Russian giant prepares golden strategy for FTSE 100 entry

Russia's biggest gold mining company Polyus, which will join the London Stock Exchange this month, is finalising a nine-year strategy to wow its new investors.

The board of Polyus believes that several of the company's gold projects are little known among international investors and analysts, and that the strategy document will help increase the company's valuation.

The group is already expected to be valued at $13bn (£8bn) when it completes the reverse takeover of the London-listed KazakhGold.

The strategy, which should be approved by the board this week, will show that at least four mines have moved from the exploration to the development phase.

It will also detail capital expenditure plans on its flagship Natalka mine, including more than $500m to be spent next year ahead of production in 2013.

The document, which will be detailed up to 2015 and broader brush up to 2020, is important in helping Polyus achieve its ambition of admission to the elite FTSE 100. By size, it should be comfortably within the top 50 firms, but to gain what is known as a premium listing Polyus must first improve corporate governance. Another condition is to incorporate the company in the UK – KazakhGold is domiciled offshore in Jersey.

Bank of America Merrill Lynch and JP Morgan are co-ordinating the move to the FTSE index. Polyus aims to present itself for inclusion either at the end of this year or early next. Changes include rejigging the board, so that there are five independent directors who will be of non-Russian origin, while the auditor, Deloitte, is bringing its accounts up to international standards.

FTSE investors are likely to look kindly on a policy that sees Polyus pay out a dividend of at least 25 per cent of its net income each year. Last year, this dividend was 35 per cent and paid out more than $110m to shareholders.

First, though, the company needs to get 95 per cent shareholder approval for its plans for the reverse takeover of KazakhGold by tomorrow. It is on track to make the deadline, although a slight shortfall should still see the deal almost certainly going ahead.

Polyus also has big acquisition plans. It is currently the world's third-biggest gold company measured by reserves but only the 10th biggest in terms of production. Mikhail Prokhorov, the Russian oligarch who owns 37 per cent of Polyus, and his fellow board members have been open about their desire to conclude an acquisition this year or next that will place the company among the elite handful of producers.

Consideration is also being given to a secondary listing, most probably in Toronto, as it has a tradition of hosting mining stocks.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy