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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Petropavlovsk Plc | LSE:POG | London | Ordinary Share | GB0031544546 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.20 | 1.20 | 1.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2021 to Apr 2024
TIDMPOG
RNS Number : 1088A
Petropavlovsk PLC
28 May 2021
28 May 2021
Petropavlovsk PLC (the "company" or, together with its subsidiaries, the "group")
Notice of Publication of Annual Report and Notice of Annual General Meeting
The annual report for the year ended 31 December 2020 (the ' annual report 2020 ' ) , together with a notice convening the company's annual general meeting (the 'notice of AGM') is available to view and download from the company's website at www.petropavlovskplc.com . A copy of the annual report 2020 and the notice of AGM ha s also been submitted to the National Storage Mechanism in compliance with Listing Rule 9.6.1R and will be shortly available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The annual general meeting ('AGM') will be held at London Marriott Hotel Grosvenor Square, Grosvenor Square, London W1K 6JP, United Kingdom at 3 p.m. on 30 June 2021. Subject to the lifting of the UK government's restrictions on public gatherings as anticipated on 21 June 2021, the AGM will be held as an open meeting, with shareholders able to attend in person. There will also be an opportunity to follow the business of the meeting and pose questions in writing via live webcast (although this will not constitute formal attendance or provide the opportunity to vote at the meeting). Any changes to these arrangements will be published on the company's website and announced via a regulatory news service.
Printed copies of the annual report 2020 and the notice of AGM are also being posted today to registered shareholders who have elected to receive paper communications.
The information contained in the Appendix to this announcement, which is extracted from the annual report 2020, is included solely for the purposes of complying with the Disclosure Guidance and Transparency Rules (the ' DTR ' ) 6.3.5 and the requirements it imposes on how to make public annual financial reports. The Appendix should be read in conjunction with the company's annual results for the year ended 31 December 2020 issued on 17 May 2021 (the ' annual results announcement ' ). Together, these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material should be read in conjunction with, and is not a substitute for reading, the annual report 2020.
References to page numbers and notes to the financial statement s made in the A ppendix refer to page numbers and notes to the financial statements in the annual report 2020. The information contained in this announcement does not constitute the company's statutory accounts as defined in section 434 of the Companies Act 2006 (the ' Act ' ) for 2020 or 2019 but is derived from those accounts. The auditors have reported on those accounts and their report was unqualified and did not contain statements under section 498(2) of the Act (regarding adequacy of accounting records and returns) or under section 498(3) of the Act (regarding provision of necessary information and explanations). The statutory accounts for the year ended 31 December 2020 have been approved by the board of directors of the company and will be delivered to the Registrar of Companies. A copy of the statutory accounts for the year ended 31 December 2019 was delivered to the Registrar of Companies.
Neither the content of the company's website, nor the content of any other website accessible from hyperlinks on the company's website is incorporated into, or forms part of, this announcement.
APPIX
1. Directors' responsibility statement
The following is extracted in full unedited text from page 141 of the annual report 2020.
We confirm that to the best of our knowledge:
-- The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;
-- The strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's position and performance, business model and strategy.
2. Principal risks relating to the group
A table summarising the principal risks to the group is set out below, extracted in full unedited text from pages 70 to 75 of the annual report 2020. The risks set out below should not be regarded as a complete or comprehensive list of all potential risks and uncertainties that the group may face which could have an adverse impact on its performance. Additional risks may also exist that are currently unknown to the group and certain risks which are currently believed to be immaterial could turn out to be material and significantly affect the group's business and financial results.
Hot Features
Premium
Risk Description Mitigation/comments/ 2020 Potential impact / Change
Progress
Operational risks
Production risks and The major risks which might - Preventative maintenance High / Stable
business interruption have a significant impact procedures are undertaken on
on production capabilities a regular basis to ensure
are: that machines
will function
- The Amur Region is prone properly under extreme cold
to a high risk of natural weather conditions.
phenomena, including Operational equipment is
freezing, flooding fitted with cold
and earthquakes. weather options.
- The failure of critical - Management monitor natural
assets and long downtime. conditions in order to
- Geotechnical instability pre-empt any disaster and
could lead to pit slope come up with
failure and the suspension appropriate
of mining works. mitigating action.
- POX technology is complex - The in-house R&D group
and inherently dangerous companies are engaged to
due to the high operating regularly monitor the
temperature technical and operational
and pressure. conditions of key production
- Any major tailings facilities.
incident might result in a - Thorough routine
mine operating on a limited maintenance procedures are
basis due to regulatory scheduled and performed on a
interventions. frequent basis
for all equipment and
facilities.
- Ongoing control of the
planned/actual downtime of
the production equipment and
mining fleet
and
scheduled downtime to
prevent excessive load.
- The successful
commissioning and further
smooth build-up in
production at the POX Hub
has
increased the group's
expertise in pressure
oxidation technology,
reducing the risk of failure
due to inexperience.
---------------------------- ----------------------------- --------------------------
Logistic risks, supply The group relies on the - Long-term production High / Stable
shortages and price supply and availability of forecasts and monthly
volatility services and equipment to reviews are in place to plan
run its operations. raw material demand
The key supply management and optimal supply
risks are: schedules.
- Equipment is ordered in
- POX production depends accordance with preapproved
upon third-party CAPEX project schedules and
concentrate which might be there is
subject to an increase a contingency plan in place
in cost or decrease in to prevent possible delays
availability. in delivery.
- Higher electricity costs - The procurement function
or interruption to power evaluates lead times and
supply could have a safety stock levels on a
material impact on monthly basis.
the group's operations. - The group has increased
- The remote locations of stock levels for some key
the group's production spares and consumables to
sites could be a major prevent stockouts
bottleneck in the due to
supply chain. COVID-related constraints.
- High local inflation for
major consumables and
spares might cause an
increase in operational
costs in roubles (without a
concurrent devaluation of
the rouble against the US
dollar).
---------------------------- ----------------------------- --------------------------
Exploration Exploration activities are - The group uses core High / Stable
speculative, time-consuming drilling combined with
and can be unproductive. In modern geophysical and
addition, geochemical exploration
these activities often and surveying techniques.
require substantial The group employs an
expenditure to establish experienced team of
reserves through drilling, geologists with considerable
metallurgical and other regional expertise and
testing, to determine experience. They are
appropriate recovery supported by a network of
processes to extract gold fully accredited
from the ore and to laboratories
construct or expand mining experienced in performing a
and processing facilities. range of assay work to high
Once deposits are standards.
discovered it can take - Group Mineral Resource and
several years to determine Ore Reserve estimates are
whether reserves exist. prepared by a team of
During this time, qualified specialists
the economic viability of following
production may change. As a the guidelines of the JORC
result of these Code 2012. Mineral Resource
uncertainties, the and Ore Reserve estimates
exploration are subject
programmes in which the to regular independent
group is engaged may not reviews and audits.
result in the expansion or - The group employs a team
replacement of of qualified mining
the current production with engineers to undertake mine
new reserves or operations. planning, detailed
open pit and
underground mine design and
production scheduling.
- There is more on the
group's exploration
programme at page 52.
---------------------------- ----------------------------- --------------------------
Development and construction Delays in commissioning - Management and the board Medium / Increasing
projects (including late regulatory are regularly updated on the
approvals) and capital progress, achievement of key
expenditure overruns milestones
for key strategic and and risks
sustaining projects may of projects to ensure they
affect the ability of the are delivered on time, on
group to achieve strategic budget and in line with
goals. Development and approved specifications.
construction projects are - Investment evaluation and
considered increasingly approval processes include
important to the rigorous review of
group's strategy. geological, metallurgical
and financial assumptions to
forecast cash flows and key
project output parameters.
- There is a project
management control framework
in place, with focus on
management of project
critical roles, equipment
delivery deadlines,
contractor management, HSE
regulations, government
permits and approvals.
- In-house construction and
design companies with broad
experience and an excellent
track
record of rampup of
production facilities are
engaged in project
development.
---------------------------- ----------------------------- --------------------------
Financial risks
Gold price risks The company's sales revenue The group constantly High / Stable
is dependent on the price monitors trends in the gold
of one commodity over which price and influencing
it has no factors. To reduce
control and which over the the negative impact of gold
longer-term has been very price volatility on cash
volatile and difficult to flow and financial results,
forecast. Open the following
pit mining offers limited measures are applied:
opportunity to recover - Commodity hedging;
higher grade ore in the - Operating and capital cost
event of substantially reductions; and
lower gold prices. - Deleveraging and careful
capital budgeting.
As at 31 December 2020, the
group had commodities
hedging which comprised zero
cost collars
with a gold price floor of
$1,600/oz and a cap of
$1,832/oz for 3,500oz
maturing every month
until December 2021.
---------------------------- ----------------------------- --------------------------
Currency risks The company's functional - The group aims to limit Medium / Stable
currency is US Dollars its exposure to exchange
primarily dictated by the rates in respect of its USD
gold price being denominated
denominated in US dollars. debt by limiting cash held
At the same time, with in non-USD currencies to
operating assets being in amounts required to meet
Russia, the majority non-USD operating
of capital and operating expenses.
costs are rouble - FX hedging is used to
denominated. limit the impact of
fluctuations in USD/RUB
exchange rate.
- At 31 December 2020, the
group had zero cost collars
with a RUB:USD price floor
of RUB75.00
and a cap in
the range of between
RUB90.65 and RUB100.00 for
US$7.0m maturing every month
until December
2021.
- In the past year the
rouble has depreciated which
is favourable for the group
as it sells
a US dollar denominated
product but bears its main
operating costs in roubles.
---------------------------- ----------------------------- --------------------------
Liquidity risks The group needs access to To mitigate liquidity risks High / Increasing
funding and liquidity to the group:
service and refinance - Maintains a detailed
existing debt, support annual budget and five-year
existing operations strategic plan with monthly
including sustaining & quarterly
capital needs and invest in forecast updates;
new projects and - Prepares weekly treasury
exploration reports and one to three
as and when these months' rolling cash flow
opportunities arise. As the forecasts and
repayment date of the 2022 carefully manages cashflows;
notes approaches, and
the company must be in a - Maintains close
position to re-finance its relationships with potential
repayment obligations. equity and debt providers
and ensures additional
sources of liquidity are
available if required
(including, without
limitation, revolver credit
facilities, forward sales
funding,
etc).
The group is actively
working on refinancing the
2022 notes. Please see page
54 for more information.
---------------------------- ----------------------------- --------------------------
IRC related risks - Funds may be demanded - The company has two Medium / Decreasing
from Petropavlovsk under a representative directors on
guarantee provided in the board of IRC and is
relation to project finance entitled to receive
facilities provided to K&S, certain financial and other
a wholly owned information from IRC on its
subsidiary of IRC. performance and assets:
- A delay in the factors designed
commissioning of Sutara to enable the company to
open pit of K&S mine may monitor IRC's financial
result in a decrease in performance and prospects.
K&S output and affect the - Improvements in iron ore
value of the group's pricing in 2020 have
holding in IRC, and/or its significantly improved IRC's
ability to complete financial position.
its disposal on - IRC has made payment of
commercially acceptable the fees due from it to the
terms. company in respect of the
- A decrease in the price provision
of iron ore could result in of the guarantee for
a 2020.
decrease in the value of - The K&S operation has
the group's shareholding in ramped-up close to full
IRC. capacity.
---------------------------- ----------------------------- --------------------------
Sustainability risks
Health and safety risks Certain of the group's - Health and safety High / Increasing
operations are carried out management systems are in
under place across the group which
potentially hazardous seek to ensure
conditions. Group employees that the
may operations are managed in
become exposed to health accordance with the relevant
and safety risks which may health and safety
lead to regulations and requirements
work-related accidents and and, where possible, with
harm to the group's international best practice.
employees. - The group regularly
These could also result in reviews and updates its
production delays and health and safety procedures
financial loss. to minimise the
risk of accidents and
improve accident response,
including additional and
enhanced technical
measures at all sites,
improved first aid response
and the provision of further
occupational,
health and safety training.
- A new group Head of Health
and Safety was appointed in
early 2021 and is
undertaking a review
of the
group's health and safety
capabilities and resources.
---------------------------- ----------------------------- --------------------------
Environment If the group were to be - The company operates a High / Stable
involved in a major certified environmental
environmental event, such management system at all its
as but not limited to sites which
pollution, potential is designed to
impacts could include fines meet international
and penalties, statutory standards.
liability for environmental - The company has
redemption and other implemented a number of
financial consequences that initiatives to monitor and
might be significant. limit the impact of its
operations on the
environment.
- Cyanide and other
dangerous substances are
kept in secure storages with
access limited to
qualified
personnel and closely
monitored by security staff.
---------------------------- ----------------------------- --------------------------
New diseases and epidemics COVID-19 or other pandemics The group has implemented High / Stable
(including COVID-19) could have a significant measures in each production
impact on the group's location and head office in
business, threatening line with
the health of employees and published guidance. The key
communities. An outbreak of actions are, among others:
the virus might result in - The formation of an
the shutdown emergency response team;
of the mines and plants. mines management monitor and
approve all visits,
including contractor work;
- The provision of PPE to
protect employees
(facemasks, face shields,
gloves, glasses etc),
'no-touch' thermometers,
placement of alcohol-based
sanitizer dispensers and
posters with
information; disinfecting
living and working areas
daily;
- Furnishing medical
facilities with necessary
equipment and medication;
testing of production
employees
and contractors prior to
their transfer to sites with
strict quarantine rules; and
- Employees are encouraged
to participate in free
vaccination programmes.
---------------------------- ----------------------------- --------------------------
Human resource risks A lack of skilled employees - There is an in-house Medium / Stable
and potential loss of key educational capacity such as
personnel could have Pokrovskiy Mining College
negative impact and on-site
on productivity, safety training arrangements;
level and labour cost. - The group develops many HR
initiatives such as career
growth and succession
programs, fair
remuneration
and benefits, employee
turnover rate review,
employee retention
strategies, ongoing
university
recruitment;
- The new CEO has stated
improvements in employment
retention to be one of his
priorities
for the coming year.
---------------------------- ----------------------------- --------------------------
Country and regional risks
Legal & compliance risks - Failure to comply with - There are established High / Increasing
the requirements and terms processes in place to
of licences permitting monitor the requirements of
exploration and the existing licenses
mining may and permits
result in the subsequent and to ensure compliance
termination of operations with such requirements on an
and on-going basis.
reputational damage. - The group has a long track
- Changes in laws record of operating in
concerning foreign Russia, without significant
investments, exploration claims of
and development, taxation, non-compliance with
royalties, statutory or regulatory
currency exchange, gold requirements in the
sales, environment, labour, territory.
repatriation of income and - There are proactive
return of capital compliance monitoring
might procedures in place to
seriously impact the review any new legal
group's operations and initiatives
financial and
results. changes to the current laws.
- The group's business - In cases where the group
tends to be exposed to considers that legal claims
lawsuits would result in a material
and claims from different impact to
counterparties. its financial
- The group has appointed position an estimation of
KPMG and PwC Advisory to such impact is included in
carry out reviews of provisions to the financial
certain transactions statements.
undertaken by - The investigatory work of
the group, including KPMG and PwC Advisory is
pursuant to Resolution 19. ongoing and will be kept
If this under review
investigatory work reveals and reported
that related party as appropriate. A review of
transactions have been compliance and controls
entered into without across the group is a
proper authorisations priority for 2021.
and/or disclosures, there
may be a risk of civil,
criminal or regulatory
actions or enquiries
involving the group and
penalties or other
liabilities may accrue as
a result.
---------------------------- ----------------------------- --------------------------
Political risks - Sanctions introduced in - The group has been Medium / Stable
2014-2020 by the US and vigorously monitoring the
EU against some Russian process of development of
individuals and companies the political situation.
increased political It also relies on the advice
frictions and economic of external counsel in
uncertainty. relation to the
- Further escalation of the interpretation and
sanction rhetoric might implementation
impose a risk to the of new legislation.
group's operations. - Sanctions imposed so far
- In particularly, have neither had a negative
potential changes to USA impact on the group's
Export operations nor
administration regulations on its key
which control, among stakeholders.
others, - The group keeps a safety
the export of US-origin stock of the crucial spare
spare parts might have a parts and is constantly
negative impact on the seeking alternative
group's ability to suppliers
keep up with its equipment locally and around the
maintenance programmes. world.
---------------------------- ----------------------------- --------------------------
3. Subsequent events
The following is extracted in full unedited text from pages of the annual report 2020 as stated below.
Note 31 to the consolidated financial statements of the company page 198
In April 2021, the group signed RUB5 billion (an equivalent of approximately US$67 million) revolving credit facility with Gazprombank valid until May 2022. The following amounts have been drawn down:
- US$10 million, bearing 3.7% interest and repayable within 12 months; and
- US$7 million, bearing 2.9% interest and repayable within 6 months.
Note 11 to the financial statements of the company page 209
On 12 April 2021 it was resolved that the principal subsidiary of the company would distribute a Russian Rouble denominated dividend in the amount of equivalent of US$13.0 million.
4. Related parties
The following is extracted in full unedited text from page 190 of the annual report 2020.
Note 26 to the consolidated financial statements of the company
RELATED PARTIES THE GROUP ENTERED INTO TRANSACTIONS WITH DURING THE REPORTING PERIOD
The Petropavlovsk Foundation for Social Investment (the 'Petropavlovsk Foundation') is considered to be a related party due to the participation of the key management of the group in the board of directors of the Petropavlovsk Foundation. IRC Limited and its subsidiaries (note 33) are associates to the group and hence are related parties since 7 August 2015. Transactions with related parties which the group entered into during the years ended 31 December 2020 and 2019 are set out below.
TRADING TRANSACTIONS
Related party transactions the group entered into that relate to the day-to-day operation of the business are set out below.
SALES TO RELATED PARTIES PURCHASES FROM RELATED
PARTIES
2020 2019 2020 2019
------------- ------------ ----------- ------------
US$'000 US$'000 US$'000 US$'000
------------- ------------ ----------- ------------
Close family
members of
key management
personnel - - 256 4,046 (a)
------------- ------------ ----------- ------------
IRC Limited
and its subsidiaries 85 42 111 5,458 (b)
------------- ------------ ----------- ------------
85 42 367 9,504
------------- ------------ ----------- ------------
(a) In March 2018, the group entered into a transaction with the member of key management personnel to purchase the office building and land, which were subject to an operating lease arrangement. The aggregate consideration paid was an equivalent of c.US$3.2 million. The transaction was completed in February 2019.
(b) On 13 December 2019, the group entered into the sale and purchase agreement with a seller (the "Seller"), a related party of the company, LLC GMMC. Pursuant to the sale and purchase agreement, the group agreed to purchase, and the Seller agreed to sell, a helicopter for a consideration of RUB316.7 million (equivalent to US$5.0 million).
During the year ended 31 December 2020, the group made US$0.3 million charitable donations to the Petropavlovsk Foundation (2019: US$1.0 million).
The outstanding balances with related parties at 31 December 2020 and 2019 are set out below.
AMOUNTS OWED BY RELATED AMOUNTS OWED TO RELATED
PARTIES PARTIES
2020 2019 2020 2019
------------ ------------ ------------ ------------
US$'000 US$'000 US$'000 US$'000
------------ ------------ ------------ ------------
Close family
members of
key management
personnel - - - 759
------------ ------------ ------------ ------------
IRC Limited
and its subsidiaries 3,604 3,651 1,100 5,863
------------ ------------ ------------ ------------
3,604 3,651 1,100 6,622
------------ ------------ ------------ ------------
FINANCING TRANSACTIONS
Guarantee over IRC's external borrowings
The group historically entered into an arrangement to provide a guarantee over its associate's, IRC, external borrowings, the ICBC Facility ('ICBC Guarantee'). As at 31 December 2020 the remaining outstanding contractual guarantee fee was US$0.01 million, which had a corresponding fair value of US$0.01 million (31 December 2019: outstanding contractual guarantee fee of US$5.0 million with corresponding fair value after provision for credit losses of US$4.4 million). In March 2019, IRC has refinanced the ICBC Facility through entering into a US$240 million new facility with Gazprombank ('Gazprombank Facility'). The facility was fully drawn down during the year ended 31 December 2019.
A new guarantee was issued by the group over part of the Gazprombank Facility ('Gazprombank Guarantee'), the guarantee mechanism is implemented through a series of five guarantees that fluctuate in value through the eight-year life of the loan, with the possibility of the initial US$160 million principal amounts guaranteed reducing to US$40 million within two to three years, subject to certain conditions being met. For the final two years of the Gazprombank Facility, the guaranteed amounts will increase to US$120 million to cover the final principal and interest repayments. If certain springing recourse events transpire, including default on a scheduled payment, then full outstanding loan balance is accelerated and subject to the guarantee. The outstanding loan principal was US$204 million as at 31 December 2020 (31 December 2019: US$225 million). Under the Gazprombank Guarantee arrangements, the guarantee fee receivable is determined at each reporting date on an independently determined fair value basis, which for the years ended 31 December 2020 and 2019 was at the annual rate of 3.07% by reference to the average outstanding principal balance under Gazprombank Facility. The guarantee fee charged for 2020 was US$6.7 million, with corresponding value of US$6.3 million after provision for expected credit losses (31 December 2019: US$5.6 million, with corresponding value of US$5.0 million after provision for expected credit losses). As at 31 December 2020 the remaining outstanding contractual guarantee fee was US$12.3 million, with corresponding value of US$11.9 million after provision for expected credit losses (31 December 2019: US$5.6 million, with corresponding value of US$5.0 million after provision for expected credit losses).
The following assets and liabilities have been recognised in relation to the ICBC Guarantee and Gazprombank Guarantee as at 31 December 2020 and 31 December 2019:
31 DECEMBER 2020 31 DECEMBER 2019
US$'000 US$'000
----------------- -----------------
Other receivables
- ICBC Guarantee (a) 7 4,436
----------------- -----------------
Other receivables
- Gazprombank Guarantee
(b) 11,919 4,981
----------------- -----------------
Financial guarantee
contract - Gazprombank
Guarantee (c), (d) 8,232 8,923
----------------- -----------------
(a) The fair value of the receivable, comprising billed fee receivable, less provision for credit losses. Considered Level 3 of the fair value hierarchy which valuation incorporates the following inputs:
- Assessment of the credit standing of IRC and implied credit spread;
- Share price and share price volatility of IRC as at 31 December 2020 and 2019.
(b) Amounts of guarantee fee that are expected to be received from IRC and calculated by applying annual rate of 3.07% for 2020 and 2019 by reference to the average outstanding principal balance under Gazprombank Facility for the relevant the period, less provision for ECL.
(c) Measured in accordance with ECL model: the amount of the loss allowance equals to 12-month ECL as it has been concluded that the credit risk on the financial guarantee contract has not increased significantly since initial recognition (note 3.1.).
(d) Classified as "held for sale" and presented separately in the statement of financial position as at 31 December 2020 (note 3.1.).
The results from relevant re-measurements of the aforementioned assets and liabilities were recognised within Other finance gains and losses and impairments of financial instruments (note 9).
Other financing transactions
In March 2018, the group entered into a loan agreement with Dr. Pavel Maslovskiy. As at 31 December 2020, the loan principal outstanding amounted to an equivalent of US$0.1 million, with corresponding value of US$nil after provision for expected credit losses (2019: US$0.2 million, with corresponding value of US$0.2 million after provision for expected credit losses). Interest charged during the year ended 31 December 2020 comprised an equivalent of US$0.01 million (2019: US$0.01 million). At 10 August 2020, Dr. Pavel Maslovskiy ceased to be a related party.
In April 2019, the group entered into a loan agreement with Dr. Alya Samokhvalova. As at 31 December 2020 the loan principal outstanding amounted to an equivalent of US$0.3 million, with corresponding value of US$nil after provision for expected credit losses (2019: US$0.4 million, with corresponding value of US$0.4 million after provision for expected credit losses). Interest charged during the year ended 31 December 2020 comprised an equivalent of US$0.03 million (2019: US$0.02 million). At 12 October 2020, Dr. Alya Samokhvalova ceased to be a related party.
INVESTING TRANSACTIONS
In May 2019, the group entered into the option contract to acquire the remaining non-controlling 25% interest in the subsidiary LLC TEMI from Agestinia Trading Limited, a non-controlling holder of 25% interest in LLC TEMI, for an aggregate consideration of US$60 million (adjusted to US$53.5 million if certain conditions are met). This represents a related party transaction as it is over the equity of a subsidiary company. The option premium payable is US$13 million, which was paid during the year ended 31 December 2019. The exercise period of the option is 730 days from 22 May 2019.
The group employed an independent third party expert to undertake the valuations of the underlying 25% interest in LLC TEMI and the call option. As at 31 December 2020, the fair value of the derivative financial asset was US$nil million (31 December 2019: US$11.0 million) reflecting a loss on re-measurement to fair value of US$(11.0) million (31 December 2019: US$(2.0) million loss) (note 18).
There are no other related party relationships with Agestinia Trading Limited present.
KEY MANAGEMENT COMPENSATION
Key management personnel, comprising a group of 11 individuals during the period (2019: 14), including executive and non-executive directors of the company and members of senior management, are those having authority and responsibility for planning, directing and controlling the activities of the group.
2020 2019
US$'000 US$'000
Wages and salaries 4,228 5,794
--------- ---------
Pension costs 47 62
--------- ---------
Share-based compensation 33 157
--------- ---------
4,308 6,013
--------- ---------
About Petropavlovsk
Petropavlovsk PLC (LSE: POG. MOEX: POGR) is a major integrated Russian gold producer with JORC
Resources of 19.50Moz Au which include Reserves of 7.16Moz Au. Following its IPO on the Alternative
Investment Market (AIM) in 2002, Petropavlovsk was promoted to the London Stock Exchange in 2009,
where today it is a Premium Listed company and a constituent of the FTSE 250, FTSE 350 and FTSE
All Share indices. The Company's shares also trade on the Moscow Exchange and are a constituent of
the RTS Index and MOEX Russia Index.
Petropavlovsk's key operating mines (Pioneer, Malomir and Albyn) and its Pressure Oxidation (POX) Hub at Pokrovskiy, are located in the Amur Region in the Russian Far East. Petropavlovsk has produced a total of c.8.3Moz of gold since operations began in 1994 and has a strong track record of mine development, expansion and asset optimisation.
Petropavlovsk is one of the region's largest employers and one of the largest contributors to the sustainable development of the local economy.
For more information
Please visit www.petropavlovskplc.com or contact:
Petropavlovsk PLC +44 (0) 20 7201 8900 Patrick Pittaway / Max Zaltsman / Viktoriya TeamIR@petropavlovskplc.com Kim Hudson Sandler +44 (0) 20 7796 4133 Charlie Jack / Katerina Parker / Elfie Petropavlovsk@hudsonsandler.com Kent
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(END) Dow Jones Newswires
May 28, 2021 04:30 ET (08:30 GMT)
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