The management of Russian Polymetal left their posts due to sanctions

In May, Polymetal and its subsidiaries were included in the US SDN list . Now Polymetal is "moving" from the island of Jersey to Kazakhstanby separating Russian assets into a separate entity.The company's shares fell by more than 5%.Vitaly NesisVitaly NesisVitaly NesisVitaly NesisVitaly NesisVitaly NesisVitaly NesisVitaly NesisVitaly Nesis

The management of the largest producer of primary silver and the second largest producer of gold in RUSSIA, Polymetal International, is leaving its posts in the Russian branch of Polymetal in connection with the sanctions imposed against it.

Chief Executive Officer Vitaly Nesis and Chief Financial Officer Maxim Nazimok have resigned from all senior positions at the holding company of Polymetal group assets located in Russia and its subsidiaries, retaining their positions at Polymetal International. Executive Vice President for Strategic Development Pavel Danilin has left Polymetal and all of its divisions. On May 19, the US State Department imposed sanctions against Polymetal under Executive Order 14024 for operating in the metals and mining sector of the Russian economy.

According to the company's announcement, Nesis and Nazimok "will focus their efforts on the operating activities of the assets" in Kazakhstan, as well as on re-domiciliation (re-registration of the company) to the Astana International Financial Center (AIFC). “At the end of the redomiciliation process, they will continue to work on a potential separation of the group’s assets by jurisdiction, as soon as it becomes practically possible, in full compliance with all applicable sanctions,” the press service notes.

The press service of Polymetal told RBC that Sergey Cherkashin, who previously held the post of Deputy General DIRECTOR for Economics, was appointed General Director. Sergei Salmanov, who previously headed the Directorate for Budgeting, Analytical Control and Reporting, became his deputy for finance. “My first priority as the HEAD of JSC Polymetal is to ensure the continuity of the company’s strategy, plans and values, and not to allow default on any obligations,” said Cherkashin. But on the news of Nesis's resignation, the company's shares on the Moscow Exchange fell by more than 5%, and by 11:20 Moscow time the drop was corrected to -4.1%, the capitalization amounted to 279.5 billion rubles.

Polymetal was founded in 1998 in Saint Petersburg . In March last year, after the start of the military operation in Ukraine and the imposition of sanctions against Russia, six foreign members left the board of directors of the company. In July 2022, the company announced that it wants to split its assets in Russia and Kazakhstan in order to restore shareholder value through a market revaluation of assets in Kazakhstan and reduce the risks of current operations. Prior to this, the company said that due to the sanctions, the number of silver bars in its warehouses increased because there were no "reliable EXPORT channels and sales opportunities in the domestic market."

In connection with plans to split the assets, Polymetal also decided to change its registration from the island of Jersey to the Astana International Financial Center in Kazakhstan. On May 30 this year, shareholders at an extraordinary meeting approved this decision.

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As Nesis said in an interview with the Kazakh edition of Kursiv, published on June 1, 2023, Polymetal's "moving" to Kazakhstan due to sanctions was "simple, even obvious: a familiar country, an advantageous geographical position, full comparability of legal regimes with Jersey, that is English Law".

He predicted that because of the sanctions, Russian assets "will face difficulties in selling, supplying, making payments." At the same time, assets in Kazakhstan continue to operate as usual.

The company plans to enter the secondary listing on the London Stock Exchange. “When the redomiciliation is completed, before a full secondary listing in London , I think six months,” Nesis said. “The Astana-London pair will probably be the most appropriate response to the needs of Polymetal International after redomiciliation,” he said.