Report: Polyus and Polymetal to merge creating world's No. 3 gold miner by reserves

Moscow business daily Vedomosti  cites sources saying the most likely outcome from news out yesterday that Mikhail Prokhorov's Onexim Group has agreed to sell a 37% stake in Polyus Gold, is a merger with Russia's number two gold miner Polymetal.

News reports said Prokhorov was selling the stake to an unnamed group of investors selected by billionaire Suleiman Kerimov’s Nafta Moskva, which holds a 40% sake in Polyus.

Vedomosti says Kerimov – who was also the architect of the 2010 merger between Silvinit and Uralkali to form the world's largest potash maker – had attempted to merge the two gold miners last year  but could not come to terms.

Polyus has a partial listing in London where it is worth close to $4 billion while Polymetal is included in the FTSE-100 with a market cap of $6.6 billion. Polyus's plans for a London IPO has been repeatedly delayed due to its shareholder structure.

A combined group would be the world's sixth largest producer of gold (just behind Canada's Goldcorp) with more than 2.6 million ounces predicted for 2013.

In terms of reserves together Polyus and Polymetal ranks number three globally.