Kazakh gold miner Solidcore Resources has announced plans to return up to $1.2 billion to shareholders through a buyback of its own shares, reports infohub.kz.
Under the tender, Solidcore intends to repurchase up to 102.9 million shares, representing about 23.2% of its current share capital. The price per share is set at $11.66, approximately 10% above the 30-day volume-weighted average price as of September 7.
The tender offer will open at 11:00 Astana time on September 9 and close at 17:00 on October 12. The transaction is still subject to shareholder approval at an extraordinary general meeting scheduled for September 30 in Astana. If shareholders tender no more than 102.9 million shares, the company will buy the entire amount offered. In case of oversubscription, shares will be repurchased on a pro-rata basis.
Solidcore emphasized that this tender is a one-time return of capital and does not imply the introduction of a recurring shareholder payout policy. "We believe the tender offer is a compelling use of available capital. It provides liquidity to shareholders who wish to exit their investment, while remaining owners retain full exposure to the company's future growth," said Yevgeniy Konovalenko, Senior Independent Non-Executive Director of Solidcore.
In comments to Reuters, Solidcore CEO Vitaly Nesis said that after this large buyback, the company does not plan additional shareholder payouts until it achieves its strategic goal of increasing potential production to 1 million ounces of gold equivalent per year by 2029. Thus, the $1.2 billion is a planned one-time capital return, after which Solidcore intends to direct funds toward implementing its growth strategy.
Solidcore's largest shareholder, Maaden International Investment SPC, which owns 31.7% of the company, has committed not to participate in the buyback. CEO Vitaly Nesis has also made a similar commitment. The company believes this demonstrates the long-term interest of key shareholders and management in the business's development.
As of September 1, Solidcore's cash stood at $1.4 billion, with a net cash position of $747 million. Additionally, the company has secured $700 million in external financing for the Ertis POX project. The share buyback is expected to reduce the number of shares outstanding and, all else being equal, increase the stakes of shareholders who choose not to participate in the tender.