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London

2021/06/03

Russia’s Nordgold prepares for London IPO

Latest gold miner to choose UK capital for listing as metal’s price rallies


By: Henry Sanderson

Russian gold miner Nordgold plans to list in London as it looks to take advantage of a rebound in the gold price.  


The company intends to sell a 25 per cent stake to investors, including via a secondary listing in Moscow, said people familiar with the company. It is set to file a registration document this week.  


The miner is the latest to come to the UK capital to capitalise on interest in gold, after prices surged last year following the onset of the pandemic. Canada’s Yamana Gold listed in London last year, while Endeavour Mining is set to join the market this month.  


Gold prices have risen 10 per cent since the beginning of March to $1,906 a troy ounce, as investors buy the metal to hedge against the prospect of rising inflation driven by higher raw material prices and a recovery in global demand.  


The NYSE Arca Gold Bugs index, which tracks shares of gold miners, has risen 29 per cent over the same period.  


Nordgold hopes to attract investors by paying higher dividends than its peers in North America. It is developing two new gold mines in the far east of Russia, which will help it boost production by an expected 20 per cent over the next five years.  


In contrast, production at the world’s largest gold miner, Newmont, is set to remain roughly flat until 2025.


Nordgold has nine mines — four in Russia, three in Burkina Faso and one each in Guinea and Kazakhstan. It produces more than 1m ounces of gold a year and reported ebitda in excess of $1bn last year.  


Polymetal, the largest Russian miner in London with an £8bn market capitalisation, produced 1.4m ounces of gold in 2020. Endeavour is set to produce up to 1.5m ounces this year. 


Nordgold is developing the Gross and Tokko mines in Russia’s far east, which it expects to produce more than 350,000 ounces of gold a year.  


The company is led by Nikolai Zelenski, a Surrey-based former McKinsey consultant with a PhD in molecular genetics from the University of Texas.  


Bacchus Capital Advisers are financial advisers to Nordgold while Citi, JPMorgan and VTB are global coordinators for the offering.