London-listed, Jersey-domiciled Anglo-Russian gold, silver and copper miner Polymetal International said on January 25 that it is considering moving its main listing to Astana International Exchange (AIX) in Kazakhstan.
The change would occur in line with the relocation of Polymetal’s domicile from Jersey to the Central Asian nation, with the company looking to carve out its Russian business given the Ukraine war sanctions that have been imposed on Russia.
A FTSE 100 company until last year, Polymetal—which has eight gold and silver mines in Russia and two in Kazakhstan—has not been hit by sanctions itself, but faces the challenge of negotiating the heavy sanctions imposed on Moscow.
Polymetal, not long ago known as one of the most profitable gold miners in the world, previously said that it was looking for a potential re-domiciliation to a jurisdiction that Russia deemed "friendly" and that that would allow it to carry out further corporate actions.
As things stand, Russia forbids asset sales by gold miners domiciled in “unfriendly” places such as the Channel Islands. By redomiciling to Kazakhstan, the company might gain permission from Moscow to split its assets, with its Kazakh and Russian mines carved out into separate entities.
“This would allow for the restoration of shareholder value, because the Kazakh business would re-emerge without being under the shadow of sanctions,” Polymetal chief executive Vitaly Nesis was quoted as saying by the Financial Times on January 26.
The redomiciling could be completed in 3Q23, allowing for the split to occur potentially in 1Q24, he added.
The structure following a split would also allow shareholders in the Russian mines to obtain their normal dividends, which are currently blocked. The Kazakh entity would become subject to the Astana International Finance Centre (AIFC) tax regime. The current group structure has the main holding company incorporated in Cyprus and owned by a Jersey-domiciled entity listed on the London Stock Exchange.
Polymetal last year produced 1.7mn ounces of gold equivalent, up 2% y/y, and in line with original production guidance of 1.7 Moz. The miner has forecast similar production levels this year.
The company said on January 25 that it anticipated full-year total cash costs and all-in sustaining cash costs to be within the announced guidance range of $900-1,000/GE oz and $1,300-1,400/GE oz, respectively.
Polymetal added that revenue for 2022 amounted to $2.8bn, marking a 3% y/y decrease on the back of lower average gold and silver prices.
The EU’s ninth sanctions package, adopted in December, bans new investment in the Russian mining sector.