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Thursday, 22nd February 2007 (3139 views)

Harmony Gold, based in South Africa, has expressed its interest in buying gold production assets in Russia's far eastern Kamchatka peninsula, according to local Interfax news agency reports.

The assets currently belong to Russian investors Renova, whose subsidiary, Kamgold, produces around three tonnes of gold on the peninsula annually.

Renova and Harmony are now holding talks to establish the value of the assets expected to conclude in a "couple of months", according to Renova's chief executive officer, Mark Buzuk.

Banking sources apparently revealed to Interfax that Renova intended to float Kamgold in the first half of 2007 but a source close to the parent company countered that Harmony would be able to take a stake in the flotation as a strategic investor.

Under the memorandum of understanding between the two firms, Harmony is expected to invest up to $200 million(£102 million) in the Kamgold project, on top of $100 million (£51 million) in a cooperation agreement with Harmony on uranium mining in South Africa.

Harmony is South Africa's third largest gold producer.

 

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