One of Kazakhstan's largest gold mining companies, KazakhGold Group Limited, has raised $100 million via a new share issue sale, it said on Thursday. The share placement was first announced during KazakhGold's partial share offer to Polyus Gold in 2009, but the issue was postponed because the company received no permission from the Kazakh government. The company has placed 51.194 million shares and 15.471 million Global Depository Receipts (GDRs), each representing one share worth $1.5. Jenington International Inc, a subsidiary of Polyus Gold, has subscribed for 51.194 million shares in line with the partial offer and will hold 77.745 million shares, which amounts to 65% of KazakhGold's capital.
KazakhGold and Polyus Gold, which owns 50.1% in KazakhGold, have recently adopted a preliminary equity swap scheme, under which KazakhGold would acquire its parent company Polyus Gold. Under the scheme, one share of Polyus Gold will equal 9.26 GDRs of KazakhGold, and one American Depositary Receipt (ADR) of Polyus Gold will equal 4.885 GDRs of its subsidiary. The deal is aimed at merging the two companies into one holding, which will be traded on the London Stock Exchange (LSE) as a single company, while Polyus Gold plans to delist its ADRs from the LSE soon. The merged company is expected to become one the world's leading gold mining companies, whose shares will trade on the LSE.
Polyus Gold and KazakhGold's 2009 joint gold production is estimated at 1.3 million ounces, while the proven, probable and possible reserves total 74.7 million ounces. Polyus Gold shareholders are expected to own almost 93.5 percent, while KazakhGold will acquire only 6.5 percent in the new company, which will be named Polyus Gold International Limited. Polyus Gold and KazakhGold have already received all the necessary permits from Kazakh controlling and governmental bodies, the company said in a statement.
