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Solidcore Gold Mines looks to Gulf finance in post-Russian strategy

Solidcore Gold Mines looks to Gulf finance in post-Russian strategy

Solidcore, a Kazakh gold miner, is looking at issuing bonds to fund investment in Kazakhstan, including new projects estimated to cost $350 million. The company's CEO Vitaly Nesis said that Solidcore was considering issuing these bonds to the Gulf region.

Solidcore (formerly Polymetal International) is the second largest gold miner of Kazakhstan. In 2024, the company was forced to sell its Russian assets which accounted for 70% of its production. This happened after U.S. sanctioned its operations in Russia.

Mercury Investments, a government-owned fund in Oman, was the largest shareholder of this new company. Its five-year investment program had to be designed from scratch by its newly-listed Kazakhstan-based parent.

Nesis said that the main strategic result of 2024 will be the launch of a full-fledged Investment Program. He said that they were "very actively" considering the possibility of issuing exchange traded bonds in Gulf countries.

Nesis stated that the UAE and Oman exchanges could be a possible option for bond placement. Bank loans and share issuance are also on the table.

There is the Muscat stock exchange, Dubai and Abu Dhabi. We are examining different forms including traditional bonds and sukuks (Islamic bonds). "We are actively working together with rating agencies because this direction is very promising," Nesis stated.

Nesis estimated that the company's investment into the new Syrymbet Tin project will be around $250 million. Solidcore's Tokhtar Gold Project in Northern Kazakhstan, which is still in the exploration phase, is estimated to be worth $50-100 Million.

The company intends to invest over $1 billion, excluding M&A, until 2029. It will focus on the Ertis Pressure Oxidation Hub in Kazakhstan.

Solidcore's 2024 net profit almost doubled due to record gold prices, but Nesis says the gold rally might not last.

We believe that gold prices are unlikely to remain at their current levels even on a medium-term basis. Nesis stated that they plan conservatively when making plans.

Nesis stated that the company was looking at possible acquisitions of production assets both in Uzbekistan as well as Oman.

Nesis stated, "We're taking our first steps into the M&A world and laying the foundation for future growth of the company."

Nesis said that, despite high gold prices, the company did not plan to pay dividends so long as its shares remained in the National Settlement Depositary of Russia (NSD), a part of the Moscow Stock Exchange.

(source: Reuters)