OREANDA-NEWS Petropavlovsk, one of Russia's largest gold miners, will not be able to sell gold, according to its press release to RBC.

The company, registered in Great Britain, until recently sold 100% of the gold produced to Gazprombank. But the day before, on March 24, this bank along with other Russian companies came under British sanctions.

According to the Union of Gold Producers, Petropavlovsk is considered the fourth largest gold mining company in Russia based on production in 2021. The company's main facilities (Pioneer, Malomyr, and Albyn) and the Pokrovsk Autoclave Hydrometallurgical Plant (PAGK) are located in the Amur Region. Last year, Petropavlovsk reduced its gold output by 17.9% to 449,800 ounces.

Selling gold specifically through Gazprombank is one of the conditions of the $200 million loan that the bank provided to Petropavlovsk and the revolving credit line for another $86.7 million. "The inclusion of Gazprombank in the [UK] sanctions list <...> and freezing its assets prevents further sales of gold produced by the group to Gazprombank at this time," the company said in a statement. Restrictions on the purchase and sale of gold in Russia may cause "difficulties" in finding alternative buyers of precious metal produced by the group, it added.

Petropavlovsk also can't fulfill its obligations to pay interest on the $200 million loan and pay the bank $560,000 in interest (this payment expires on March 25). Due to British sanctions, gold miner is prohibited to make such payments.

Earlier, Gazprombank's press service reported that the British sanctions will have no effect on its work: "Today the British Treasury has published an announcement about the introduction of new sanctions against a number of Russian companies and banks, including Gazprombank. We hasten to inform our clients that these events will not affect Gazprombank's current operations in Russia. RBC has sent an inquiry to a representative of the bank.