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Russian gold producer Polyus returning to LSE

MOSCOW — Polyus PJSC, Russia’s largest gold producer,
announced a return Monday to the London Stock Exchange
following a two-year hiatus.

The company said the offering would comprise at least 7% of its
issued share capital. Polyus has a market capitalization of
$9.9 billion on the Moscow Exchange.

The company delisted in 2015 to ensure its eligibility to bid
for the Sukhoi Log deposit, one of the world’s largest
undeveloped gold deposits. The Russian government awarded the
license to a joint venture established between Polyus and
holding company Rostec earlier this year.

The share offering that comes as Russia emerges from a two-year
recession. The country’s economy has been battered by Western
sanctions over its annexation of the Black Sea peninsula of
Crimea from Ukraine in 2014 and plummeting global prices for
crude oil, the country’s main export. The World Bank is
projecting a moderate return to GDP growth this year,
forecasting a growth rate of between 1.3% and 1.4% for the
2017-to-2019 period.

Analysts and company officials say investors may now be warming
to Russia amid a nascent economic recovery.

“The economic backdrop has improved tremendously over the last
12 months, ” said James Friel, Global Head of Investment
Banking at Renaissance Capital. “Russia is seen as less toxic
now.”

Earlier this year, PAO Detsky Mir, the country’s largest
children’s retailer, raised $355 million in the first major
initial public offering since the onset of the Ukraine crisis.
Participants in last week’s St. Petersburg International
Economic Forum said they were also considering offerings on
foreign exchanges.

Polyus has already raised money through Eurobond placements in
October and February, transactions worth $500 million and $800
million, respectively. More recently, the company agreed to
sell 10% of its shares to a consortium led by China’s Fosun
International Limited, a deal that included an option for an
additional 5% stake.

In a recent update, the company said its proved and probable
ore reserves equate to 71 million ounces of gold.

Write to Nathan Hodge at nathan.hodge@wsj.com

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