Navoi Mining and Metallurgical Co., the fourth-largest gold producer, is preparing for a potential IPO in Q3 2023. The company holds substantial gold resources beneath the Kyzylkum Desert, generating considerable production despite not meeting Western standards. The IPO will likely occur on the London Stock Exchange and Tashkent, aiming to raise $550 million by offering 5% of the company. This move reflects the Uzbek government’s broader goals to establish the country as a significant mining jurisdiction.
Navoi Mining and Metallurgical Co. (NMMC), the fourth-largest gold producer globally, is reportedly preparing for an initial public offering (IPO) in the third quarter of 2023. NMMC produced 2.9 million ounces of gold this year and possesses nearly 150 million ounces of resources, albeit not meeting Western standards for estimation. Located beneath the Kyzylkum Desert in Uzbekistan lies Muruntau, potentially the largest gold deposit worldwide, which still yields substantial resources.
In the past two years, NMMC has conducted pre-IPO preparations, including divesting non-core assets and securing a $1.2 billion loan from international banks. Recent presidential decrees indicate a firm timeline for the IPO, aligning it with recent positive market conditions. The company is enhancing its reporting practices to comply with international standards, adopting Australian resource estimation methodologies, and issuing ESG reports to attract potential investors.
NMMC is expected to pursue a listing on the London Stock Exchange, following its eurobonds issuance that gained attention from international investors. Despite London’s declining relevance in mining listings, it maintains a strong presence for Central Asian companies, with precedents such as the Kazakh state uranium mining company’s prior success. However, there will also be a simultaneous listing in Tashkent, Uzbekistan’s capital.
With initial plans to sell 15% of NMMC, recent evaluations suggest a more conservative 5% offering, projecting a deal size of around $550 million. Given the significant size of the IPO, major international banks such as JPMorgan and Citi are anticipated to provide advisory services, alongside local banks for domestic coverage. Notably, Russian banks will likely not participate in these transactions due to sanctions since the Ukraine conflict.
Key considerations for potential investors include the risk of government intervention due to NMMC’s substantial contribution to Uzbekistan’s budget, potentially leading to increased taxation. Furthermore, safety protocols are a major concern, especially after recent accidents within the company, which indicate a need for improvements in alignment with international safety standards. Investors will require assurances regarding safety, dividend policies, and strategies to increase operational resilience.
The IPO would signal an important movement within Uzbekistan’s mining sector, with other companies like the state copper miner Almalyk also preparing to follow suit. The Uzbek government aims to boost production across gold, silver, copper, and uranium sectors significantly. These IPOs of Navoi and Almalyk are seen as crucial steps towards establishing Uzbekistan as a credible mining destination to attract foreign investments.
In conclusion, Navoi Mining and Metallurgical Co. is poised to make a significant impact with its upcoming IPO, potentially marking a milestone for Uzbekistan’s mining sector. With thorough preparations and an increasing global interest in gold, the IPO may not only enhance transparency and operational standards for NMMC but also attract vital investments into the country’s resource industries. Given the global mining landscape, this opportunity should be closely monitored by potential investors.
Original Source: www.northernminer.com
