Announcement of sale of Georgian Assets

Posted on Jun 14, 2012 in Company news, News and Press releases

Announcement of sale of Georgian Assets

14 June 2012, Moscow

Русский 

GeoProMining (“GPM” or the “Company”) today announces that on June 14, 2012 it has completed the sale of GPM Georgia BV that represents the sale of two Georgian companies Madneuli and Quartzite for a total cash consideration of US$120m.

GPM acquired both the Georgian copper-gold mining company Madneuli and the gold mining company Quartzite in 2005 with the goal of becoming a leading gold producer in the Caucasus region. Such strategy has been successfully executed and these businesses have demonstrated growth in annual production of five times under GeoProMining’s management. The divestiture is a direct result of the Company decision to consider its strategic options for these entities following the recent tender organized by the Georgian government where Madneuli’s mining license was tendered and acquired by a company not affiliated with GPM, effective from May 2014. GeoProMining considers the divestiture as in the best interests of its shareholders. The transaction will enable GPM to focus its regional growth strategy on its subsidiaries in Armenia, namely GPM Gold and the Agarak copper-molybdenum mine complex, and on its antimony-gold assets in Russia, whilst at the same time substantially strengthening the Company balance sheet.
GeoProMining’s CEO, Roman Khudoliy, commented on the divestiture: “We have been working for the past few months to monetize our Georgian presence and are pleased to announce the successful conclusion of these efforts. Our key business priority is to now complete the expansion of the Albion processing facility at the Ararat facility in Armenia, which will transform GPM Gold into a world class asset, and support our multi-year growth expectations.”
GeoProMining’s Senior Vice-President, Sergei Nossoff, added: “This is a new beginning for GeoProMining and an opportunity to focus on developing very promising projects in both Armenia and Russia and in addition, to look at opportunities in new regions for GPM. We believe our unique combination of gold-copper-antimony projects in the CIS region is unmatched in the mining industry and we can use this combination as leverage and foundation for future growth.”
VTB Capital acted as financial advisor on the transaction and Clifford Chance acted as legal advisor to GeoProMining.

Press contacts:

Natalia Yanborisova

Tel: +7 (495) 232 6120

Email: ny@geopromining.com

Notes to editors

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets.