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. Last Updated: 07/27/2016

Gold Firm Unveils a $300M IPO

LONDON -- Highland Gold Mining Ltd., owner of Russia's fourth-biggest gold mine, unveiled plans for a $300 million flotation Monday, which would make it the second-biggest company on London's Alternative Investment Market, or AIM.

The British-based firm said it planned to raise up to ?22.5 million ($35 million) by placing shares with investors in order to fund efficiency improvements at its main Mnogovershinnoye mine in eastern Russia, as well as reduce debt.

Chairman Peter Daresbury said Highland had chosen AIM over the main London Stock Exchange because of its strong mining community.

"There are about 50 miners on AIM, and we felt it was better for our investors to be at the top of that pile rather than a mid-cap [on the main market]," he said in a telephone interview.

Highland expects to produce around 175,000 ounces of gold from Mnogovershinnoye this year, and believes the mine has reserves of around 3 million ounces.

The firm hopes to be producing a further 160,000 ounces per year by 2004 from its Darasun and Novoshirokinskoye projects, also in eastern Russia, Daresbury said. Including its development projects, Highland believes it has reserves of about 8.0 million ounces of gold and gold equivalents.

The firm, whose shareholders include South Africa's Harmony Gold, expects trading in its shares to start on Dec. 18.

Russia's gold output is expected to reach 174 tons to 175 tons this year, compared to 154.3 tons in 2001.