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. Last Updated: 07/27/2016

GV Gold Plans IPO to Fund Output Rise

GV Gold, Russia's eighth-largest gold miner, plans to raise about $200 million in a share listing in London and Moscow next month that will help boost output at its Siberian mine, a source close to the deal said Wednesday.

GV said in a statement that it had hired Credit Suisse as sole global coordinator and bookrunner for the initial public offering, which will comprise existing shares and a capital raising. Troika Dialog is co-lead manager of the IPO.

"The initial public offering should enhance the international recognition of the company as well as contribute to the company's further growth," GV chairman Sergei Dokuchayev said.

"This will be especially important to our strategic plans to increase gold production and ensure the stable growth of gold processing," he said.

Russian metals firms, encouraged by a commodities boom that saw gold gain over 20 percent in value last year, have flocked to the stock market, with Severstal, Chelyabinsk Zinc and TMK all conducting IPOs in late 2006.

Six Russian citizens, including Dokuchayev and CEO Sergei Vasilyev, directly or indirectly own more than 90 percent of GV. The main owners have a banking background, a source close to the company said.

The company, which said the IPO would take place in the first quarter of 2007, declined to say how large a stake would be offered or how much it planned to raise.

The source close to the offering said GV was targeting early February, with the IPO road show scheduled to begin on Jan. 22. A new share issue would account for between 10 and 20 percent of the total offer, the source said.

GV said it produced 2.7 tons, or 86,967 ounces, of gold last year at its Golets Vysochaishy mine in the Irkutsk region of eastern Siberia.

The country's largest gold miner, Polyus Gold, produces over 1 million ounces annually. Polymetal, which also intends to float in the first quarter, produced 185,900 ounces of gold in the first nine months of 2006.

GV was founded in 1998 by Lenzoloto -- later acquired by Polyus -- and Lanta-Bank, a commercial bank active in the Russian precious metals market.

The company produced its first gold three years later, and construction of the processing plant was completed in 2004.

GV said its processing plant had capacity to handle 1.3 million tons of ore per year.

Tatyana Demianova, GV's head of investor and public relations, said the company planned to raise gold output to 5 tons by 2009 -- 85 percent more than last year.

"By 2013, we intend to open a new mining and beneficiation plant with a capacity of up to 4 tons, therefore increasing the total gold production volume to 9 tons," she said.