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Seligdar is a gold mining holding company operating in Yakutia, the Altai, the Orenburg region and the Russian Far East. Its feature that is rare for the industry is a second line of business: mining tin, a metal with an entirely different market and different demand. The shares trade on the Moscow Exchange under the ticker SELG.
The gold business works the way it does at any miner: the company extracts the metal and sells it at the world price, and profit comes down to the cost of producing an ounce. What sets Seligdar apart is the large share of its output that comes from placer mining and heap leaching, a technology that is cheap but cannot be applied to every kind of ore.
The tin business follows rules of its own. Tin is a small market by volume with highly concentrated consumption: it goes above all into solders for electronics, so demand is tied not to jewellery but to the production of chips and circuit boards.
Debt policy deserves a separate mention: the company has raised funds through bonds whose face value is linked to the price of gold. Such debt becomes more expensive together with the metal — that is, exactly when revenue is rising too, which makes the burden more predictable than that of an ordinary foreign-currency loan.
Hard-rock and placer deposits in Yakutia, the Altai, the Orenburg region and the Russian Far East.
Mining and processing of tin ore — a market tied to electronics.
Reserve additions at operating and new sites.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
It mines gold at deposits in Yakutia, the Altai, the Orenburg region and the Russian Far East, and also mines and processes tin ore.
It is diversification across markets: demand for tin comes from electronics, not from investment and jewellery demand, as it does for gold. The two metals rarely fall in price at the same time and for the same reason.
They are bonds whose face value is linked to the price of gold: the amount of the debt changes together with the metal. For a gold miner this is convenient — the debt becomes more expensive at the same time as its revenue grows, and vice versa.