Polymetal's Kyzyl mine.
JOHANNESBURG (miningweekly.com) – Gold mining company Polymetal has agreed an early termination of the deferred conditional cash consideration related to the 2014 acquisition of the Kyzyl mine, announcing on Friday that it had agreed to pay the current rights holder $10-million in shares.
The initial Kyzyl acquisition agreement comprised an immediate consideration of $618.5-million in cash and Polymetal shares and a deferred conditional cash consideration capped at $500-million.
The additional consideration is dependent on the relative dynamics of the gold price and the price of Polymetal's shares over a period of up to seven years.
Polymetal said that it had now agreed to issue the current rights holder, Sky Tower, 1 015 113 new shares in return for the termination of the additional consideration.
At December 31, the fair value of the contingent consideration liability was estimated at $12-million, the miner added.
"We have taken the opportunity to lock in the deferred consideration at an attractive price for shareholders," said CEO Vitaly Nesis.
"The elimination of the liability is an important step in further de-risking the company's cash flow."
Meanwhile, Polymetal reported that it had completed the sale of its 50% interest in the Dolinnoye gold property to Altynalmas. Polymetal and Dolphinflip in March agreed to transfer their respective 50% interests in the Dolinnoye property for $33.5-million in cash.