Russian Watchdog Accuses UK Firm of “Illegal Export of Geological Information”

Text of report by Russian news agency Interfax

Moscow, 26 July: The deputy head of the Federal Service for Regulation of the Use of Natural Resources (Rosprirodnadzor) of the Russian Ministry of Natural Resources, Oleg Mitvol, has accused the British company Highland Gold Mining (HGM), which is developing the Mayskoye gold field in Chukotka [in the Russian Far East], of illegally exporting geological information from Russia.

A statement the press service of the Ministry of Natural Resources released on Thursday [26 July] on foreign companies supplying incorrect information to their investors quotes Mitvol announcing “the start of an investigation into incidents of illegal export of geological information from our country, as in the case of the Highland Gold Mining company”, which the agency has reported to all the interested bodies, including the Russian Federal Security Service.

It was reported earlier that HGM shares fell by 12 per cent on 4 July after the announcement of the start of an unscheduled check of the compliance of the Mayskoye joint-stock company (a fully owned subsidiary of HGM) with its licence obligations for the development of the Mayskoye gold field.

HGM reacted immediately to this announcement by the Ministry of Natural Resources by saying that it was holding talks to make the necessary changes to the terms of the licence for the development of the Mayskoye field, in particular the provision envisaging the production of 1,000 kg of gold in 2007.

A few days later Rosprirodnadzor asked the Federal Agency for the Use of Natural Resources not to make changes to the licence terms for the development of the gold field in Chukotka.

HGM has licences for the development of the gold fields Mnogovershinnoye in Khabarovsk Territory, Darasun, Talatuy and Teremki in Chita Region and Mayskoye in Chukotka Autonomous Area, as well as the gold and polymetal deposits Novoshirokinskoye and Taseyevskoye in Chita Region.

In 2006 the Canadian company Barrick Gold, the world’ largest gold producer, increased its shareholding in HGM from 20 per cent to 34 per cent, in return ceding its 50-per-cent shares in joint ventures with HGM and four geological survey sites.

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