Are you sure?

Eurasia Gold, like GV Gold, delays London share sale

Eurasia Gold Inc., a Kazakh-based company in which billionaire Viktor Vekselberg has a stake, became the second miner from the former Soviet Union in two months to delay a share sale in London.

Eurasia Gold Inc., already listed in Toronto, sought to raise as much as $150 million for two acquisitions in central Asia by offering new dollar-denominated shares. It still plans to buy the Bozymchak gold and copper deposit in Kyrgyzstan and the Akjilga silver deposit in Tajikistan remain unchanged, according to a statement released today. „Market turbulence has not allowed investors to concentrate fully on our value proposition,” CEO Baltabek Mukashev said in the statement.

„A postponement of the offering is the best course” to preserve stock value, he said. Eurasia's decision follows a similar one by Siberian gold producer OAO GV Gold, which last month delayed indefinitely plans for an initial public offering in London. Analysts including Vladimir Katunin at Aton Capital in Moscow said the miners, spurred by higher metals prices, are seeking „inflated targets” that exceed even the valuations made by banks leading their share sales.

„Eurasia aggressively overvalued itself and there aren't a lot of investors willing to buy an average gold company at any price,” Katunin said by telephone in Moscow. Nomura International, leading the London sale together with Uralsib Financial Corp., valued Eurasia at €250.5 million ($330 million) to €296 million ($390 million). Commodity producers were among those affected by the drop in emerging-market stocks this month.

Eurasia Gold's shares have declined 23% since the company said it will seek a listing in London. Its new shares would have been governed to a large degree by the price of the stock in Canada, Tim Read, the company's non-executive chairman, said on February 26. The Kazakh-based company is controlled by Kumar Mukashev and his family, which has 54% of the stock. Vekselberg holds about 24% through his Renova investment vehicle. (Bloomberg)