N e w s

Two companies - Serebro-Dukat and Dukat are fighting over silver. The discord apple is the largest Russian deposit. The conflict can be summed up in one word - "unexpectedness".

Candidates

When in the middle 90s the Dukat GOK (ore-enriching plant) ran out of money the sharesholders had to give up the license on the deposit mining. The licence tender was won by a Russian-Canadian company Serebro-Dukat. 70% of the company shares belong to the well-known Canadian company Pan American Silver. Rumor has it that the computer magnat Bill Gates is behind the Canadians.

In the summer of 1998 Serebro-Dukat signed an agreement on the asset leasing. The creditors approved the agreement hoping to get at least some of the money back but still held the preparations for an auction.

The company, owning the plant's assets and being licence holders, expected to win the auction which was held last September. However, there were no winners because Serebro-Dukat was the only candidate and the auction results were cancelled.

Rivals

In November Serebro-Dukat took part in the second auction and offered $8.35 million for the assets. However, when the auction results were announced the Canadians were shocked to discover a real rival. The second candidate was a company group Kaskol who offered $12 million for the assets - and won the auction. Their claim was lawful - the company entered the whole sum on due date.

The rivals fight took several diractions. First of all Serebro-Dukat protested against the auction results in Magadan court but the claim was denied. The company can still appeal against the decision.

Evidently, while taking part in the auction, Kaskol had no idea of the agreement between Serebro Dukat and arbitral manager of Dukat GOK. Having learned about the contract, Kaskol announced its intention to withdraw it. That did not turn out easy. In fact, Serebro-Dukat told Dukat (former Kaskol): the GOK assets are now our property, you can get money for it if you like. As Dukat is obviously against such an idea, both companies are in for a series of trials.

The main hope of Dukat now is to seek after license withdrawal from Serebro-Dukat. To do so Dukat has already sent a request to the Natural Resources Ministry to check if Serebro-Dukat is following the license terms. The officers' reaction was instantaneous - the committee is already working, which means we can expect new surprises.

Silver Dukat

Dukat deposit is located in Omsukchansk area of Magadan region. It is the third largest in the world and the largest Russian deposit. Two thirds of all Russian silver reserves are concentrated in the deposit. Expored resourses of Dukat are over 14 million tons of ore, combining 9490 tons of silver and 19.98 tons of gold.