Kazakhstan-based gold miner Polymetal is looking to sell its Russian assets within the next six months, according to CEO Vitaly Nesis.

Mining groups from both Russia and China are lining up to purchase some of the company’s eight Russian gold and silver projects.

Polymetal was once one of the most profitable gold miners in the world, however, it has suffered from US sanctions against the business as a result of Russia’s invasion of Ukraine in 2022.

The company has lost 80% of its share value in the time since the conflict broke out. This has been paired with a heavy depreciation of the Ruble that has made business tough.

In order to facilitate the sale, Polymetal relocated its headquarters from Jersey to Cyprus, where it is incorporated, but the company itself is domiciled in Kazakhstan.

The Russian Government banned the sale of domestic assets by companies based in countries that it deemed ‘unfriendly’. While Jersey was an “unfriendly” location, Kazakhstan, where Polymetal already has a number of mining operations, is not.

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By GlobalData

Nesis told the Financial Times: “If we had remained in Jersey, the risks of losing the Russian business’s value would have been exceptionally high.

“Now I am optimistic that Polymetal International will be able to reap significant benefits from its sale.”

However, Nesis did state that receiving assent for the sale from Russia’s antimonopoly service could hinder the deal’s progress.

Polymetal will use the revenue generated from its Russian divestment to invest in its Kazakh operations, which have been less in number but more profitable than its Russian assets in recent years.

The company has two projects in Kazakhstan, which together provided the entirety of the company’s cash flow in 2022 because of the sanctions against Russia. The company produced 764,000t of gold equivalent in 2022, more than 75% of which came from its Russian projects.