Highland Gold buys another Russian gold mine

The assets include the operating Valunisty gold mine and 31,000 ounce per annum processing plant and two large licence areas, Kanchalano-Amguemskaya Square (KAS) and Kayenmivaam.

At January 1, the JORC proven and probable ore reserves of Valunisty and KAS were 3.4 million tonnes at 5.1g/t gold equivalent and their indicated and inferred mineral resources were 17.6Mt at 3g/t Au equivalent.   

Around $78.7 million of the total will comprise of 38.6 million ordinary shares, with the $12.3 million balance assumed as net debt.

The purchase is expected to be completed by the end of 2018 and is subject to approval from shareholders, Russia's Federal Antimonopoly Service and the Foreign Investment Advisory Council.

CEO Denis Alexandrov said the acquisition added a fourth operating mine to the company's portfolio and upside potential in the KAS licence area, with both in a familiar region with existing infrastructure.

Highland already owns the Kelura and Klen development projects in the Chukotka region.

"The transaction is structured in such a way as to be immediately value-accretive to the benefit of all our shareholders," he said.