV Gold for the exploration and development of the Krasny Project. Under the agreement GV Gold will invest up to $9 million, of which $1 million is a cash consideration immediately payable to Kopy Goldfields upon completion, $6 million is earmarked for exploration activities, and a potential additional consideration of $2 million will be paid in the event of successful exploration program. This will earn GV Gold up to a 51% interest in the Krasny Project.
Completion will take place within 30 days, but exploration will start immediately.
Under the terms of the agreement, GV Gold may earn up to a 51% interest in the Krasny Project by financing an in-fill exploration program followed by a reserve report in accordance with both the Russian GKZ classification and the international JORC standard.
"Signing this agreement with GV Gold is a very important step for Kopy to bring the Krasny project into production. It also confirms the high quality of Kopy Goldfields' exploration assets. Upon completion, we will be able to continue a full speed development of the Krasny deposit into a mine. Having one of the Russia's largest and fast growing gold producers with extensive competence and experience of building and operating gold mines in the Lena Goldfields area as a partner, makes production plans very realistic. We are pleased to get a full carry forward for the agreed exploration program," said Mikhail Damrin, CEO of Kopy Goldfields.
Krasny is located close to GV Gold's main existing gold projects in the Irkutsk region. Its probable resources are estimated at 43 tonnes (1.37 million oz) and around a third of them near surface (up to 200 meters). GV Gold plans to accelerated follow-up exploration and put the deposit commercially on stream.
GV Gold raised gold production 4.6% last year to 175,500 oz (5.458 tonnes). This was just below guidance of 176,700 oz (5.495 tonnes) for the year. Gold sales grew 3.7% to 5.408 tonnes (173,800 oz).
The group's hardrock deposits are located in the Irkutsk Region, with the company performing the lion's share of extraction at the Golets Vysochaishy gold deposit. It also owns licenses for the Ozherelye, Ugakhan, Ykanskoye and Drazhnoye deposits, as well as the Leprindo and Babushkin sections. In Yakutia, the company is developing the Bolshoi Kuranakh placer and Drazhnoye field and holds the license to the central part of the Tarynskoye field.
GV Gold chairman and Lanta Bank CEO Sergei Dokuchayev, company board director and Lanta Bank deputy CEO Natalya Opaleva and company board director and LT-Resurs CEO Valerian Tikhonov each own 20.36% of shares in GV Gold; BlackRock holds 17.99%; the EBRD owns 5.26%; GV Gold board director Vladimir Kochetkov holds 5.46%; Cyprus-based firms Brishurt Ltd and Fayweld Holdings own 6.37% and 2.95% respectively; and Sergei Vasilyev holds 0.91%.
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