Gold Mining in Russia: Perspectives of consolidation in the sector of precious metals mining

The perspectives of consolidation in the sector of precious metals mining and other problems of the industry’s junior companies were discussed at the Russian & CIS Precious Metals Summit 2014 in Moscow on February 11th-13th.

According to Citi, the main prerequisites of the process re complicated conditions in the sector, which force the companies to merge, as well as significant potential synergy due to division of infrastructure costs.

In addition, the decrease in gold prices force the projects owners to reduce the expectations of their business assessments that makes the negotiations much easier.

According to Citi, there are 26 companies at the junior stage or working at a single deposit in Russia and the CIS states. They are the potential participants of the process. The current market conditions is a direct threat to the activity of geological exploration companies, which don’t have projects at the production stage because of limited possibilities of the attraction of capital , but as for investors – this is good opportunity for them to receive good assets at relatively low price.

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