Kirill Golovanov has been named as the new chief executive at Russia focused Ovoca Gold (LON:OVG).

Former CEO Tim McCutcheon has resigned to pursue other business interests but will remain as a director to assist Golovanov to ensure a smooth transition, the company said.

Previously the company secretary and head of the Russian office, Golovanov was appointed a director of Ovoca with effect from April 12.

He takes up the new role with immediate effect.

Chairman Mikhail Mogutov said "We are very pleased to appoint such a strong leader as Mr. Golovanov as CEO.

"He will be extremely focused on managing exploration activities in the Magadan region in order to achieve our company's goals. Tim has done a good job for the company and we wish him well in his next endeavours."

Ovoca is exploring and developing its 100 per cent owned Stakhanovsky and Rassoshinskaya licences.

Stakhanovsky lies around 40 kilometres north of Susuman, the second largest city in the Magadan region, and revealed a maiden inferred resource of 350,000 ounces of gold last year.

In July, last year, the company updated the resource estimate for the Olcha prospect located within the Rassoshinskaya licence area to 650,000 ounces of gold and 3.59 million ounces of silver.

In today’s full year report, the Russian gold explorer also highlighted the announcement of a maiden inferred resource of 350,000 ounces of gold at the Stakhanovsky project in February, where it has also completed the construction of a processing facility.

Last year, Ovoca prepared 8,000 tons of sample ore, and will put it to work right away when the facility is running.

In July, Ovoca updated the resource estimate for the Olcha prospect located within the Rassoshinskaya licence area to 650,000 ounces of gold and 3.59 million ounces of silver.

Earlier this month, Ovoca was granted a 25 year exploitation licence for its Olcha deposit by the Russian government, allowing it to mine gold and silver.

The Olcha licence is a "carve out" of the Rassoshinskaya exploration licence, the latter being valid to 15 February 2013 and still extendable.

Recent exploration results from Rassoshinskaya showed significant high grade gold and silver mineralisation in two targets - Podgorniy and Zet. A new gold-silver target in the shape of Maliy was also discovered, producing grades of four grammes per tonne (g/t) and 861 g/t silver.

“In short, on Rassoshinskaya, Ovoca had a very productive year and is well placed to further advance the various targets on the license in 2012,” said chief executive of Ovoca Tim McCutcheon.

“A key moment for Ovoca regarding Stakhanovsky was the regulatory hurdles the company faced to build the facility...Ovoca is extremely well placed to navigate the Russian mining industry regulations to successfully build mining assets in Russia in as short as possible time.”

On the financial front, Ovoca posted a net income of €4.26 million in 2011 and finished the year with €28.7 million in cash and assets available for sale.

Only a week ago, the company said it was looking for a strategic partner to de-risk the Rassoshinskaya licence. Its target list includes Canadian and UK miners - with market caps of around US$1 to US$5 billion - and the search is ongoing.

Ovoca Gold (LON:OVG) has made an important step in advancing its activities in Russia, according to Fairfax Securities.

In an afterhours statement on Thursday the gold explorer announced that it had been granted a 25-year exploitation license for the Olcha project by Russian authorities.

The Olcha license is a 2.5 square kilometre "carve out" of the Rassoshinskaya exploration license, the latter being valid to 15 February 2013 and still extendable. 

“The company is one of the few junior gold explorers in Russia and have a management team that has a track record of achieving value for assets in Russia,” Fairfax analyst John Meyer said in a note to clients today.

“The company recently announced an update on other prospects within the Rassoshinkskaya project at Podgornity and Zet which showed high grade trench results. 

“A new experienced geological team has also been appointed to lead the programme and we look forward to further positive news flow.”

Olcha has 279,000 ounces of Russian standard gold reserves (C1 + C2) at a grade of 13.4 grams per tonne (g/t) and 655,000 ounces silver at a grade of 31.6 g/t at a grade of 13.4 grams per tonne (g/t).

"We are all extremely pleased with the issue of the exploitation license for Olcha," said chief executive Tim McCutcheon.

"By receiving the exploitation license we have demonstrated once again that the Ovoca team can work in Russia effectively and that the regulatory framework for mining in Russia does work.

"I look forward to growing the gold and silver resource at Olcha as well as at nearby deposits such as Zet."

The license, which is valid to 3 April 2037, has  a total area of 2.5 square kilometres and allows the company to mine gold and silver through its Russian subsidiary, ZAO Bulun.

The Olcha license is a "carve out" of the Rassoshinskaya exploration license, the latter being valid to 15 February 2013 and still extendable.

"We are all extremely pleased with the issue of the exploitation license for Olcha," said CEO Tim McCutcheon.

"By receiving the exploitation license we have demonstrated once again that the Ovoca team can work in Russia effectively and that the regulatory framework for mining in Russia does work.

"I look forward to growing the gold and silver resource at Olcha as well as at nearby deposits such as Zet."

The state-certified reserves equal 279,000 ounces of gold at a grade of 13.4 grams per tonne (g/t) and 655,000 ounces silver at a grade of 31.6 g/t in the Russian reserve category C1 + C2.

Ovoca said that the Russian legislation does not consider the Olcha deposit strategic as it is below the established strategic threshold of 1.6 million ounces gold in the C1 + C2 category.

The company, as per the license terms, must begin construction of a mine no later than the 3 October 2020.

As per the agreement between the company and the sellers of ZAO Bulun, Ovoca has paid US$3 million to the sellers. The deal was to pay this upon receipt of any exploitation license on the territory of the Rassoshinskaya license area.

The company’s two main projects are located in the Magadan region: Stakhanovsky and Rassoshinskaya.

Rassoshinskaya is in the northeastern part of the Magadan region, about 200 kilometres from the town of Seimchan. Rassoshinskaya hosts the Olcha epithermal gold deposit, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource, the company said.

Ovoca expects first gold production at Stakhanovsky at the beginning of 2014.

He added that the current valuation for the company, which works out at $14 per ounce, is at a significant discount to other miners.

"The current valuation reflects a combination of the cash in the company and the book value of the exploration licences," he said.

"We view the market is assigned no value to the resource base at its two main projects Stakhanovsky and Rassoshinskaya which contain a combined resource base of 1 million ounces."

Running through Fairfax's own valuation of 65 pence per share, it puts cash at $11.1 million, assets available for sale $43 million, total gold resource of 1 million ounces with a discounted value at $50 million making a total of $104 million, or £65 million.

The note also highlighted that previously Ovoca acquired, developed and sold the Goltsovoye silver project located in the Magadan region to JSC Polymetal for a cash and share consideration worth $47.7 million in 2009.

The management team have been involved directly in a number of successful projects in the Magadan region, it added.