Roman Abramovich. Picture: REUTERS
Roman Abramovich. Picture: REUTERS

London — Billionaire Roman Abramovich has agreed to sell his stake in a Russia-focused gold miner, the latest in a wave of precious-metal deals, as bullion trades at a record high.

Abramovich and other investors holding about 40% of Highland Gold Mining agreed to sell their shares to Fortiana Holdings in a deal valuing the miner at about £1bn. Fortiana will make an offer to the rest of Highland’s shareholders at the same price of £3 per share, a 3.8% premium to Thursday’s closing price.

Highland Gold operates several mines in Russia and plans to produce about 300,000 ounces of gold this year. The recommended offer from Fortiana, owned by Russian entrepreneur Vladislav Sviblov, follows a string of other gold transactions this year as smaller and mid-tier companies respond to a surge in prices and reposition themselves following recent mega-deals by the two biggest producers.

The deal comes roughly a month after Fortiana sold a stake of about 5% in another Russian gold miner, Petropavlovsk, which is in the middle of a boardroom battle. Selling that interest gave the company cash to pursue other investment opportunities, it said at the time. Sviblov is also an executive and majority shareholder of a company developing a zinc and lead project in eastern Siberia.

Highland Gold rose 3.5% to 299.2p at 9.20am in London. The shares had gained 47% in 2020 by Thursday, buoyed by gold’s surge to a record this month.

The company’s independent directors are being advised by Citigroup and have recommended shareholders accept the Fortiana offer. The buyer said it plans to finance the purchase using a loan from Russia’s VTB Bank.

Bloomberg

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