UPDATE 1-Polymetal buys first platinum project in Russia
* Partners with VTB Capital for $10 mln cash-and-share deal
* Deal has to approved by Russian government
* 7 mln ounces of platinum recovered in area
MOSCOW, Dec 18 (Reuters) - Russian precious metals miner Polymetal has agreed to buy its first platinum exploration project in Russia together with VTB Capital, a unit of Russia's No.2 lender by assets, VTB.
The total value of the deal is about $10 million, Polymetal said on Tuesday.
Polymetal acquired a 24.99 percent stake in the Svetlobor platinum project from a Cypriot firm Ubergot Investments, controlled by Russian individuals, in exchange for 130,053 new shares in Polymetal.
VTB Capital has acquired the remaining 75.01 percent stake in the project from Ubergot in exchange for 390,369 new shares in Polymetal which it is buying for $6.9 million. It has also agreed to sell this stake to Polymetal for the same amount following regulatory approval.
The new ordinary shares to be issued to Ubergot and VTB represent approximately 0.14 percent of Polymetal's increased share capital, it added. The deal has to be approved by the Government Commission on Monitoring of Foreign Investments.
The Svetlobor licence area is situated in the Sverdlovsk region of Russia and 200 kilometres south-west of Polymetal's producing Voro mine.
"Between 1824 and 2003, more than 7 million troy ounces of platinum was recovered locally by placer miners in the Is and Tura river valleys, making the area the world's largest historical alluvial platinum producer," Polymetal added.
It plans to publish a mineral resource estimate for the project under JORC guidelines in the fourth quarter of 2014.