“US Sanctions List Hits Gold Mining Companies: Polymetal and Polyus Shares Fall”

Shares of gold miners fell after their inclusion in the US SDN list

The US Treasury has expanded the list of anti-Russian sanctions. Polymetal’s securities on the Moscow Exchange fell by more than 12% after the announcement that the company was included in the sanctions list of JSC Polymetal. Polyus shares lost more than 4%

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Shares of gold miners Polymetal and Polyus fell amid their inclusion in the US sanctions list. At the auctions of the Moscow Exchange as of 18:11 Moscow time, Polymetal (POLY) securities lost 10% and fell to ₽587.4 per security. The shares of Polyus fell by 3.9% to ₽9939.

At the low, securities of the gold mining company Polymetal fell by 12.4% to ₽573.8 per security. Polyus shares lost 4.7% to ₽9850.

Sales in the securities of the gold mining company were observed after the news that the US OFAC contributed AO Polymetal to the sanctions list. The list also includes the gold mining company Polyus and its subsidiaries, UK Polyus, Polyus Service, Polyus Aldan and Polyus Krasnoyarsk. The Office of Foreign Assets Control of the Ministry of Finance (OFAC) issued licenses to curtail operations with Polyus and exit its securities until August 17, 2023.

According to analysts at BCS World of Investments, the impact of this news on the business of gold mining companies is not yet obvious, since they mainly operate in the domestic market and export metals to friendly Asia and the Middle East. At the same time, some problems are possible when working with foreign banks or traders, experts warned.

“As for Polymetal, now we should expect the company’s reaction to redomiciliation,” the BCS World of Investments said. In May, Polymetal International, the parent company of Polymetal, announced that it plans to re-register the company from the British island of Jersey to the Astana International Financial Center (AIFC) in Kazakhstan. In case of relocation, the primary listing can be transferred to AIX, the AIFC exchange.

The company has received approval from the British regulator (FCA) to redomiciliate to Astana and will hold a meeting on May 30 where shareholders are expected to approve the relocation. To approve this decision, 75% of the votes of the shareholders participating in the meeting will be required.

A stronger drop in Polymetal shares on the Moscow Exchange is likely due to uncertainty about future re-registration, although Polymetal International itself, which is registered on the island of Jersey and planned to redomiciliate to Kazakhstan, is not on the US list, Promsvyazbank analysts said.

The US imposed sanctions against the largest Russian gold miner Polyus following the UK. On Friday, May 19, the UK imposed sanctions against 86 Russian citizens and companies associated with the Russian energy, metallurgy, defense, transport and financial sectors, according to the website of the British government. In addition to Polyus, the UK sanctions list includes such companies as Severstal, AFK Sistema, FESCO, MMK, TMK, Rosbank and Tinkoff Bank.