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RUSSIAN ANALYSTS OBVIOUSLY OVERESTIMATE SBERBANK CAPITAL COMPANY'S TRANSACTION ON PURCHASE OF SHARES OF PARAMOUNT GOLD MINING
arminfo
Wednesday, July 18, 02:33
Russian analysts have obviously overestimated Sberbank Capital
(former Troika Dialog) company's transaction on the purchase of the
shares of Paramount Gold Mining by determining its value at 40-45 mln
USD, an expert in the sphere of ore mining industry in Armenia, who
wished to remain anonymous, told ArmInfo. He said that the Russian
investment analysts are not so well aware of the peculiarities of
the Armenian market and do not understand the whole truth of such
purchase schemes. He pointed out that there are certain moments,
which allow saying that the transaction was most likely of a purely
financial nature, and its amount was overestimated at least threefold.
To recall, it was announced on July 12 that the Russian "Sberbank
Capital" Ltd (subsidiary of OJSC "Sberbank of Russia") purchased 49%
of the shares of the company owning the Lusajur gold project in Kotayk
region of Armenia. The license for development of the Lusajur deposit
belongs to CJSC "Paramount Gold Mining" registered in Armenia. The
owner of the shares was an Armenian businessman Tigran Arzakantsyan,
who sold 49% of the shares to the Russian investor.
According to ArmInfo's source, the value of such transactions is
mostly influenced by the level of gold content in the ore and by the
prime cost of the mine development, which is quite high given the
closed-type of the development. The source says that the information
about the estimated 18.5 tons gold reserves in the deposit approved
by the Soviet documents cannot be complete. These are only estimated
reserves, which cannot be a base for determining the fair price of
the package of shares.
Such transactions on the purchase of companies having licenses for
prospecting operations in the ore- mining sphere of Armenia are a
"gold vein" for those possessing them. The provision of licenses was
intensively carried out in the mid 2000s and today it brings surplus
profit to the license holders. According to unspecified data, only
the ex-MP Tigran Arzakantsyan, who, to all appearances, is the sole
owner of the company only formally, has concluded at least two similar
transactions with the Russian companies "Alrosa" and "Neva-Rus" over
the past few years. At that time the matter concerned 10-15 mln USD.
The source considers that the fact that the portfolio investors have
purchased a 49% package, which fails to give full control over the
company, may mean that the transaction on the search of investors is
not completed and will obviously have its continuation. As "Sberbank
Capital" is only a portfolio investor, it is not ruled out that
within the next few years the package of shares of Paramount Gold
Mining will be resold to a field-specific investor.
arminfo
Wednesday, July 18, 02:33
Russian analysts have obviously overestimated Sberbank Capital
(former Troika Dialog) company's transaction on the purchase of the
shares of Paramount Gold Mining by determining its value at 40-45 mln
USD, an expert in the sphere of ore mining industry in Armenia, who
wished to remain anonymous, told ArmInfo. He said that the Russian
investment analysts are not so well aware of the peculiarities of
the Armenian market and do not understand the whole truth of such
purchase schemes. He pointed out that there are certain moments,
which allow saying that the transaction was most likely of a purely
financial nature, and its amount was overestimated at least threefold.
To recall, it was announced on July 12 that the Russian "Sberbank
Capital" Ltd (subsidiary of OJSC "Sberbank of Russia") purchased 49%
of the shares of the company owning the Lusajur gold project in Kotayk
region of Armenia. The license for development of the Lusajur deposit
belongs to CJSC "Paramount Gold Mining" registered in Armenia. The
owner of the shares was an Armenian businessman Tigran Arzakantsyan,
who sold 49% of the shares to the Russian investor.
According to ArmInfo's source, the value of such transactions is
mostly influenced by the level of gold content in the ore and by the
prime cost of the mine development, which is quite high given the
closed-type of the development. The source says that the information
about the estimated 18.5 tons gold reserves in the deposit approved
by the Soviet documents cannot be complete. These are only estimated
reserves, which cannot be a base for determining the fair price of
the package of shares.
Such transactions on the purchase of companies having licenses for
prospecting operations in the ore- mining sphere of Armenia are a
"gold vein" for those possessing them. The provision of licenses was
intensively carried out in the mid 2000s and today it brings surplus
profit to the license holders. According to unspecified data, only
the ex-MP Tigran Arzakantsyan, who, to all appearances, is the sole
owner of the company only formally, has concluded at least two similar
transactions with the Russian companies "Alrosa" and "Neva-Rus" over
the past few years. At that time the matter concerned 10-15 mln USD.
The source considers that the fact that the portfolio investors have
purchased a 49% package, which fails to give full control over the
company, may mean that the transaction on the search of investors is
not completed and will obviously have its continuation. As "Sberbank
Capital" is only a portfolio investor, it is not ruled out that
within the next few years the package of shares of Paramount Gold
Mining will be resold to a field-specific investor.