Russian gold miner Uzhuralzoloto plans Moscow IPO this year

Reuters | October 16, 2023 | 7:38 am Markets Europe Russia and Central Asia Gold 

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Russian gold mining group Uzhuralzoloto (UGC) is preparing for an initial public offering (IPO) before the end of this year, three financial market sources told Reuters, joining a handful of companies eyeing small market debuts.

Russian share listings on Moscow Exchange have been few and far between since Russia sent its troops into Ukraine in February 2022, and are generally characterised by small volumes and dependent on Russian investors after an exodus of Western capital.

UGC, which is almost fully owned by businessman Konstantin Strukov, said in an email to Reuters on Tuesday it was “considering various strategic development options, including opportunities on capital markets, but it is premature to speak about specific plans”.

One of the sources said the IPO volume would be “within the current market parameters”, implying a deal value of a few billion roubles.

Technology company Astra last week raised 3.5 billion roubles ($36 million) in an IPO on Moscow Exchange, pricing shares at the upper end of its range in a debut taken up by retail investors.

But demand from investors for Astra’s listing exceeded supply by more than 20 times at the upper end of the price range and its shares were up 21% on Monday, leading Moscow Exchange to hold a discrete auction, a tool used to try and ease extraordinary volatility and allow a base price for the security to form.

That performance has raised hopes that larger listings may be possible, one investment banking source said.

“I hope everyone realizes there is some money to be made,” said the banker, who asked not to be identified. “It turns out that interesting companies can be sold.

“People who wanted a deal worth 10-15 billion roubles will be more relaxed.”

UGC, which has assets in the Ural region and further east in Siberia, is the sixth largest gold producer in Russia, according to estimates in its annual report. It produced 14.3 tonnes of gold in 2022 and made revenues of 29.1 billion roubles in the first half of this year.

The company says it aims to become Russia’s third-largest gold producer, mining at least 25 tonnes annually, by 2026.

($1 = 97.1170 roubles)

(By Olga Popova, Anastasia Lyrchikova and Alexander Marrow; Editing by Mark Trevelyan and Miral Fahmy)