Gold miner Navoi issues $500M Eurobond

Navoi Mining & Metallurgical Co., the world’s fourth-largest gold miner, has placed a new $500 million corporate bond in London following a $1-billion issue in October as the company preps international markets for what could be an initial public offering this year. 

The new bond placement, which was 4.6 times oversubscribed, is to be used to further diversify the company’s credit portfolio on more favourable terms, Navoi said Friday. The notes carry a tenor of five years and a coupon rate of 6.75% per annum.

“The results of the new notes offering on international capital markets demonstrate investor confidence in the economic reforms underway in Uzbekistan, as well as in Navoi’s operations and the prospects for its sustainable development,” the company said in a release. 

Navoi, a Uzbekistan state-owned enterprise, is modernizing its massive Muruntau mine in the Kyzylkum Desert which produced 2.9 million oz. in 2023. The site holds 2.1 billion indicated tonnes grading 0.88 gram per tonne for 59 million oz. gold, according to a 2020 JORC resource. The company owns several other mines in the country for a total of some 150 million oz. contained metal, although the total wasn’t tallied through JORC. 

Western banks

Citi, JP Morgan, Société Générale and Mitsubishi UFJ Financial Group served as joint bookrunners and joint lead managers on the transaction. The order book reached a peak of over $2.3 billion, Navoi said.

Navoi’s bond listing on the London Stock Exchange serves as a prelude to a potential IPO  later this year. The Uzbek government has proposed to sell up to 5% of the company in the offering as it boosts the minerals industry with a $2.6 billion program.

Navoi CEO Eugene Antonov has declined to comment on the potential IPO when reached several times by email this year. He pulled out of an interview being arranged this month with The Northern Miner. 

Last year, Navoi launched its inaugural international bond offering, comprising two tranches: $500 million in 4-year notes with a 6.7% yield, and $500 million in 7-year notes with a 6.95% yield.

The issuance marked a milestone for the company and Uzbekistan’s presence in the global capital markets. The offering was oversubscribed by more than 5.5 times, reaching $5.5 billion, indicating strong investor confidence.