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. Last Updated: 07/27/2016

Firm Eyes Kamchatka Gold Mine

Trans-Siberian Gold will shortly complete the $40 million sale of two subsidiaries to AngloGold Ashanti to raise funds for its gold-mining project on the remote Kamchatka Peninsula.

Trans-Siberian CEO Oleg Bagirov said Wednesday that the sale would cover more than half of the $70 million required to launch the Asacha project on Kamchatka by the end of 2008.

He said he expected approval from the Federal Anti-Monopoly Service, the only remaining obstacle to the sale, by July 1.

"We want to work first with this finance. After that, we have two possible sources for additional finance: our shareholders and bridge financing," Bagirov said.

The country holds gold reserves second only to South Africa's but the it ranked sixth in terms of output last year. Gold has risen 40 percent in value in the last two years as investors flock to commodities.

Trans-Siberian had invested $37 million developing Asacha to the end of January 2007. Its license requires production of gold to start by the end of 2008.

The company said in March that it planned to produce 40,000 ounces in 2009 by treating 100,000 tons of ore. This would rise in 2010 to 60,000 ounces from 140,000 tons of ore.

Trans-Siberian's London-listed shares have halved in value in the last 12 months. Standard Bank withdrew a mandate last year to provide project finance of up to $50 million for Asacha.

The two companies being sold by Trans-Siberian -- Amikan and Angarskaya Proizvodstvennaya Kompania -- are based in the Siberian region of Krasnoyarsk. They own the Veduga and Bogunai deposits respectively.

AngloGold Ashanti has said it will transfer the projects to its development and exploration joint venture with Polymetal, the country's third-largest gold and top silver miner.

Trans-Siberian said in a statement Wednesday that one of two remaining conditions to the sale -- an amendment to the mining license at Veduga -- had been approved by the Federal Subsoil Resource Use Agency.