Bema news on Russia project
<Bema Gold/Russian Proj: Kupol Gold Prospect >BGO
Wednesday December 18, 9:29 am ET
MOSCOW (Dow Jones)--Canadian mining company Bema Gold Corp. has agreed to buy a 75% interest in the Kupol gold prospect in the far east of Russia, the provincial government of Chukotka said late Tuesday.
The company will pay $27.5 million in three instalments over the next two years for 40%, and will receive the final 35% once a study into the value of the deposits has been completed and payment of $5.00 per ounce made for 75% of proven and probable gold reserves identified in the study. An additional payment equal to $5.00 per ounce for 75% of proven and probable gold reserves will be made when it starts constructing its first mine.
The Kupol prospect is located 200 kilometers east of Chukotka's second-largest city, Bilibino. The site has already been studied by Russian geologists and holds an estimated 835,000 ounces of gold and 9.4 million ounces of silver, the Chukotka government said.
Bema intends to deliver camps, drilling rigs, and supplies to the site over the winter and begin exploration work in spring 2003.
The deal is the first-ever substantial foreign investment in the province of Chukotka, which faces Alaska across the Bering Straits. The governor of Chukotka is Roman Abramovich, the largest shareholder in fast-growing oil company OAO Sibneft and half-owner of OAO Russian Aluminum, the world's second- largest aluminum producer. Both stakes are held indirectly.
"We believe that the very balanced structure of this deal proves that this region is truly open for business," Abramovich said.
"In the near future, we plan to hold a similarly open, transparent tender to find a private-sector partner for commercial development of the Maiskoye gold deposit."
The Maiskyoe deposit is expected to attract the interest of OAO Norilsk Nickel (R.GMK), Russia's largest mining company, which wants to make gold production one of its core businesses alongside the mining of platinum group metals and nickel.
-By Geoffrey T. Smith, Dow Jones Newswires;(+7 095) 974 8055; geoffrey.smith@ dowjones.com>
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