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Kazakh Gold Miner Solidcore Says Past Ties to Russia Cap Debt Options

A worker pushes a cart of raw materials at a Gran Colombia Gold mine in Marmato, Caldas department, Colombia, on Tuesday, June 29, 2021. Colombia's international gross reserves rose to $59b in April, up $125.9m from the month prior. Photographer: Edinson Arroyo/Bloomberg (Edinson Arroyo/Bloomberg)

(Bloomberg) -- Kazakhstan-registered gold miner Solidcore Resources Plc, which split from Russia this year, is considering offering bonds for the first time because its previous ties to Moscow are hurting its ability to receive loans from Western lenders.

“Our Russian past still hinders our onboarding in the Western banks,” Chief Executive Officer Vitaly Nesis said in a phone interview. “The fact that we are still traded on the Moscow Exchange is an insurmountable obstacle for many of them.”

Bonds denominated in US dollars likely aren’t possible, so the company is weighing an offering in yuan, he added. Other forms of financing from China are also being considered, according to Nesis.

Solidcore’s case highlights how toxic Russia has become in the overseas financial world. The miner separated from Russia to build up its operations outside of the heavily sanctioned economy. It re-domiciled from Jersey to Kazakhstan in 2023 and changed its name to Solidcore Resources from Polymetal International Plc this year after selling its U.S.-sanctioned Russian unit, which accounted for 70% of its revenue.

In June the company applied to be delisted from the Moscow Exchange, after the bourse was added to the US sanctions list. The shares are expected to be removed as of Oct. 15, following the exchange’s approval this month, Solidcore said in a statement Friday. The miner now has its primary listing in Astana and its assets are mostly in Kazakhstan. 

Read: Gold Miner Polymetal Looks to Build Back After Russia Sellout

The price of gold, which hit a new record on Friday, helped boost Solidcore’s revenue by 79% in the first half to $704 million, while Ebitda grew 73%. Gold is now trading around $2,580 per ounce.

Whether funding from banks is needed depends on the outlook for bullion, which is hard to predict, according to Nesis. “Psychologically for me the gold price at $2,500 per ounce is still nonsense. That is difficult to comprehend.”

For this reason, the situation with Western lenders is “is greatly worrying,” he said, adding that Solidcore plans to start an “active investment cycle” and is eyeing the acquisition of a new asset in Kazakhstan by the end of the year.

©2024 Bloomberg L.P.