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Store Norske selling gold subsidiary

Samples of gold from Svalbard. FOTO: Store Norske

Store Norske selling gold subsidiary

This spring Store Norske Gull AS will be in new hands. A sale is imminent.



21.03.2014 kl 16:08

Store Norske is in the final stages of negotiations likely to result in a sale of a subsidiary company during the second quarter of this year. The sale includes exploration rights in Troms and Finnmark, while Svalbard is excluded. The aim of the sale is to reduce operating costs and raise money.

Three interested
Svalbardposten has confirmed there are three potential buyers. One is now in the process of due diligence – a review of all aspects of the compony and its assets – which is fully or partially in transition, and negotiations are being completed.

Per Andersson, Store Norske's administrative director, confirms the process is ongoing.

"We're not quite there yet, but there are negotiations with one of them," he said.

When Store Norske established operational goals for its subsidiary last May, it was determined the company would consider potential partners. Last autumn it became to sell the business with its rights on the mainland. Unpredictability, costs, tied-up assets and a comprehensive downsizing are the reasons Store Norske wants to sell. In addition, the company just invested 1.2 billion kroner in the new coal mine in Lunckefjell.

Karlsen & Co?
"The value of the company lies entirely in the rights of the company, plus the large amount of data and knowledge collected since 2004, employees with competence, and assets in the form of property and equipment," said Morten Often, director for Store Norske Gull AS.

According to data from the Directorate of Mineral Management, SNG currently has 74 active exploration permits in Troms and Finnmark, the oldest originating in 2007. The rights are concentrated at Ringvassøya and Vannøya in Troms,, and at Karasjok in Finnmark.

Neither Often nor Andersson would say who the buyers are, but it is clear that Scandinavian Recources AB, Nordic Mining ASA, Northern Highlands APS, Robert Norman Hermansen, Geo Mining AS, Nussir ASA and Norwegian Minerals Group AS, and Klosters Rederi with, among other investors, Bernt Stilluf Karlsen, all have rights in the two provinces.

"We have really been looking for partners for a whole number of years, even before I joined the company in 2010," said Often, who came from the Geological Survey of Norway (NGU).

Gold found
Store Norske, however, is not completely letting go of gold. SNG also has 12 mining claims in St. Jonsfjorden in addition to 15 other discovery sites in Svalbard it has not filed claimed claims on yet. It is not necessary to sell these rights. The discovery was made during drilling in 2010 and extends several kilometers eastward on the south side of the fjord. On the shelf of his office in Longyearbyen, Often has mineral samples from the site. It shows a content equivalent to 55 grams of gold per ton, but it is not verified how large this discovery really is. The structure runs diagonally down the mountain. If a determination is made to extract gold here sometime in the future, it will therefore be most suited for underground mining.

"In my opinion, Store Norske's burden is continuing drilling to ascertain what can be found," he said.


Se bildet større

"In my opinion, Store Norske's burden is continuing drilling to ascertain what can be found," Morten Often says. FOTO: Eirik Palm

Se bildet større

Drilling for gold in St. Jonsfjorden during the season 2010-2011. FOTO: Birger Amundsen


Facts: Store Norske Gull AS

Founded in 2003 to investigate and develop Store Norske's gold deposits in Svalbard. 

In 2004 operations also began on the mainland (Finnmark and Troms).

Currently has 74 active exploration permits in the Tromsø, Karlsøy and Karasjok communities. The areas total 215 square kilometers. 

In Svalbard, SNG has 12 claims and 15 discovery points at St. Jonsfjorden.

SNG in 2012 recorded assets of 3.9 million kroner, equity of 3.9 million kroner and a total debt of 1.7 million kroner.
                                   u] Sources: SNSK/Pure Help

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