Sun Group led JV to invest $500 mn in Siberian gold mine

The Dollar Business Bureau

Commodities investor Sun Group announced it signed agreements with a Russian sovereign investment fund, China National Gold Group and a few entities from Brazil and South Africa to invest up to $500 million to develop a gold deposit in Siberia.

An MoU was signed by Sun Group with Russia's Far East and Baikal Region Development Fund, China National Gold Group Corporation, South Africa's Trans Africa Capital and Brazilian investor Antonio de Moraes to develop the Kluchevskoye gold deposit in Chita region in eastern Siberia, it said in a statement here on the sidelines of BRICS summit.

Sun Group is primarily focused on Russia and Ukraine and is owned by the Khemka family group.

The proposed joint venture aims to develop the Kluchevskoye gold deposit into an open pit mine and heap leach operations with an expected production rate of 12 million tonne of ore per year and gold ore production of over 6.5 tonne per annum, the company said. Agreement was signed between the two parties, and the pre-production investment is expected to be $400-500 million, it said.

China National Gold Corporation will own the majority equity interest in the firm and will long-term debt financing for the project.

Russia’s Far East and Baikal Region Development Fund will also be an "important shareholder" in the joint-venture company.