Sale of Darasunsky Rudnik
Highland Gold Mining Limited (“Highland Gold”, or the “Company”) announces that its wholly owned subsidiary, Stanmix Holding Limited, has entered into a conditional agreement for the sale of the Darasun, Teremky and Talatui Mines (“the Mines”) in the Chita region of Russia. On 7 August 2007 an agreement was entered into between Stanmix Holding Limited and OJSC Uzhuralzoloto Group of Companies, a company incorporated under the laws of Russia (“the Purchaser”) whereby the Purchaser will acquire the whole of the share capital of OOO Darasunsky Rudnik, the owner of the Mines, for a total consideration of US$25 million. The consideration will be satisfied by the payment of US$3 million in cash, which shall be paid on completion of the transaction, and the repayment by OOO Darasunsky Rudnik of US$22 million of its indebtedness due to Stanmix Investments Limited of which US$12 million shall be repaid by the end of 2007 and US$10 million shall be repaid on 1st March 2008.
The agreement is subject to satisfaction of certain conditions precedent, the principal one being the obtaining of Russian anti-monopoly approval by the Purchaser. The various conditions precedent will be satisfied as soon as practicable following which the transaction will then be completed. It is anticipated that this transaction will be completed by the end of 2007 at the latest.
Following a non-cash impairment charge of US$79.3 million the net book value of the Mines being sold as at 31 December 2006 was US$2.5 million. This net book value excludes US$5.2 million of provisions for royalties and fire related costs as these liabilities will remain with Highland Gold once the disposal of Darasun has been completed. The after-tax loss attributable to the Mines during the 2006 financial year was US$108.5 million, which includes the non-cash impairment charge of US$79.3 million and a US$2.4 million exceptional charge for one-off costs directly associated with the fire at the Mines.
A further announcement will be made following completion of the transaction.
Commenting on today's announcement, Henry Horne, Managing Director said: “As we advised earlier we have proceeded with divesting the Darasun asset in order to prioritise and focus on our other important development projects, including those which the Company is currently developing in the same Chita region. Notwithstanding this transaction we remain committed to helping those family members who suffered from the terrible fire in September 2006 and we will complete our various programmes of support for the Darasun community.”
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|For further information please contact:|
|Henry Horne, Managing Director
Dmitry Yakushkin, Director of Communications Moscow: + 7 (495) 777 31 55
Head of Investor Relations
London: +44 (0) 207 851 64 00
Or, WMC Communications,
Alex Glover on +44 20 7930 9030