RUSSIAN miner Nordgold, the country’s third-largest gold producer, will bid for the 25 per cent of High River Gold Mines it does not already own, in a deal valuing the Canadian-listed producer at $1.2bn (£769m).
Nordgold, controlled by billionaire Alexei Mordashov and chaired by Philip Baum (pictured right), was spun off from Mordashov-owned Severstal earlier this year and listed its global depositary receipts (GDRs) in London as part of efforts to pursue an ambitious expansion strategy.
Unusually for major Russian gold miners more accustomed to exploring and developing resources closer to home, Nordgold has bet heavily on Africa, with assets in Guinea and Burkina Faso.
Successfully buying out minority shareholders in High River will give Nordgold full control of the producer in which the miner bought a stake in 2008. High River has become the cornerstone of Nordgold’s resources and production, with mines and exploration projects in Russia and Burkina Faso. High River exploration assets include Bissa in Burkina Faso and a 50 per cent interest in Prognoz in Russia, one of the largest high-grade primary silver deposits in the world. Nordgold is offering 0.285 Nordgold global depositary receipts for each High River share held, or C$1.40 in cash.
The paper offer, which could boost the stock’s limited London liquidity, represents a 17.2 per cent premium based on closing prices on 17 July.
CO HEAD OF EUROPEAN
Peter Bacchus joined Jefferies from Morgan Stanley, where he was a managing director and global head of metals and mining investment banking.
Nordgold, spun out of Russia’s second-largest steel-maker Severstal, was one of the first new clients won by the Jefferies Hoare Govett investment banking team of which Bacchus was a leading light.
On his team on the High River Gold bid are Susanna Liu and Dan Vujcic.
The executive has also previously served as a managing director at Citigroup where he was head of Asia-Pacific industrials investment banking and co-head of global metals and mining investment banking based in Sydney, Jakarta and London.
Bacchus started his career as a chartered accountant at Price Waterhouse after a period with the Foreign and Commonwealth office in the US. He received his MA from Cambridge University.
Jefferies, a global securities and investment banking firm, has served companies and investors for nearly 50 years.
Troika Dialog is joint financial adviser on the deal.
Bacchus and his team have an office in Canada and are expanding operations in China.
City A.M. Reporter