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.

Ovoca Gold (LON:OVG) revealed this morning it had continued to buy back its own stock. It acquired 25,000 shares for 33.75 pence each on Tuesday, following on from the June 1 purchase of 35,000 at 31 pence. 

It is almost unheard of for a junior miner to use its funds this way. However the move reflects the growing frustration of chief executive Tim McCutcheon and his team with the current share price, which values Ovoca at less than its cash and near cash investments.

The company has permission to repurchase up to 10 per cent of its own equity.

Ovoca, whose sphere of interest is the Magadan Province of Russia, has a simple, achievable mine development story, some potentially very interesting exploration.  And, crucially, with around US$50 million, it has the financial wherewithal to fund its plans.

McCutcheon said  recently: “The fund managers love the story, but the people I know are big funds and they can’t buy equity in a company of Ovoca’s size. This puts the emphasis for share based appreciation on retail investors.”

Commenting last week on the group’s buyback plans, Job Langbroek, an analyst at the Irish broker Davy, said it was an unusual but nevertheless “value accretive” strategy. 

"It is another aspect of what is a small company with options beyond what we would normally expect at this stage,” he added. 

“Foremost among its features is the fact that its cash and investment shelter shareholders from the dilution normally associated with companies in their formative years. Its buy-back capability will help ensure that market pricing adequately reflects the company's positive features."

At the end of March, the Russia-focused company laid out its plans for the 2011 drilling season, which included a 5,000 metre programme on the Podgorniy target, and 2,000 metres on the Zet target. Both are part of the Rassoshinskaya exploration licence.

The company also revealed it will begin 20,000 ton bulk of sampling on Stakhanovsky, where a 4,000 metre programme of diamond drilling will take place.

Stakhanovsky is being developed as an open-pit project that could be in production by 2013. Analysts suggest it could produce between 30-50,000 ounces of gold.

The company carried out trench sampling on the Zet prospect, which lies between the Olcha and Podgorniy projects, during the 2010 exploration programme and the results revealed a gold-bearing vein system which occupies around 40 square kilometres. 

Ovoca acquired the Rassoshinskaya license - which hosts the Olcha, Podgorniy and now the Zet gold prospect - back in December 2009. 

"Zet is the latest target that has been identified by the Ovoca team on the Rassoshinskaya license area,” chief executive Tim McCutcheon said. 

“Despite being one license, Rassoshinskaya’s 2,460 square kilometre area is substantial and is in a very prospective region for gold discoveries. Given past historical work and our work in 2010, we have combined over 8,000 meters of trench work, plus detailed mapping, geophysics and geochemical data on Zet. 

“Ovoca’s plan is to drill on Zet in order to establish that the vein outcroppings, which have been thoroughly tested by trenching, extend to depth.”

The company said that Zet’s alteration zone is between one and two kilometres wide and it has a 7 kilometre strike - in a north-easterly direction. 

Twenty mineralised veins have been identified. The veins vary in length from 100 to 1,900 metres, they are between one and four metres wide and have grades up to 20 grams per tonne gold.

The company acquired the project twelve months ago and since then it has been working to re-classify Stakhanovsky’s Russian P1 1.2 million ounce gold resource - a highly prospective resource category which generally ranks below inferred resources in JORC reporting standards.

The resource statement was prepared by SRK Consulting. It is an inferred resource of 9.1 million tonnes grading 1.2 grams per tonne gold, which gives 350,000 ounces of gold. 

It is based on around 10,000 metres of drilling data - comprising 3,000 metres of historic data and 7,000 metres drilled by Ovoca in 2010.

"The JORC maiden resource for Stakhanovsky is an important step in advancing the asset,” chief executive Tim McCutcheon said.

Crucially SRK believes that the resource comes from just a quarter of the area that has previously shown encouraging results from geological mapping and grab sampling.

As such SRK reckons the project has good exploration potential and there are a number of areas adjacent to the current model where Ovoca could increase the resource with further exploration work.

Ovoca will continue exploring Stakhanovsky with 20,000 tonnes of bulk sampling and 4,000 metres of drilling planned for 2011.

Primarily this is intended to confirm that Stakhanovsky’s gold veins extend at depth, to about 100 to 200 metres below the surface.  

Ovoca said that while the planned work is quite intensive it will allow Ovoca to register a gold resource with the Russian state authorities - if it is success of course. Then Ovoca will be able to begin feasibility studies and eventually start mining.

McCutcheon adds: “Our work in 2010 combined with historical work, has positioned Ovoca to aggressively prove up and expand our resource base at the site, which we are excited to begin with our bulk sampling program in 2011. 

“Also this year we have already started detailed metallurgical testing, geotechnical studies, and other work (that will be) necessary to complete a feasibility study of the project"

With a market worth of 26.3 million, or 31 pence per share, Ovoka is valued at a discount to its cash and investments.