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31 March 2008
Uranium Holding ARMZ Press Release
By the end of the year Uranium Holding ARMZ (OJSC Atomredmetzoloto) and OJSC Zoloto Seligdara will develop a feasibility study for the project of joint development of the Lunnoye gold, silver and uranium deposit.
Uranium Holding ARMZ (OJSC Atomredmetzoloto), OJSC Zoloto Seligdara and OJSC Seligdar entered into a tripartite agreement on the terms of financing of the Lunnoye gold, silver and uranium deposit joint development project (South Yakutia). The key commercial component of the deposit is gold, while uranium and silver will be mined as by-products. The project will be developed by the joint venture of the Uranium Holding ARMZ and Zoloto Seligdara - CJSC Lunnoye. OJSC Seligdar's authorized advisor in the transaction is the Investment Group Russian Funds.
Pursuant to the agreement the estimated investments in the project will be RUR 1.4 billion up to 2011. Such investments will be used to fund exploration, design and construction of the mining company to undertake a combined extraction of gold, uranium and silver. For the first time ever in Russia the investor of the uranium mining project will be a private company – OJSC Zoloto Seligdara. All uranium produced by CJSC Lunnoye will be sold by Uranium Holding ARMZ, and gold and silver– by OJSC Zoloto Seligdara.
Vadim Zhivov, General Director of the Uranium Holding ARMZ: "This is a pilot project of having an investor in the Russian uranium industry whose objective is to substantially, three times, increase the uranium production by 2015. This project will form a venue for creation and fine tuning of a generic arrangement to work with the investors. The underlying idea of such arrangement is to use private money to develop the domestic uranium mining industry while maintaining control within joint ventures over the uranium business unit of OJSC Atomenergoprom and the State Corporation Rosatom.
Anatoly Labun, General Director of OJSC Seligdar: "This project is part of OJSC Seligdar's strategy to diversify its gold mining operations. OJSC Seligdar has substantial experience in successful implementation, construction and launch of mining companies. Our plans provide for implementation of this project within 3-4 years."
The feasibility study of the comprehensive deposit development project will be prepared by the end of 2008. CJSC Lunnoye expects to start mining in 2010 and reach the target mining level of 1.4 tons of gold per year by 2012.
OJSC Seligdar is a gold mining holding established on the basis of a number of gold mining enterprises with the aggregate gold reserves of 105 tons, current production in 2007 – 2.1 tons, in 2012 the holding's target is to produce 11.2 tons of gold. OJSC Zoloto Seligdara is a wholly owned subsidiary of OJSC Seligdar formed in 2006 to develop Nizhne-Yakoktinskoye ore field (Yakutia).
Investment Group Russian Funds was established in 1999. Members of the Group include IC Prospect, IC Prospect Investments (Ukraine), MC Pallada Asset Management, NPF First National Pension Fund, IC IT Invest. The National Association of Stock Market Participants (NAUFOR) rated IC Prospect among the top twenty Russian investment companies. The stock section of the Moscow Interbank Currency Exchange (MICEX) twice recognized the Group as the best underwriter in the Bond Market nomination. The annual sales of the group exceed $ 4 bln. As of January 1, 2007 the Group had own assets of over $100 mln. and trust funds of over $500 mln. Press Services of the Uranium Holding ARMZ, OJSC Zoloto Seligdara, IG Russian Funds
