Russian billionaire Alexey Mordashov’s gold mining company is positioning for a price recovery by buying more assets, defying an industry trend of cutbacks and closures.
Besides expanding existing mines in Russia, Nordgold NV is looking for early-stage projects that improve its reserve base, Chief Executive Officer Nikolai Zelenski said in an interview Monday from the Denver Gold Forum.
While the world’s biggest producers including Barrick Gold Corp. and Newmont Mining Corp. sell assets and cut spending in a bid to contain debt levels exposed by gold’s more than 40 percent plunge from a 2011 peak, Moscow-based Nordgold sees the downturn and the ensuing drop in valuations as a good time to buy.
“That’s why we’ve been making deals in the recent past and we plan to continue to do so in the future,” Zelenski said.
Nordgold is interested in the Sukhoi Log deposit, considered one of Russia’s largest fields with resources of about 1,953 tons of gold. The government plans to sell the licenses for the Siberian deposit next year.
“It’s huge,” Zelenski said. “We would be certainly interested to look at it.”
His upbeat outlook for gold prices is partly driven by expectations that the industry’s cutbacks and focus on cash generation is foreshadowing a decline in production in the coming years.
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