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London

2021/01/20

Russian Gold Miner Nordgold Aims to List in $5 Billion London IPO

Russian Gold Miner Nordgold Aims to List in $5 Billion London IPO

Possible offering comes amid a monthslong rally in precious-metal prices

Nordgold produces one million ounces of the precious metal a year and has constructed three gold mines since 2013.


Published in the Wall Street Journal

By Alistair MacDonald and Ben Dummett

Updated Jan. 20, 2021 11:04 am ET


Russian gold miner Nord Gold UK Societas, or Nordgold, is looking to list in London as early as this summer, capitalizing on the precious metal’s long price run to become the largest mining company to float globally in at least five years, according to people familiar with the matter.


Nordgold’s initial public offering could value it at more than $5 billion and would float over 25% of the company, some of these people say. With two Canadian gold miners moving their listing to the U.K., Nordgold’s IPO is a boost for London’s financial district amid concerns that Brexit makes it less attractive.


A spokesman for the U.K.-domiciled company, which has 10 mines in Africa, Russia and Kazakhstan, said it is evaluating various strategic options, which may include an IPO on the London Stock Exchange. He declined to comment further.


The company has already hired banks to lead the IPO, according to a person familiar with the matter. Bacchus Capital is Nordgold’s financial adviser for the possible offering.


Gold has fallen 8.5% since highs last August, but the precious metal is up 57% since the summer of 2018. That long rally has been fueled by ultralow interest rates, which make gold more competitive against yield-bearing investments, and as investors looked for havens amid the spread of the coronavirus.


Gold miners are looking to London after Randgold was delisted from the LSE following its acquisition by Canada’s Barrick Gold Corp. That left a space for peers to tap London based investors.


Toronto-based Yamana Gold Inc. added a London listing last year and Canada’s Endeavour Mining Corp oration has said it wants a secondary listing in London as well. Barrick Gold itself has debated a move to the New York Stock Exchange in the past, the company’s chief executive officer told The Wall Street Journal.


Nordgold’s London float, though, would be its only listing and among the largest mining IPOs since South32 Ltd. was valued at 11.3 billion Australian dollars, or just over $9 billion, in May 2015.


London continues to have the world’s biggest listed mining sector, based on valuation. Miners in London are worth a combined $476.3 billion against $472.7 billion in Australia and $277.2 billion in New York, according to data provider Refinitiv.


Nordgold was established in 2007 and is majority owned by Alexey Mordashov, who owns over three-quarters of Russian steelmaker Severstal PAO. The miner produces one million ounces of gold a year and since 2013 has constructed three gold mines, including two in Burkina Faso and the Gross mine in Russia.

©2019 by Bacchus Capital Advisers Authorised and regulated by the Financial Conduct Authority