Small mine: Severgroup sells part of gold mining assets in Africa
The gold mining company Nordgold, part of Alexey Mordashov's Severgroup, is considering the sale of assets in Burkina Faso. The deal could amount to $1 billion, three sources familiar with the situation told Izvestia. According to experts, the sale may be related to the company's desire to increase free cash flow (FCF) for new acquisitions in other markets. At the same time, the gold mining sector remains attractive for investment against the background of high metal prices and its status as a "protective" asset. Since the beginning of the year, the exchange value of gold has increased by more than one and a half times. What is interesting about this asset and who claims it is in the Izvestia article.
Which gold mining assets are for sale
Gold miner Nordgold has decided to sell assets in African Burkina Faso. A source familiar with the company's plans told Izvestia about this, and two interlocutors at Severgroup confirmed it. The amount of the deal under discussion is $1 billion, said an interlocutor close to the gold mining organization. A source at Severgroup said the amount was higher, but did not specify the exact cost.
The group forwarded Izvestia's request to Nordgold, but its representative declined to comment.
Nordgold is a gold mining company founded in 2007 as a division of Severstal. It manages eight operating mines in Russia, Kazakhstan, Guinea, as well as in Burkina Faso, where the group has two (Bissa and Bouly). It is one of the top 10 gold miners in Russia. By the end of 2024, its gold production volume amounted to 16 tons — 10% more than in 2023, the industry magazine Gold and Technology estimated. The company does not disclose its own financial indicators. Revenue of Nordgold Management, which consolidates the gold miner's key assets in Russia and abroad, in 2023 (the latest available data) amounted to $1.44 billion (+5% by 2022), net profit decreased by 11% to $162 million, adjusted EBITDA (reflects the company's earnings before interest taxes and depreciation) increased by 11% to $670 million. Severgroup owns 100% of the company's authorized capital, according to the Unified State Register of Legal Entities.
Among the interested parties, one of Izvestia's interlocutors names Viktor Kharitonin, the beneficiary of Pharmstandard (23rd place in the Forbes ranking with a fortune of $7.5 billion). Severgroup was negotiating a price with him, he said. Kharitonin told Izvestia that he had no plans to acquire these assets. Gazprombank could also show interest in African mines, a source familiar with Nordgold's plans added. The Bank, through the AAA Capital Management structure, is a minority shareholder of another major gold miner, Yuzhuralzoloto (YUGK). A representative of the credit institution declined to comment.
What is the interest of Nordgold assets?
Gold mining assets in Burkina Faso are the largest on the market outside the country owned by a Russian company, according to a source close to the company. They may be of interest to the buyer as a source of foreign exchange earnings and a way to diversify the portfolio, says Yaroslav Kabakov, Director of Strategy at Finam IC. In the current conditions, the gold mining market remains attractive for investment due to the high price of gold and its role as a "protective asset". In 2025, this metal rose in price by more than 60%, updating more than 50 historical highs and becoming the fastest-growing major asset of the year, according to a report by the World Gold Council (WGC). The price of gold futures on the New York Comex exchange for delivery in February 2026 was $4,377 per ounce (+64.4% since the beginning of the year), according to the exchange's data on December 15.
The mines in this country are of interest to investors, but it is difficult to develop them due to the military coups in the country, said a source close to Nordgold. In 2022, the company stopped production at the Taparko mine amid a deteriorating security situation in Burkina Faso, its subsidiary Société des Mines de Taparko (SOMITA) reported. The group is facing "threats that are growing every day" against its staff and its activities, the company quoted its CEO, Alexander Hagan Men, as saying.
The sale will allow Severgroup to increase its free cash flow to complete new transactions in other markets, a source in the group told Izvestia. Thus, she will be able to optimize the structure of her own capital, Yaroslav Kabakov, Director of Strategy at Finam IC, agreed. According to him, against the background of weakening financial performance in the steel business, the holding is striving to increase free cash flow and reallocate resources to "more predictable and strategically important" areas.
In the third quarter of 2025, EBITDA (income before income tax, interest on loans and depreciation) of Severstal's main asset amounted to 35.5 billion rubles, having decreased by 45% compared to the same period a year earlier, according to its IFRS report. EBITDA margin decreased by 10 percentage points year-on-year, to 20%. The free cash flow in July–September 2025 turned out to be positive and amounted to 7.3 billion rubles. At the same time, FCF was negative for nine months, amounting to 21.8 billion rubles, according to Severstal's financial statements. Such results strengthen the group's motivation to sell non-core foreign assets, Yaroslav Kabakov pointed out.
However, Vyacheslav Berdnikov, head of the public stock analysis department at Sovcombank, believes that the sale of assets abroad is unlikely to be conditioned by Severstal's financial results. In his opinion, this is due to the "different point of view of investors on gold," as well as the reduction of Severgroup assets abroad due to sanctions, which, in addition to Severstal's main shareholder, also affected companies controlled by him, including Nordgold.
Transactions in Africa are accompanied by increased risk management requirements and increased cost of capital, Yaroslav Kabakov noted. This affects the assessment and structure of any such transactions, he said. The investment potential of the gold mining market is good, but the return on investment cycle is at least 3-5 years, concluded Vyacheslav Berdnikov.
Переведено сервисом «Яндекс Переводчик»
