The merger of Russia's two largest gold majors could create a company on par with Canadian bullion digger Goldcorp (NYSE:GG,TSX:G), according to recent media reports.
that a combination of Polyus Gold (LSE:PGIL) and Polymetal International (LSE:POLY) is a likely outcome of last week's news that Russian billionaire Mikhail Prokhorov is selling a 37-percent stake in Polyus to an unnamed group of investors selected by billionaire Suleiman Kerimov's Nafta Moskva, which holds a 40-percent stake in Polyus.
Kerimov tried unsuccessfully merge the two firms last year. If he succeeds this time, the resulting company will be the world's fifth- or sixth-largest gold producer (on par with Canada's Goldcorp), with over 2.7 million ounces predicted for 2013, according to MINING.com.
Polyus made headlines this week when it announced that its gold output in 2012 rose 12 percent, to a record 1.68 million ounces — exceeding production targets by 5 percent and bucking the trend plaguing major gold producers like Goldcorp and Barrick Gold (NYSE:ABX,TSX:ABX), which have both struggled to bring projects online.
It expects its 2012 gold sales to rise a whopping 22 percent, to $2.8 billion, compared to $2.3 billion a year ago.
"The record double-digit growth rate achieved in 2012 came as a result of ... exceptional performance delivered by our largest mines, Olimpiada and Blagodatnoye, and steady improvements at Kuranakh," Polyus said in a statement.
The company also said it may hike its 2013 output by 7 percent, to between 1.7 and 1.8 million ounces, due to rising production in Russia.
Meanwhile, Polymetal also announced that it produced significantly more gold in 2012 than in 2011 — 1.06 million gold-equivalent ounces, which is 31 percent more than it put out in 2011 and 6 percent better than its original guidance. The news prompted the precious metals miner to announce a possible disbursement of a special dividend at the end of the year, adding to this month's payout of US$0.50 per share, which cost the company $191 million, Reuters reported.