Russia to Sell Untapped Gold Deposit

Russia is expected to sell discounted rights to one of the world’s largest untapped gold deposits this week to a joint venture of miner Polyus and a state conglomerate, industry sources and analysts said, after sanctions and restrictions discouraged other bidders, Reuters reported. The starting price at Thursday’s auction of the Sukhoi Log deposit is $144 million, valuing gold there at $2 per ounce, around 10 times cheaper than deposits of a similar size elsewhere in the world, according to one analyst. The Russian government, after 20 years of promises to sell the deposit, hopes the start of production will generate much-needed tax revenues and jobs. Moscow has also come under pressure from a two-year lobbying campaign by shareholders in the joint venture of Polyus and state-run Rostec, according to an industry source, who spoke on condition of anonymity. As part of a policy of keeping strategic resources in Russian hands, the government limited access of foreign investors to the auction, ordering that 25% of any bidder should be owned by state-controlled firms.