Polymetal: Investment to gain 9.1% stake in Tomtor (1001289)

 
 Polymetal International plc (POLY) 
Polymetal: Investment to gain 9.1% stake in Tomtor 
 
19-March-2020 / 10:00 MSK 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY 
Date         19 March 2020 
 
Polymetal International plc 
 
           Investment to gain 9.1% stake in Tomtor 
 
 Polymetal is pleased to announce that it has entered into a legally binding 
  agreement to invest US$20 million in exchange for a 9.1% stake in ThreeArc 
Mining Ltd. (ThreeArc). ThreeArc owns 100% of the world-class Tomtor niobium 
           and rare-earth metals project (Tomtor). 
 
           TRANSACTION DETAILS 
 
? Polymetal to acquire a 9.1% stake in ThreeArc, 100% owner of the Tomtor 
project, through a US$ 20 million cash investment into newly issued share 
capital. 
 
? The pre-money enterprise value is estimated at US$ 259 million. 
 
? The proceeds will be used to complete the Tomtor Pre-Feasibility Study 
and initial JORC-compliant Ore Reserve and Mineral Resource Estimate. 
 
? Pursuant to FCA Listing Rule 11.1.10R this transaction is classified as 
a smaller related party transaction as ICT Holding Ltd. (ICT), a 
substantial shareholder of Polymetal International plc, is also the 
majority owner of ThreeArc , and this announcement is made in accordance 
with Listing Rule 11.1.10R (2)(c). 
 
? The completion of the transaction will take place upon the statutory 
registration procedure, which is expected to occur before the end of 
March. 
 
    "Investment in Tomtor provides us with a high-quality exposure to the EV 
   revolution by establishing strategic beachhead in the Nb and REE markets. 
  Our capital injection and our engineering expertise will be key in driving 
   the project forward. We intend to consider any further potential steps of 
Polymetal's engagement with the asset after the completion of JORC-compliant 
           reserve estimate", said Vitaly Nesis, Group CEO of Polymetal. 
 
           ABOUT TOMTOR 
 
Tomtor is located in the north-west of Yakutia. It is one of the largest and 
highest grade rare earth elements (REE) projects in Russia and considered to 
   be the highest grade development stage niobium (Nb) project globally. The 
  deposit was discovered in 1977 with initial statutory reserves approved in 
   1999. In 2013, ICT established ThreeArc which acquired the Tomtor license 
 subsequently. In 2018, statutory PFS and updated GKZ reserves were approved 
 totalling 30.5 Mt of ore at 4.0% Nb2O5[1]+10.6% REO[2] grade containing 1.2 
           Mt of Nb2O5 and 3.2 Mt of REO. 
 
        The project is comprised of the Tomtor open-pittable deposit and the 
  Krasnokamensk Hydromet Facility (KHF) which will be built near the town of 
 Krasnokamensk. Krasnokamensk, located in South-Eastern Siberia close to the 
     border with China, is the location of Russia's largest uranium mine and 
           associated processing and tailings storage infrastructure. 
 
           STRATEGIC RATIONALE FOR THE TRANSACTION 
 
     The project envisions the following advantages which fits well with the 
           Company's strategy: 
 
? High-grade 
 
? Large 
 
? Long-lived 
 
? Exposure to green technology with significant potential to contribute to 
active climate change management 
 
? Leveraging Polymetal's leading technical capabilities in hydrometallurgy 
and already established regional presence in Yakutia 
 
           NIOBIUM AND REE MARKET 
 
      Niobium is a soft, rare, transition metal. Nearly 90% of the Nb demand 
   structure is represented by high-strength low-alloy steel (HSLA) which is 
       mostly used in construction as a strengthening sustainable component, 
   automotive industry to strengthen and reduce weight of a car elements and 
       aerospace and defense sector to offer creep strength in super alloys. 
 
    Niobium is a relatively scarce resource and there are only three primary 
      niobium mines in the world today, two in Brazil and one in Canada, but 
         growing demand has created a global market value of more than US$ 2 
  billion[3]. World reserves of Nb are estimated at over 9 Mt. Nb prices are 
    far less volatile than most REEs' which are mostly produced in China and 
   have been exposed to supply constraints during the last 10 years while Nb 
           has been stable. 
 
   The global rare earth elements market was valued at US$ 2.2 billion[3] in 
          2019 with the most of the value coming from NdPr. NdPr are used in 
     high-strength magnets in motors in electric vehicles, wind turbines and 
           electronic devices and autocatalysts. 
 
   Tomtor is expected to become an alternative source of FeNb and rare earth 
  elements for the growing markets of high-strength steel, permanent magnets 
    and electronics, all critical for modern green-tech technology. Domestic 
demand for FeNb is expected to demonstrate robust growth, thanks to Russia's 
growing steel production, while since domestic REE demand is limited, Tomtor 
          should become a significant supplier of REEs to the global market. 
 
           About Polymetal 
 
Polymetal International Plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its 
      subsidiaries - "Polymetal", the "Company", or the "Group") is a top-20 
      global gold producer and a top-5 global silver producer with assets in 
     Russia and Kazakhstan. The Company combines strong growth with a robust 
           dividend yield. 
 
           About Morgan Stanley 
 
  Morgan Stanley & Co. International plc acted as sole sponsor and financial 
   advisor to Polymetal and to no one else. In connection with such matters, 
      Morgan Stanley and their respective directors, officers, employees and 
       agents will not regard any other person as its client, nor will it be 
    responsible to anyone other than Polymetal for providing the protections 
    afforded to their clients or for providing advice in connection with the 
    matters described in this announcement or any matter referred to herein. 
 
           Enquiries 
 
Media                     Investor Relations 
 
FTI          [phone]  Polymetal [e-mail] 
Consulting   1000 
 
                          Evgeny    [phone] (UK) 
Leonid Fink               Monakhov 
 
Viktor                    Timofey 
Pomichal                  Kulakov 
 
                                    [phone] (Russia) 
 
                          Kirill 
                          Kuznetsov 
 
Joint Corporate Brokers 
 
Morgan       [phone]  RBC       [phone] 
Stanley &    8000         Europe 
Co.                       Limited 
Internationa 
l plc 
 
                          Marcus 
                          Jackson 
Andrew 
Foster 
 
                          Jamil 
                          Miah 
Richard 
Brown 
 
             [phone] 
             2500 
Panmure 
Gordon 
 
James 
Stearns 
 
Forward-looking statements 
 
       This release may include statements that are, or may be deemed to be, 
"forward-looking statements". These forward-looking statements speak only as 
        at the date of this release. These forward-looking statements can be 
   identified by the use of forward-looking terminology, including the words 
         "targets", "believes", "expects", "aims", "intends", "will", "may", 
   "anticipates", "would", "could" or "should" or similar expressions or, in 
each case their negative or other variations or by discussion of strategies, 
plans, objectives, goals, future events or intentions. These forward-looking 
      statements all include matters that are not historical facts. By their 
    nature, such forward-looking statements involve known and unknown risks, 
 uncertainties and other important factors beyond the company's control that 
  could cause the actual results, performance or achievements of the company 
 to be materially different from future results, performance or achievements 
           expressed or implied by such forward-looking statements. Such 
  forward-looking statements are based on numerous assumptions regarding the 
     company's present and future business strategies and the environment in 
which the company will operate in the future. Forward-looking statements are 
     not guarantees of future performance. There are many factors that could 
   cause the company's actual results, performance or achievements to differ 
     materially from those expressed in such forward-looking statements. The 
company expressly disclaims any obligation or undertaking to disseminate any 
  updates or revisions to any forward-looking statements contained herein to 
 reflect any change in the company's expectations with regard thereto or any 
  change in events, conditions or circumstances on which any such statements 
           are based. 
 
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[1] Niobium oxide 
 
[2] Rare earth oxides. Mainly NdPr Oxides: Pr6O11 (Praseodymium oxide) and 
Nd2O3 (Neodymium oxide) 
 
[3] As per Roskill 
 
ISIN:          JE00B6T5S470 
Category Code: MSCM 
TIDM:          POLY 
Sequence No.:  53287 
EQS News ID:   1001289 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

March 19, 2020 03:00 ET (07:00 GMT)