Petropavlovsvk PLC slumped a further 24% as it said sanctions recently imposed on its bank and principal offtaker Gazprombank effectively meant it couldn't sell any gold.
Gazprombank (GBP) is the buyer of 100% of the group's gold production, said the Russia-based gold miner.
“GPB's designation under the UK regulations prohibits further sales of gold by the group, while restrictions on the purchase and sale of gold in Russia may complicate the search for an alternative purchaser,” Petropavlovsk said in a statement
“The company is urgently considering with its advisers the implications for the Group's activities and financing arrangements resulting from GPB being designated for the purposes of an asset freeze.”
Gazprombank was one of 65 Russia-based or focused organisations and individuals that were added to the UK sanctions list yesterday
As part of the offtake arrangement, PetroPav also has a US$200mln term loan and revolving credit facilities of US$87.6mln with the bank but because of the sanctions it has not been able to pay GBP US$560,000 due on its loans today, it said.
Shares in the miner slumped to 1.45p compared to 25p before the start of the Ukraine war.