Norilsk Nickel has approved the sale of a stake of up to 39.32% in its Bystrinskiy copper-gold project to CIS Natural Resources Fund, a Russia-focused natural resources fund established by Interros Group and ESN Group, the Russian metals producer said Wednesday.
The Bystrinsky deposit in Russia's Chita region is one of the world's largest in terms of copper, gold, silver and iron reserves. The Bystrinsky mining and processing plant is scheduled to produce and process 10 million mt/year of ore on reaching full capacity in 2018.
As a basis for the transaction, the project is being valued at $730 million on a 100% equity basis that corresponds to the valuation used for the acquisition of a 10.67% stake in the project by Highland Fund, a group of Chinese investors, in June 2016, the company said.
"Divestment of an additional stake in Bystrinskiy project is fully in line with our corporate strategy of de-risking the project and 'clustering' our operations outside of core production chain. We welcome a major capital commitment from large strategic investors to the project amid volatile and challenging commodity markets," said Sergey Malyshev, Nornickel senior vice president and CFO, in a statement.
The transaction will be subject to a right of first refusal by Highland Fund, as well as certain other pre-conditions and necessary regulatory approvals, and is expected to close by the end of 2017, Nornickel said.
Following the closing of the transaction, Nornickel will retain a stake of above 50% and remain the operator of the project.
