Russian Miner Nordgold Postpones London IPO Amid Gold Volatility

Russian miner Nord Gold Plc said it will postpone an initial public offering in London and Moscow, citing market uncertainty and swings in the gold price.

Ocean Management Ltd., an investment vehicle owned by billionaire Alexey Mordashov and his sons Kirill and Nikita, planned to sell about 25% of the miner’s shares in London and Moscow this month. However, gold tumbled the most in 15 months last week after the Fed brought forward projected rate hikes at its most recent policy meeting.

“Recent central bank comments indicating an acceleration in expected interest rate rises have created significant uncertainty and volatility in the resources sector, in particular impacting gold and gold equities,” said Chief Executive Officer Nikolai Zelenski. “Nordgold has determined that it would therefore not be sensible to pursue an IPO at this particular juncture.”

The IPO would have been the first in London by a Russian miner since Polyus PJSC raised about $800 million in the City and Moscow in 2017. Investor interest in gold rose after prices hit a record last year, though bullion’s subsequent decline led GV Gold PJSC to put its planned share sale on hold indefinitely in March.

The miner, controlled by the family of Mordashov, has operations in West Africa, Kazakhstan and Russia. It delisted from the London bourse in 2017 after the board said it wasn’t fairly valued by investors.

Nordgold is seeking to increase output by 20% in the next five years, mostly by expanding gold projects in Yakutia.

Bacchus Capital Advisers is acting as financial adviser on the IPO, while Citigroup Inc. is sponsor for the offer. Citigroup, JPMorgan Chase & Co. and VTB Capital are the joint global coordinators and bookrunners for the sale.

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