Page 132 - RusRPTNov19

name with target price of $1.6 per share.
Diamond miner Alrosa CEO Ivanov told journalists that the diamond market may remain under pressure in 2020. Diamond miners need to seriously control supply volume, according to Ivanov. Ivanov noted that one of the reasons for the fall in demand in 2019 was the influence of synthetic diamonds. Among other reasons were excess inventory in the retail sector, the US-China trade war, protests in Hong Kong and problems with financing cutters in India, according to BCS Global Markets .
Angola confirmed plans to buyout the 8.2% of the Catoca mine in Angola Alrosa had pre-paid. Alrosa is to receive the first payment of USD 35mn by YE19, and another USD 35mn over the next two years. To recap, at the end of 2017, Alrosa purchased a 16.4% stake in Catoca for USD 140mn from its Brazilian shareholder; however, as part of the deal, the Angolan national diamond mining company Endiama committed to buying an 8.2% stake from Alrosa for USD 70mn at a later date.
Alrosa is bullish on greenfield and brownfield mines in Zimbabwe, where the company has a JV with a 70% controlling stake, said the company’s Deputy CEO Vladimir Marchenko. Up to now, the company sent 30 licence applications (only eight of which are for pure greenfield). Alrosa expects to receive half the licences before YE19, and the rest during next year. Brownfield projects are to be financed by credit from Zimbabwe, which would be transformed into equity in future.
Russian diamond monopoly A lrosa put in strong sales for September ahead of the Diwali festival in India, bring the company some temporarily relief from a terrible year. Alrosa’s September rough diamond sales surged by 42% m/m to $257mn, which however was 23% lower y/y, the company reported. The diamond miner said that sales were stronger than expected mainly due to purchases ahead of Diwali. Overall demand remains weak, although there is a recovery in some types of diamonds.
Russian gold miner Petropavlovsk 3Q19 operating results show company started processing 3rd parties concentrate but results almost unchanged. Petropavlovsk released neutral 3Q19 operating results and maintained 450-500k oz gold output guidance for 2019. Gold production rose by 8% q/q to 126k oz, as the company started processing flotation concentrate from 3rd parties (added 9k oz to output), other assets performed mostly flat q/q
132 RUSSIA Country Report November 2019 www.intellinews.o