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. Last Updated: 07/27/2016

Foreign Bid Nullified for Dukat Mine

Russia's Federal Property Fund, the vendor of state property, has ruled that a domestic mining company will acquire a 49 percent stake in the country's largest silver mine, Interfax reported Monday.

It reported that Vancouver-based Pan American Silver Corp -- declared in April the winner of an official tender for the Dukat silver mine -- was not the victor, and the unknown Magadan Gold-Silver Company would acquire the stake.

Pan American could not be reached for immediate comment. A company spokesman said last week that it was continuing to negotiate a purchase agreement for the mine.

Quoting an unnamed property fund official, Interfax reported that the fund had signed a protocol confirming the Russian regional company as the winner replacing Pan American. It gave no reason for the decision.

Magadan Gold-Silver had offered to invest $78 million in the mine, Interfax said, compared to Pan American's offer of $302.6 million.

Located in the northeast Siberian Magadan region, the Dukat mine accounts for about two-thirds of Russia's unmined silver reserves.

The mine has gone through a tortuous privatization process that has seen tenders called and cancelled in recent years.

Interfax put proven reserves at the mine -- the largest of its kind in the former Soviet Union -- at 15,000 metric tons of silver and at least 35 tons of gold.