Russian metals giant Norilsk Nickel said on Monday it would spin off and float its gold business, creating what could become the first big pure play stock in Russia's promising gold sector. The world's number one nickel and palladium producer said the new company, to be created by early 2006, would include its Polyus gold subsidiary and its 20 percent stake in South Africa's Gold Fields. Analysts believe Polyus, which has estimated gold reserves of about 18.9 million ounces, is worth over $3 billion now.
They expect it to grow further as it develops gold assets in Russia and expands its reserve base.
"Polyus has one of the most exciting asset bases of scale in the global gold sector today, as well as providing a window into one of the world's most prospective, but least developed, gold regions: Russia," Norilsk said in a statement.
"It is the intention of the board of MMC Norilsk Nickel that (the new company) would seek both domestic and international listings as soon as practicable following the transaction."
Norilsk initially produced gold mainly as a by-product of its core base and platinum group metals activities. Booming gold prices have forced it to focus more on the yellow metal.
It has snapped up gold assets aggressively to create Polyus, Russia's biggest gold producer, which now controls a vast network of mines across Siberia.