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  • Russian Analysts Obviously Overestimate Sberbank Capital Company'S T

    RUSSIAN ANALYSTS OBVIOUSLY OVERESTIMATE SBERBANK CAPITAL COMPANY'S TRANSACTION ON PURCHASE OF SHARES OF PARAMOUNT GOLD MINING

    arminfo
    Wednesday, July 18, 02:33

    Russian analysts have obviously overestimated Sberbank Capital
    (former Troika Dialog) company's transaction on the purchase of the
    shares of Paramount Gold Mining by determining its value at 40-45 mln
    USD, an expert in the sphere of ore mining industry in Armenia, who
    wished to remain anonymous, told ArmInfo. He said that the Russian
    investment analysts are not so well aware of the peculiarities of
    the Armenian market and do not understand the whole truth of such
    purchase schemes. He pointed out that there are certain moments,
    which allow saying that the transaction was most likely of a purely
    financial nature, and its amount was overestimated at least threefold.

    To recall, it was announced on July 12 that the Russian "Sberbank
    Capital" Ltd (subsidiary of OJSC "Sberbank of Russia") purchased 49%
    of the shares of the company owning the Lusajur gold project in Kotayk
    region of Armenia. The license for development of the Lusajur deposit
    belongs to CJSC "Paramount Gold Mining" registered in Armenia. The
    owner of the shares was an Armenian businessman Tigran Arzakantsyan,
    who sold 49% of the shares to the Russian investor.

    According to ArmInfo's source, the value of such transactions is
    mostly influenced by the level of gold content in the ore and by the
    prime cost of the mine development, which is quite high given the
    closed-type of the development. The source says that the information
    about the estimated 18.5 tons gold reserves in the deposit approved
    by the Soviet documents cannot be complete. These are only estimated
    reserves, which cannot be a base for determining the fair price of
    the package of shares.

    Such transactions on the purchase of companies having licenses for
    prospecting operations in the ore- mining sphere of Armenia are a
    "gold vein" for those possessing them. The provision of licenses was
    intensively carried out in the mid 2000s and today it brings surplus
    profit to the license holders. According to unspecified data, only
    the ex-MP Tigran Arzakantsyan, who, to all appearances, is the sole
    owner of the company only formally, has concluded at least two similar
    transactions with the Russian companies "Alrosa" and "Neva-Rus" over
    the past few years. At that time the matter concerned 10-15 mln USD.

    The source considers that the fact that the portfolio investors have
    purchased a 49% package, which fails to give full control over the
    company, may mean that the transaction on the search of investors is
    not completed and will obviously have its continuation. As "Sberbank
    Capital" is only a portfolio investor, it is not ruled out that
    within the next few years the package of shares of Paramount Gold
    Mining will be resold to a field-specific investor.

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