Russia expected to sell gold deposit cheap amid sanctions, sources say

MOSCOW -- Russia is expected to sell discounted rights to one of the world's largest untapped gold deposits this week to a joint venture of miner Polyus and a state conglomerate, industry sources and analysts said, after sanctions and restrictions discouraged other bidders.

The starting price in the Jan. 26 auction of the Sukhoi Log deposit is $145 million, valuing gold there at $2 per ounce, around 10 times cheaper than deposits of a similar size elsewhere in the world, according to one analyst.

The Russian government, after 20 years of promises to sell the deposit, hopes that the start of production will generate much-needed tax revenues and jobs.

Moscow has also come under pressure from a two-year lobbying campaign by shareholders in the joint venture of Polyus and state-run Rostec, according to an industry source, who spoke on condition of anonymity.

Rostec is headed by Sergei Chemezov, a close associate of Russian President Vladimir Putin. ...

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http://www.reuters.com/article/us-russia-sukh...g-idUSKBN1571MA