gold holding russia

8/20/2019 Gold Holding Russia

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RUSSIA – UAE

GOLD AND SILVER CONNECTIONRUSSIA – A GOOD PLACE TO BE

Business Invest Road Show Russian – UAE

October 29th 2014


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GOLD HOLDING

RUSSIA’S SHARE OF WORLD COMMODITY

OUTPUT* %


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RUSSIA GOLD MINING PRODUCTION2013 RUSSIA RANKED AS THIRD WORLD GOLD PRODUCER

• Russia increased its total gold production in 2013 by 13%to 254,9 t gold (2012 – 224,9 t), including:

• Mine production - 221,1 t of gold, comprising about 6.5 t

of gold in concentrates• By-product gold production from complex polymetallic

deposits increased by 3.5% up to 16 t of gold• Production from the scrap increased by 108% to 17.8 t


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RUSSIAN MAJOR MINERAL MAP


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RUSSIA MINERAL DISTRIBUTION

Map of mineral deposits


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MINERAL RESOURCE AND RESERVE BASE INRUSSIA

• Russia with its in-situ gold reservesof12745 t* standstogether with China at 2 -3 place in the worlddepending on the difference in reserves classificationbetween our two countries

• 5944 gold deposits are located on territory of Russia,including:

• Hard-rock gold deposits (58,2% reserves)• Complex polymetallic gold deposits (18,1% reserves)• Alluvial gold deposits (23,7% reserves)

• Resource potential in Russia is high -about 6000 tons ofP1 category resources

• P2 and P3 category resources are estimated at morethan 35000t of gold


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HIGH POTENTIAL OF GOLD MINING IN RUSSIA

• Average cash costs in 2013 were 650-$975 $/ounce for the six leading companies inRussia and were between 700 and 1200 $/ounce for the rest of gold-miningcompanies

• All-in-sustainable cost (AISC) in 1Q-2014 ranged from 1100to1360$/once for sixleading companies

• Tax regime is similar to other mining jurisdictions ( Royalty –“Mineral ExtractionTax”-6% )

• Low gold price created favorable conditions for M&A deals for new investors• Russia is creating new incentives to attract financing for early stages of exploration

projects

• Presence of reputable foreign consulting companies, globally recognized certifiedlaboratories and large engineering companies with modern technologies and bestpractices for exploration and mining

• Number of Russian gold-mining companies announced successful results of PILOTS

PLANT FOR REFRACTORY ORE. Some of them are started to construct and put thesetechnologies in to commercial operation.

• State gold reserves are being steadily accumulated by Russia Central Bank, withcurrent level of 1094 tons of gold (WGC data)

• Russian and foreign banks are actively providing financing to Russian gold-miningcompanies

• There are no restrictions to sell out the produced bullion. In 1998 Russiancommercial banks were permitted to export refined gold. In 2002 gold-mining

companies were granted the right to export bull ion gold as well.


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RESERVES & RESOURCES(RUSSIAN CLASSIFICATION)

• Based on the state of geological exploration, four categories of reserves(A, B, C1, C2) and threecategories of resources (P1, P2, P3) are identified in Russian official classification:

• “A” Category reserves - Represent proved reserves with well defined boundaries, shape andStructure of ore bodies.

• “B” Category reserves - Represent probable reserves with pre-defined outlines of ore bodies,without detailed mapping of natural minerals types.

• “С1” Category reserves - include reserves of the explored deposits of complex geology andunexplored reserves on new areas, with extrapolation.

• “C2” Category reserves - are inferred reserves.

• Prognostic resources of category “P1” - Include resources on the flanks and deeper levels ofknown deposits. This category indicates the possibility of extending the boundary of amineralized zone beyond the C2 reserves, or the discovery of new mineral bodies with the help

of exploration works.

• Prognostic resources of category “P2” - comprise resources within mineralized districts,concentrations, or provinces which have been estimated based on the early stage geologicalexploration/prospecting data.

• Prognostic resources of category “P3” - indicates the possibility of discovery of deposits of one oranother type of mineral on the basis of favourable geological pre-conditions identified in theregion being assessed, from geological, geophysical and surveying work at medium to small

map scales.


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GOLD RESERVES DISTRIBUTION IN RUSSIA


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GOLD-MINING COMPANIES IN RUSSIA(2011-2013)

• There are about 425 gold mining companies in Russia.

– All private.

• 29 leading companies (with over 1t of gold p.a.)

–

Contribute about 80% of total mine production in Russia – Remaining 20% of mine production is done by ~400 small and

medium gold-mining companies.

• Russian government rigorously controls all operational stages:

–From exploration till mining,

– From mine design till mine closure,

– Including environment issues.


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RUSSIA - FINANCIAL SITUATION MININGCOMPANIES

• Exploration

– Russia needs fresh exploration, as grade has fallen dawn.

• Annual financing for gold-producing companies

–

Russia is cut from western capital markets and we need loans orother financing mechanism.

• Equity financing

– low gold price has made gold assets in Russia to become cheap

and it is time to make investments.

• Gold trading

– Russian bank need to have new counter-parties (as westernbanks are lowering trading limits) to preserve 100% liquidity of

gold in Russia.


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Business Invest Road Show

RUSSIA – UAE

GOLD AND SILVER CONNECTION

Business Invest Road Show Russian – UAE

October 29th 2014


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NEW BRICS DEVELOPMENT BANK

• BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing US-dominated World Bank and InternationalMonetary Fund.

• Four original BRIC countries comprise in 2014more than 3 billion people or 41.4 percent ofthe world’s population, cover more than a

quarter of the world’s land area over three

continents, and account for more than 25percent of global GDP.

• To foster greater financial and developmentcooperation among the five emergingmarkets.

• Will be headquartered in Shanghai, China.

Unlike the World Bank, which assigns votesbased on capital share, in the NewDevelopment Bank each participant countrywill be assigned one vote, and no countries will

have veto power.


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NEW BRICS DEVELOPMENT BANK

• Create the $100 billion BRICSDevelopment Bank and a reservecurrency pool worth over another$100 billion.

• Both will counter the influence ofWestern-based lending institutions

and the dollar.

• Documents on cooperationbetween BRICS export creditagencies and an agreement ofcooperation on innovation werealso signed.

• First president will be from India.

• Inaugural Chairman of the Boardof directors will come from Brazil

• Inaugural chairman of the Boardof Governors will be Russian.


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YUAN DENOMINATION TRANSACTION

• Central banks of China and Russiahave signed a 3-year ruble-yuancurrency swap deal up to $25 billion,in order to boost trade using nationalcurrencies and lessen dependenceon the dollar and euro.

• China’s Central Bank announcedthe 150 billion yuan (815 billion ruble)currency swap between the Russianruble and Chinese yuan. In terms ofthe Chinese currency that is $24.5billion, and in Russian rubles, $20.1

billion• Shanghai GOLD EXCHANGE, all

transaction are in YUAN

• Venezuela transaction, Yuan or gold

• Brazil transaction, Yuan or gold

• Argentina transaction, yuan or gold

• Africa, Yuan transactions